BRP REPORTS FISCAL YEAR 2026 FIRST QUARTER RESULTS
- Gross profit decreased 24.3% to $394.8 million
- Operating expenses reduced by 9.2% to $300.9 million
- Diluted EPS increased to $2.19 from $0.56
- Normalized diluted EPS decreased to $0.47 from $1.58
- Il margine lordo è diminuito del 24,3%, raggiungendo 394,8 milioni di dollari
- Le spese operative si sono ridotte del 9,2%, a 300,9 milioni di dollari
- L'EPS diluito è aumentato a 2,19 dollari da 0,56 dollari
- L'EPS diluito normalizzato è sceso a 0,47 dollari da 1,58 dollari
- La utilidad bruta disminuyó un 24.3% a $394.8 millones
- Los gastos operativos se redujeron un 9.2% a $300.9 millones
- La utilidad por acción diluida aumentó a $2.19 desde $0.56
- La utilidad por acción diluida normalizada disminuyó a $0.47 desde $1.58
- 총이익은 24.3% 감소하여 3억 9,480만 달러
- 영업비용은 9.2% 감소하여 3억 90만 달러
- 희석 주당순이익(EPS)은 0.56달러에서 2.19달러로 증가
- 정상화된 희석 EPS는 1.58달러에서 0.47달러로 감소
- La marge brute a diminué de 24,3 % pour atteindre 394,8 millions de dollars
- Les charges d'exploitation ont été réduites de 9,2 % à 300,9 millions de dollars
- Le BPA dilué est passé de 0,56 $ à 2,19 $
- Le BPA dilué normalisé est passé de 1,58 $ à 0,47 $
- Der Bruttogewinn sank um 24,3 % auf 394,8 Millionen US-Dollar
- Die Betriebskosten wurden um 9,2 % auf 300,9 Millionen US-Dollar reduziert
- Das verwässerte Ergebnis je Aktie (EPS) stieg von 0,56 auf 2,19 US-Dollar
- Das normalisierte verwässerte EPS sank von 1,58 auf 0,47 US-Dollar
- Net income increased significantly by 278.8% to $161.0 million
- Operating expenses decreased by 9.2% due to cost optimization
- Strong end-of-season Snowmobile retail sales outpacing industry
- Improved cash flow from operations at $214.5 million, up from $141.4 million
- Strategic divestment of non-core assets (Telwater and Alumacraft)
- Revenue declined 7.7% to $1,846.9 million
- Normalized EBITDA decreased 34.7% to $200.8 million
- Gross profit margin dropped 470 basis points to 21.4%
- Year-Round Products retail sales decreased in low-teens range
- Softer consumer demand and challenging macro environment
Insights
BRP delivered mixed Q1 results with declining revenue and profitability amid industry slowdown, though North American retail sales remained flat.
BRP's Q1 FY2026 results paint a picture of a company navigating challenging market conditions with strategic discipline. Revenue declined
Breaking down the performance by segment reveals divergent trends. Year-Round Products, which constitute
Gross profit margins contracted significantly, falling 470 basis points to
Despite the challenging revenue and profitability picture, BRP demonstrated effective cost control with operating expenses down
The flat North American retail sales performance is actually relatively positive given the broader industry context, indicating BRP is maintaining market share despite headwinds. The company's ability to outperform the industry in Seasonal Products (growing in the high-twenties compared to the industry's low-teens growth) demonstrates brand strength, though Year-Round Products underperformed the industry decline.
Management's decision to refrain from providing financial projections signals continued uncertainty, while the strategic divestiture of Telwater and Alumacraft assets indicates a focus on core powersports operations. The announced CEO succession plan adds another element of transition to monitor.
Highlights
- Revenues of
$1,846.9 million 7.7% compared to last year; - Net income of
$161.0 million 278.8% compared to last year; - Normalized EBITDA [1] of
$200.8 million 34.7% compared to last year; - Normalized diluted earnings per share [1][2] of
$0.47 $1.11 $2.19 $1.63 - North American retail sales were flat compared to last year, resulting from strong end-of-season retail in Snowmobile, offset by a decrease in Year-Round Products retail mainly due to the industry's slowdown;
- On April 1st, 2025, the Company announced a definitive agreement to sell Telwater Pty, Ltd., and closed the sale of Alumacraft's assets on May 1st, 2025;
- The Company also announces CEO succession plan.
"We delivered a sound first-quarter performance despite the current context, with results in line with expectations. Driven by a solid end-of-season in Snowmobile, we slightly outperformed the North American Powersports industry with retail sales holding steady compared to Q1 last year," said José Boisjoli, President and CEO of BRP.
"Looking ahead, given the uncertainty, we are still refraining from making financial projections at this time. In the short-term, although demand remains soft due to a challenging macro environment, our strong product portfolio and leaner inventory levels position us favourably for a rebound. Over the longer term, our decision to double down on our core Powersports activities, combined with our team's ingenuity and our commitment to pushing technology and innovation, provide the foundations for sustained leadership," concluded Mr. Boisjoli.
[1] See "Non-IFRS Measures" section of this press release. |
[2] Earnings per share is defined as "EPS". |
Financial Highlights [3] | |||
Three-month periods ended | |||
(in millions of Canadian dollars, except per share data and margin) | April 30, 2025 | April 30, 2024 | |
Revenues | |||
Gross Profit | 394.8 | 521.7 | |
Gross Profit (%) | 21.4 % | 26.1 % | |
Normalized EBITDA [1] | 200.8 | 307.4 | |
Net Income | 161.0 | 42.5 | |
Net Loss from Discontinued Operations | (10.9) | (49.9) | |
Normalized Net Income [1] | 34.6 | 120.5 | |
Diluted Earnings per Share | 2.19 | 0.56 | |
Diluted Normalized Earnings per Share [1] [2] | 0.47 | 1.58 | |
Basic Weighted Average Number of Shares | 73,031,821 | 74,897,906 | |
Diluted Weighted Average Number of Shares | 73,513,777 | 76,036,145 | |
[1] See "Non-IFRS Measures" section of this press release. |
[2] Earnings per share is defined as "EPS". |
[3] Figures are on a continuing basis and prior periods reclassified accordingly. |
FIRST QUARTER RESULTS
The first quarter of Fiscal 2026 was marked by continued softer consumer demand exacerbated by the uncertainty surrounding changes to global tariffs and trades regulations. As the Company continued to focus on reducing network inventory levels on Seasonal Products and managed industry slowdown on Year-Round Products, the volume of shipments and revenues decreased compared to the same period last year. The decrease in the volume of shipments, the higher sales programs due to the sustained promotional environment and the decreased leverage of fixed costs have led to a decrease in the gross profit and gross profit margin compared to the same period last year. This decrease was partially offset by production efficiencies.
The Company's North American retail sales were flat for the three-month period ended April 30, 2025. Following late snowfall, the Company delivered strong Snowmobile retail sales during the end of the season, which allowed to outpace the industry and reduce network inventory. The increase in Seasonal Products retail sales were offset by a decrease in Year-Round Products retail sales mainly due to the industry's slowdown.
Revenues
Revenues decreased by
- Year-Round Products (
60% of Q1-FY26 revenues): Revenues from Year-Round Products decreased by$52.0 million 4.5% , to$1,105.8 million $1,157 $19 million - Seasonal Products (
23% of Q1-FY26 revenues): Revenues from Seasonal Products decreased by$115.9 million 21.7% , to$419.2 million $535.1 million $6 million - PA&A and OEM Engines (
17% of Q1-FY26 revenues): Revenues from PA&A and OEM Engines increased by$14.9 million 4.9% , to$321.9 million $307 $8 million
North American Retail Sales
The Company's North American retail sales were flat for the three-month period ended April 30, 2025 compared to the same period last year. Seasonal Products retail sales were up driven by strong end-of-season retail in Snowmobile following late snowfall, offset by a decrease in Year-Round Products retail sales mainly due to the industry's slowdown.
- North American Year-Round Products retail sales decreased on a percentage basis in the low-teens range compared to the three-month period ended April 30, 2024. The Year-Round Products industry sales decreased on a percentage basis in the mid-single digits over the same period.
- North American Seasonal Products retail sales increased on a percentage basis in the high-twenties range compared to the three-month period ended April 30, 2024. The Seasonal Products industry sales increased on a percentage basis in the low-teens range over the same period.
Gross profit
Gross profit decreased by
Operating Expenses
Operating expenses decreased by
Normalized EBITDA [1]
Normalized EBITDA [1] decreased by
Net Income
Net income increased by
Net Loss from Discontinued Operations
Net loss decreased by
[1] See "Non-IFRS Measures" section of this press release. |
LIQUIDITY AND CAPITAL RESOURCES
Consolidated net cash flows generated from operating activities totaled
The Company invested
During the three-month period ended April 30, 2025, the Company also returned
Dividend
On May 28, 2025, the Company's Board of Directors declared a quarterly dividend of
CONFERENCE CALL AND WEBCAST PRESENTATION
Today at 9 a.m. EDT, BRP Inc. will host a conference call and webcast to discuss its FY26 first quarter results. The call will be hosted by José Boisjoli, President and CEO, and Sébastien Martel, CFO. To listen to the conference call by phone (event number 47832), please dial 1 800-717-1738 (toll-free in
The Company's first quarter FY26 webcast presentation is posted in the Quarterly Reports section of BRP's website.
About BRP
BRP Inc. is a global leader in the world of powersports products, propulsion systems and boats built on over 80 years of ingenuity and intensive consumer focus. Through its portfolio of industry-leading and distinctive brands featuring Ski-Doo and Lynx snowmobiles, Sea-Doo watercraft and pontoons, Can-Am on and off-road vehicles, Quintrex boats,
CAUTION CONCERNING FORWARD-LOOKING STATEMENTS
Certain statements in this press release, including, but not limited to, statements relating to the Company's decision to continue to refrain from providing guidance for Fiscal 2026 until the situation around potential tariffs and changes to trade regulations further develops, statements relating to the declaration and payment of dividends, statements about the Company's current and future plans, prospects, expectations, including of sustained profitable growth, anticipations, estimates and intentions, results, levels of activity, performance, objectives, targets, goals or achievements, priorities and strategies, including its continued focus on tight network inventory management in order to be positioned favourably for a rebound, sustained promotional intensity and proactively managing production to maintain dealer value proposition, financial position, market position, including expected market share volatility notably in light of high non-current inventory from other OEMs, capabilities, competitive strengths, beliefs, the prospects and trends of the industries in which the Company operates, including softer industry demand trends and sustained promotional intensity and pricing actions, the expected demand for products and services in the markets in which the Company competes, the ongoing commitment to invest in research and product development activities and push the boundaries of innovation, including the expectation of regular flow of new product introductions and development of market-shaping products, the projected design, characteristics, capacity or performance of future products and their expected scheduled entry to market, expected financial requirements and the availability of capital resources and liquidity, the Company's ability to complete its process for the sale of its Marine businesses as expected and to manage and mitigate the risks associated therewith, including the ability to separate the Marine businesses within the anticipated time periods, at expected cost levels and expected proceeds, the impact of the sale of the Marine businesses, including its ability to double down on Powersports to capitalize on market opportunities, and any other future events or developments and other statements that are not historical facts constitute forward-looking statements within the meaning of applicable securities laws. The words "may", "will", "would", "should", "could", "expects", "forecasts", "plans", "intends", "trends", "indications", "anticipates", "believes", "estimates", "outlook", "predicts", "projects", "likely" or "potential" or the negative or other variations of these words or other comparable words or phrases, are intended to identify forward-looking statements.
Forward-looking statements are presented for the purpose of assisting readers in understanding certain key elements of the Company's current objectives, goals, targets, strategic priorities, expectations and plans, and in obtaining a better understanding of the Company's business and anticipated operating environment. Readers are cautioned that such information may not be appropriate for other purposes; readers should not place undue reliance on forward-looking statements contained herein. Forward-looking statements, by their very nature, involve inherent risks and uncertainties and are based on a number of assumptions, both general and specific, as further described below.
Many factors could cause the Company's actual results, level of activity, performance or achievements or future events or developments to differ materially from those expressed or implied by the forward-looking statements, including, without limitation, the following factors, which are discussed in greater detail under the heading "Risk Factors" of the Company's management's discussion and analysis for Fiscal 2025 ("the 2025 MD&A") for the fiscal year ended on January 31, 2025 and in other continuous disclosure materials filed from time to time with Canadian securities regulatory authorities and the Securities and Exchange Commission: the impact of adverse economic conditions including in the context of easing but still elevated interest and inflation rates; any decline in social acceptability of the Company and its products, including in connection with the broader adoption of electrical or low-emission products; high levels of indebtedness; any unavailability of additional capital; any supply problems, termination or interruption of supply arrangements or increases in the cost of materials; the inability to attract, hire and retain key employees, including members of the Company's management team or employees who possess specialized market knowledge and technical skills; any failure of information technology systems, security breach or cyber-attack, or difficulties with the implementation of new systems, including the difficulties in the continued implementation of its ERP system; the Company's reliance on international sales and operations including heightened concerns for global trade tensions with escalation in tariffs and other retaliatory measures; the Company's inability to successfully execute its growth strategy; fluctuations in foreign currency exchange rates; unfavourable weather conditions and climate change more generally; the seasonal nature of the Company's business and some of its products; the Company's reliance on a network of independent dealers and distributors; any inability of dealers and distributors to secure adequate access to capital; any inability to comply with product safety, health, environmental, privacy matters and noise pollution laws; the Company's large fixed cost base; any failure to compete effectively against competitors or any failure to meet consumers' evolving expectations; any failure to maintain an effective system of internal control over financial reporting and to produce accurate and timely financial statements; any inability to maintain and enhance the Company's reputation and brands; any significant product liability claim; any significant product repair and/or replacement due to product warranty claims or product recalls; any failure to carry proper insurance coverage; the Company's inability to successfully manage inventory levels; any intellectual property infringement and litigation; the Company's inability to successfully execute its manufacturing strategy or to adjust to fluctuating customer demand as a result of manufacturing capacity constraints; increased freight and shipping costs or disruptions in transportation and shipping infrastructure; any failure to comply with covenants in financing and other material agreements; any changes in tax laws and unanticipated tax liabilities; any impairment in the carrying value of goodwill and intangibles with indefinite useful life and trademarks; any deterioration in relationships with employees; pension plan liabilities; natural disasters; volatility in the market price for the Subordinate Voting Shares; the Company's conduct of business through subsidiaries; the significant influence of Beaudier Group and Bain Capital; and future sales of Subordinate Voting Shares by Beaudier Group, Bain Capital, directors, officers or senior management of the Company. These factors are not intended to represent a complete list of the factors that could affect the Company; however, these factors should be considered carefully. Unless otherwise stated, the forward-looking statements contained in this press release are made as of the date of this press release and the Company has no intention and undertakes no obligation to update or revise any forward-looking statements to reflect future events, changes in circumstances, or changes in beliefs, unless required by applicable securities regulations. In the event that the Company does update any forward-looking statements contained in this press release, no inference should be made that the Company will make additional updates with respect to that statement, related matters or any other forward-looking statement. The forward-looking statements contained in this press release are expressly qualified by this cautionary statement.
KEY ASSUMPTIONS
The Company made a number of economic, market and operational assumptions in preparing and making certain forward-looking statements contained in this Press Release, including without limitation the following assumptions: softer industries in both Seasonal and Year-Round Products and a continuously challenging macroeconomic environment; expected market share volatility; main currencies in which the Company operates will remain at near current levels; levels of inflation, which are expected to continue to ease; there will be no significant changes in tax laws or treaties applicable to the Company; the Company's margins are expected to continue to be pressured by lower volumes; the supply base will remain able to support product development and planned production rates on commercially acceptable terms in a timely manner; the absence of unusually adverse weather conditions, especially in peak seasons. BRP cautions that its assumptions may not materialize, and that the currently challenging macroeconomic and geopolitical environment in which it evolves may render such assumptions, although believed reasonable at the time they were made, subject to greater uncertainty. Specifically, these assumptions do not incorporate the imposition of wide-ranging
NON-IFRS MEASURES
This press release makes reference to certain non-IFRS measures. These measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of the Company's results of operations from management's perspective. Accordingly, they should not be considered in isolation nor as a substitute for analysis of the Company's financial information reported under IFRS. The Company uses non-IFRS measures including the following:
Non-IFRS | Definition | Reason for use | ||
Normalized | Net income before financing costs, | Assist investors in determining the financial performance of the | ||
Normalized | Net income before normalized | In addition to the financial performance of operating activities, this | ||
Normalized | Income tax expense adjusted to | Assist investors in determining the tax expense relating to the normalized | ||
Normalized | Based on Normalized net income | Assist investors in determining the effective tax rate including the normalized | ||
Normalized | Calculated by dividing the | Assist investors in determining the normalized financial performance of the | ||
Free cash | Cash flows from operating | Assist investors in assessing the Company's liquidity generation abilities |
The Company believes non-IFRS measures are important supplemental measures of financial performance because they eliminate items that have less bearing on the Company's financial performance and thus highlight trends in its core business that may not otherwise be apparent when relying solely on IFRS measures. The Company also believes that securities analysts, investors and other interested parties frequently use non-IFRS measures in the evaluation of companies, many of which present similar metrics when reporting their results. Management also uses non-IFRS measures in order to facilitate financial performance comparisons from period to period, prepare annual operating budgets, assess the Company's ability to meet its future debt service, capital expenditure and working capital requirements and also as a component in the determination of the short-term incentive compensation for the Company's employees. Because other companies may calculate these non-IFRS measures differently than the Company does, these metrics are not comparable to similarly titled measures reported by other companies.
The Company refers the reader to the tables below for the reconciliations of the non-IFRS measures presented by the Company to the most directly comparable IFRS measure.
Reconciliation Tables [2]
The following tables present the reconciliation of non-IFRS measures compared to their respective IFRS measures:
Three-month periods ended | |||
(in millions of Canadian dollars) | April 30, 2025 | April 30, 2024 | |
Net income | |||
Normalized elements | |||
Foreign exchange (gain) loss on long-term debt and lease liabilities | (128.6) | 70.7 | |
Costs related to business combinations [3] | 3.1 | 3.2 | |
Restructuring and related costs [4] | 0.5 | 14.2 | |
Other elements [5] | 0.4 | 0.9 | |
Income tax adjustment [1] [6] | (1.8) | (11.0) | |
Normalized net income [1] | 34.6 | 120.5 | |
Normalized income tax expense [1] | 15.8 | 41.8 | |
Financing costs | 46.6 | 48.6 | |
Financing income | (1.3) | (1.8) | |
Depreciation expense adjusted [1] | 105.1 | 98.3 | |
Normalized EBITDA [1] | |||
[1] | See "Non-IFRS Measures" section. |
[2] | Figures are on a continuing basis and prior periods reclassified accordingly. |
[3] | Transaction costs and depreciation of intangible assets related to business combinations. |
[4] | Costs associated with restructuring and reorganization activities, which are mainly composed of severance costs. |
[5] | Other elements include transaction costs associated with the sale of the Marine businesses and fees associated with the secondary offering that occurred during Fiscal 2025. |
[6] | Income tax adjustment is related to the income tax on Normalized elements subject to tax and for which income tax has been recognized and to the adjustment related to the impact of foreign currency translation from Mexican operations. |
The following table [2] presents the reconciliation of items as included in the Normalized net income [1] and Normalized EBITDA [1] compared to respective IFRS measures as well as the Normalized EPS – basic and diluted [1] calculation.
(in millions of Canadian dollars, except per share data) | Three-month periods ended | ||
April 30, 2025 | April 30, 2024 | ||
Depreciation expense reconciliation | |||
Depreciation expense | |||
Depreciation of intangible assets related to business combinations | (1.4) | (1.4) | |
Depreciation expense adjusted | |||
Income tax expense reconciliation | |||
Income tax expense | |||
Income tax adjustment [3] | 1.8 | 11.0 | |
Normalized income tax expense [1] | |||
Normalized EPS - basic [1] calculation | |||
Normalized net income [1] | |||
Non-controlling interests | 0.1 | (0.2) | |
Weighted average number of shares - basic | 73,031,821 | 74,897,906 | |
Normalized EPS - basic [1] | |||
Normalized EPS - diluted [1] calculation | |||
Normalized net income [1] | |||
Non-controlling interests | 0.1 | (0.2) | |
Weighted average number of shares - diluted | 73,513,777 | 76,036,145 | |
Normalized EPS - diluted [1] | |||
[1] | See "Non-IFRS Measures" section. |
[2] | Figures are on a continuing basis and prior periods reclassified accordingly. |
[3] | Income tax adjustment is related to the income tax on Normalized elements subject to tax and for which income tax has been recognized and to the adjustment related to the impact of foreign currency translation from Mexican operations. |
The following table presents the reconciliation of consolidated net cash flows generated from operating activities to free cash flow [1].
(in millions of Canadian dollars) | Three-month periods ended | ||
April 30, 2025 | April 30, 2024 | ||
Net cash flows generated from operating activities | |||
Additions to property, plant and equipment | (45.1) | (66.8) | |
Additions to intangible assets | (9.4) | (8.4) | |
Free cash flow [1] | |||
Free cash flow from continuing operations [1] | |||
Free cash flow from discontinued operations [1] | |||
[1] See "Non-IFRS Measures" section. |
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SOURCE BRP Inc.
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