BRP reports North American retail sales drop in Q2
BRP continued to push the boundaries in Q2 by enhancing its existing product lines, namely with the introduction of the all-new Can-Am Outlander 850 and 1000R ATVs, the Can-Am Maverick R Max SSV lineup, the Sea-Doo FishPro Apex, the Sea-Doo Switch Fish pontoon, and the 2025 Alumacraft Competitor and Trophy boat models, as well as with the launch of the brand-new Can-Am Canyon 3-wheel vehicle. BRP also formally launched its Can-Am Pulse and Can-Am Origin all-electric motorcycle lineup, marking its official entry into the electric motorcycle industry.
BRP’s financial results for the three- and six-month periods ended July 31, 2024. All financial information is in Canadian dollars unless otherwise noted. The complete financial results are available in the Quarterly Reports section on BRP’s website.
“Our results were in line with expectations and reflect our ongoing focus on reducing network inventory to maintain our dealer value proposition. We have made great strides on that front, but the retail environment is more challenging with the economic context pressuring consumer demand. As such, our priority is to continue to proactively manage production and inventory levels, which leads us to revise our year-end guidance,” says José Boisjoli, president and CEO of BRP.
“We are coming off a successful dealer event, during which we introduced industry-leading innovations, including our Can-Am electric motorcycles, reflecting our ongoing commitment to investing in R&D. Looking ahead, we have every confidence in our long-term strategy, and remain focused on building a strong future. We are best positioned to stay on top as we continue leveraging our solid business fundamentals,” concludes Boisjoli.
Q2 results
The company continued to focus on reducing network inventory levels during Q2 (FY25), resulting in fewer shipments and a decline in revenues compared to the same period last year. The decrease in the volume of shipments and higher sales programs due to increased promotional intensity and decreased leverage of fixed costs as a result of reduced shipments led to a decrease in the gross profit and gross profit margin compared to the same period last year.
The company’s North American quarterly retail sales for Powersport Products were down 18% for the three-month period. BRP says this is due to softer industry demand for its seasonal and year-round products.
Revenues
Revenues decreased by $936.1 million, or 33.7%, to $1,841.9 million for the three-month period, compared to $2,778.0 million for the corresponding period in 2023. The revenue decrease was primarily due to a lower volume sold across all product lines, as the company says it maintained its focus on reducing network inventory levels and higher sales programs. The decrease was partially offset by favourable product mix across most product lines. The decrease includes a favorable foreign exchange rate variation of $29 million.
Year-Round Products (54% of Q2-FY25 revenues): Revenues from Year-Round Products decreased by $476.6 million, or 32.6%, to $985.0 million for the three-month period ended July 31, 2024, compared to $1,461.6 million for the corresponding period ended July 31, 2023. The decrease in revenues from Year-Round Products was primarily attributable to a lower volume sold across all product lines, as the Company maintained its focus on reducing network inventory levels, and higher sales programs. The decrease was partially offset by favourable product mix of SSV and 3WV. The decrease includes a favourable foreign exchange rate variation of $18 million.
Seasonal Products (29% of Q2-FY25 revenues): Revenues from Seasonal Products decreased by $355.7 million, or 39.6%, to $541.8 million for the three-month period ended July 31, 2024, compared to $897.5 million for the corresponding period ended July 31, 2023. The decrease in revenues from Seasonal Products was primarily attributable to a lower volume sold across all product lines, as the Company maintained its focus on reducing network inventory levels, and higher sales programs. The decrease was partially offset by favourable product mix across all product lines. The decrease includes a favourable foreign exchange rate variation of $8 million.
Powersports PA&A and OEM Engines (14% of Q2-FY25 revenues): Revenues from Powersports PA&A and OEM Engines decreased by $35.9 million, or 12.2%, to $258.3 million for the three months, compared to $294.2 million in 2023. The decrease was primarily attributable to a lower volume sold due to a high network inventory level in Snowmobile and a decrease in retail in other product lines. The decrease also includes a favorable foreign exchange rate variation of $3 million.
Marine (3% of Q2-FY25 revenues): Revenues from the Marine segment decreased by $67.5 million, or 53.2%, to $59.4 million for the three months, compared to $126.9 million in 2023. The revenue decrease from the Marine segment was mainly attributable to a lower volume sold due to high dealer inventory, softer consumer demand in the industry, and higher sales programs.
North American retail sales
BRP’s North American retail sales for powersports products decreased by 18% for the three months, compared to the same period last year. The decrease is mainly explained by softer industry demand for both Seasonal and Year-Round Products.
North American Year-Round Products retail sales decreased on a percentage basis in the low teens range compared to the three-month period ended July 31, 2023. In comparison, the Year-Round Products industry decreased on a percentage basis in the mid-single digits over the same period.
North American Seasonal Products retail sales decreased on a percentage basis in the high-twenties range compared to 2023.
The Seasonal Products industry decreased in percentage terms in the high teens over the same period. Given a low retail volume period as a comparison, the company’s North American retail sales for Marine Products increased by 35% compared to 2023.
