BRP increases retail sales 8% in FY24 results
BRP Inc. reported its financial results for the three-month and twelve-month periods ended January 31, 2024. The top line story is that the company continued to gain market share and increased retail sales in North America by 8% compared to the same period last year, while the industry only saw an increase of 1%.
“Fiscal 2024 was marked by market share gains in the North American Powersports industry, successful product launches and continued progress on our strategic initiatives, leading to record revenues and free cash flow. Our performance in the side-by-side category was very impressive, as we reached a market share of 30% one year ahead of plan. I sincerely thank our teams for their commitment to our success,” comments José Boisjoli, president and CEO of BRP.
“Our fourth quarter results ended within our guidance despite unfavorable winter conditions affecting our snow-related business. Heading into fiscal 2025, we are focused on proactively managing network inventory to maintain our dealer value proposition. We expect to strengthen our position as the OEM[2] of choice, driven by our diversified product portfolio, as well as our strong business fundamentals. We are also excited about the launch of our new electric Can-Am motorcycles later this year which should further expand our addressable market,” concluded Mr. Boisjoli.
Quarterly Outlook
Given its focus on managing network inventory levels, the company expects Q1 Fiscal 2025 EBITDA to be down approximately 35% versus the same three-month period last fiscal year.
The company’s Q4 2024 was marked by a decrease in the volume of shipments and revenues compared to Q4 2023. The results of the fourth quarter of this fiscal year were mainly driven by a decrease in Seasonal Products deliveries, as the fourth quarter of this fiscal year compares unfavorably to a strong fourth quarter last fiscal year, where Seasonal Products shipments were completed after peak retail season due to supply chain issues last year.
Revenues were also negatively impacted by higher sales incentives and unfavorable winter conditions, primarily in North America, where the short-riding season reduced the demand for PA&A compared to the fourth quarter of the last fiscal year.
BRP’s North American quarterly retail sales were down for all product lines except SSV (ATV/UTV), resulting in an overall decrease in retail when compared to the same period last year. While the company says it has improved production efficiencies in its supply chain, the reduction in volume and increase in sales programs have led to a decrease in the profit margin in Q4, compared to last year.
Revenues
Revenues decreased by $384.5 million (CDN), or 12.5%, to $2,691.8 million compared to the $3,076.3 million for the corresponding period in 2023. The revenue decrease was primarily due to a lower volume across most product lines, explained by late shipments of Seasonal Products for the same period last fiscal year, softening consumer demand, primarily in International markets, higher sales programs across most product lines, and unfavorable winter conditions, which impacted the Snowmobile season for PA&A. The decrease was partially offset by a favorable product mix in Year-Round products and favorable pricing across most product lines. (Decrease includes a favorable foreign exchange rate variation of $4 million.)
Year-Round Products (51% of Q4-FY24 revenues): Revenues from Year-Round Products increased by $109.1 million, or 8.7%, to $1,363.9 million, compared to $1,254.8 million for Q4 2023. The increase was primarily attributable to a favorable product mix due to the introduction of new models and a higher volume of 3WV due to the timing of shipments between the third and fourth quarters of Fiscal 2024. Higher sales programs and a lower volume of ATV and SSV sold partially offset the increase in revenues. The increase includes an unfavorable foreign exchange rate variation of $1 million.
Seasonal Products (35% of Q4-FY24 revenues): Revenues from Seasonal Products decreased by $366.9 million, or 27.8%, to $952.6 million in Q4, compared to $1,319.5 million in Q4-FY23. The decrease was attributable to a lower volume of products sold and higher sales programs, mainly on Snowmobiles due to unfavorable winter conditions. Late shipments last year are attributed to the loss, but it was partially offset by favorable pricing across all product lines.
Powersports PA&A and OEM Engines (11% of Q4-FY24 revenues): Revenues from PA&A (PG&A) and OEM Engines decreased by $87.3 million, or 23.1%, to $291.0 million, compared to $378.3 million in 2023. BRP says the decrease was impacted by lower dealer orders due to a higher level of stock remaining in dealer inventory and unfavorable winter conditions in North America, which impacted the Snowmobile riding season and the related PA&A revenues.
Marine (3% of Q4-FY24 revenues): Revenues from the Marine segment dropped to $38.4 million (29.9%), to $90.1 million, compared to $128.5 million in Q4 2023. The decrease was primarily attributable to a lower volume of products sold, higher sales programs, and an unfavorable product mix. The decrease in volume is mainly explained by softer consumer demand in the industry.
North American Retail Sales
BRP’s North American retail sales for Powersports Products decreased by 10% for Q4 2024 compared to the last fiscal year. This was mainly driven by lower retail sales of Snowmobile and PWC for Q4-24 compared to the same period last fiscal year and late shipments that occurred after peak retail season last year. In addition, unfavorable winter conditions impacted our Snowmobile season this fiscal year. The decrease was partially offset by increased ATV-UTV retail sales in Q4-24.
Year-Round Products: retail sales increased on a percentage basis in the low-teens range compared to Q4-23. However, the industry was only up mid-single digits over the same period.
Seasonal Products: retail sales decreased on a percentage basis in the low-twenties range, even when excluding the Sea-Doo pontoon, compared to last year. The industry saw a drop in the high-teens range over the same period.
BRP’s North American retail sales for Marine Products decreased by 14% compared to last year as a result of softening consumer demand in the boating industry, the company says.
Full Year 2023 Results
Revenues increased by $333.6 million, or 3.3%, to $10,367.0 million for the twelve-month period ended January 31, 2024, compared to $10,033.4 million in 2023. The increase was primarily due to a higher volume of SSV and ATV sold, increased deliveries of Sea-Doo pontoon, favorable product mix across most product lines, as well as favorable pricing across all product lines. The increase was partially offset by higher sales programs, which are mostly due to retail incentives and a lower volume across the remaining product lines. The increase includes a favorable foreign exchange rate variation of $187 million.
The company’s fourth quarter FY24 webcast presentation is posted in the Quarterly Reports section of BRP’s website.
