BRP reports fiscal Q1 results, 39% YOY retail growth

BRP has reported its financial results for the three-month period ended April 30, 2021. All financial information is in Canadian dollars unless otherwise noted.

“We had an exceptional start of the year, building on our momentum of growth from prior quarters. Our first quarter results were driven by ongoing robust demand for our products with North American powersports retail up 39%. We were also lapping a quarter in which our manufacturing operations were partly shutdown,” said José Boisjoli, BRP president and CEO in the announcement. “Following our solid first quarter performance, positive outlook for the business and factoring in current supply chain constraints, we increased our overall guidance for Fiscal 22 with Normalized EPS now expected to grow between 44% to 58% over last year. We are excited about the future and will concentrate on converting new entrants into lifelong customers, continue to introduce new products to the market and take full advantage of our anticipated additional production capacity. I thank our employees, suppliers and dealers for their relentless work.”

Below are highlights from the first quarter results:

Revenues increased by $578.8 million, or 47.1%, to $1,808.6 million for the three-month period ended April 30, 2021, compared with $1,229.8 million for the corresponding period ended April 30, 2020. The revenue increase was primarily due to a higher wholesale of Year-Round Products and Seasonal Products due to COVID-19 impact last year, lower sales programs due to a strong retail environment and a higher volume of Powersports PA&A. The increase in revenue was partially offset by an unfavorable foreign exchange rate variation of $92 million.

Year-Round Products (51% of Q1-22 revenues, excluding intersegment): Revenues from Year-Round Products increased by $282.2 million, or 44.1%, to $922.5 million for the three-month period ended April 30, 2021, compared with $640.3 million for the corresponding period ended April 30, 2020. The increase was primarily attributable to a higher volume of products sold due to COVID-19 impact last year, lower sales programs due to a strong retail environment and a favorable product mix of SSV sold. The increase was partially offset by an unfavorable foreign exchange rate variation of $54 million.

Seasonal Products (26% of Q1-22 revenues, excluding intersegment): Revenues from Seasonal Products increased by $140.8 million, or 43.6%, to $463.4 million for the three-month period ended April 30, 2021, compared with $322.6 million for the corresponding period ended April 30, 2020. The increase resulted primarily from a higher volume of PWC sold due to COVID-19 impact last year, lower sales programs due to a strong retail environment and a favorable product mix of PWC sold. The increase was partially offset by an unfavorable foreign exchange rate variation of $21 million.

Powersports PA&A and OEM engines (16% of Q1-22 revenues, excluding intersegment): Revenues from Powersports PA&A and OEM Engines increased by $143.3 million, or 91.0%, to $300.8 million for the three-month period ended April 30, 2021, compared with $157.5 million for the corresponding period ended April 30, 2020. The increase was mainly attributable to a higher volume of PA&A due to the strong retail environment on products, increased usage of vehicles by consumers and the COVID-19 impact last year. The increase was also attributable to a higher volume of aircraft engines sold. The increase was partially offset by an unfavorable foreign exchange rate variation of $13 million.

Marine (7% of Q1-22 revenues, excluding intersegment): Revenues from the Marine segment increased by $15.3 million, or 13.6%, to $127.4 million for the three-month period ended April 30, 2021, compared with $112.1 million for the corresponding period ended April 30, 2020. The increase was mainly due to a higher volume of boats sold, partially offset by a lower volume of outboard engines sold following the wind-down of the Evinrude outboard engines production and an unfavorable foreign exchange rate variation of $4 million. Temporary suspensions limited the Company’s ability to manufacture and wholesale units during the first quarter of Fiscal 2021.

North American Retail Sales

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The Company's North American retail sales for powersport vehicles increased by 39% for the three-month period ended April 30, 2021 compared with the three-month period ended April 30, 2020. The increase was mainly driven by PWC, 3WV and ATV.

Year-Round Products: retail sales increased on a percentage basis in the mid-thirties range compared with the three-month period ended April 30, 2020.

Seasonal Products: retail sales increased on a percentage basis in the high-forties range compared with the three-month period ended April 30, 2020.

Marine: boat retail sales increased by 71% compared with the three-month period ended April 30, 2020.

Gross profit increased by $306.9 million, or 130.5%, to $542.0 million for the three-month period ended April 30, 2021, compared with $235.1 million for the corresponding period ended April 30, 2020. The gross profit increase includes an unfavorable foreign exchange rate variation of $55 million. Gross profit margin percentage increased to 30.0% from 19.1% for the three-month period ended April 30, 2020. The increase was the result of a higher volume of products sold and a favorable product mix combined to lower sales programs driven by the strong retail environment and the scarcity of our products in the network. The increase was partially offset by higher logistic, freight and labor costs due to inefficiencies related to supply chain disruptions and an unfavorable foreign exchange rate variation.

Operating expenses decreased by $136.9 million, or 37.8%, to $225.5 million for the three-month period ended April 30, 2021, compared with $362.4 million for the three-month period ended April 30, 2020. The decrease was mainly attributable to the $171.4 million impairment charge recorded during the first quarter of FY21 for the Marine segment and a favorable foreign exchange rate variation of $22 million, partially offset by lower expenses in FY21 following cost reduction initiatives to mitigate the impact of COVID-19.

Net income increased by $470.5 million to $244.4 million for the three-month period ended April 30, 2021, compared with a net loss of $226.1 million for the three-month period ended April 30, 2020. The increase was primarily due to higher operating income and a favorable foreign exchange rate variation impact on the U.S. denominated long-term debt, partially offset by higher income tax expense and higher net financing costs.