Highlights
Revenues of $1,841.9 million, a decrease of 33.7% compared to last year, reflecting the Company's focus on reducing network inventory levels;
Net income of $7.2 million, a decrease of $331.5 million compared to last year;
Normalized EBITDA [1] of $198.5 million, a decrease of 58.0% compared to last year;
Normalized diluted earnings per share [1][2] of $0.61, a decrease of $2.60 per share, and diluted earnings per share of $0.09, a decrease of $4.17 compared to last year;
North American Powersports retail sales decreased by 18% compared to an industry that decreased in the high single digit %;
Adjusting full year-end guidance for revenues, now ranging between $7.8 and $8.0 billion, and for Normalized diluted earnings per share [1][2], now ranging between $2.75 and $3.25.
Recent events – Highlights from Club BRP 2025
The Company continued to push the boundaries of innovation and technology 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.
VALCOURT, QC, Sept. 6, 2024 /PRNewswire/ - BRP Inc. (TSX:DOO) (NASDAQ:DOOO) today reported its 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 on SEDAR+ and EDGAR as well as in the section Quarterly Reports of 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," said 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," concluded Mr. Boisjoli.
[1]
See "Non-IFRS Measures" section of this press release.
[2]
Earnings per share is defined as "EPS".
Financial Highlights
Three-month periods ended
Six-month periods ended
(in millions of Canadian dollars, except per share data and margin)
July 31,
2024
July 31,
2023
July 31,
2024
July 31,
2023
Revenues
$1,841.9
$2,778.0
$3,873.6
$5,207.4
Gross Profit
376.5
697.6
856.5
1,321.1
Gross Profit (%)
20.4 %
25.1 %
22.1 %
25.4 %
Normalized EBITDA [1]
198.5
473.1
445.7
850.2
Net income (loss)
7.2
338.7
(0.2)
493.2
Normalized net income [1]
46.4
255.4
118.9
447.4
Earnings (loss) per share – diluted
0.09
4.26
(0.01)
6.16
Normalized earnings per share – diluted [1]
0.61
3.21
1.57
5.59
Weighted average number of shares – basic
73,756,062
77,874,472
74,320,712
78,357,505
Weighted average number of shares – diluted
74,722,829
79,255,857
75,371,619
79,828,732
FISCAL YEAR 2025 UPDATED GUIDANCE & OUTLOOK
The FY25 guidance has been updated as follows:
Financial Metric
FY24
FY25 Guidance [4] vs FY24
Revenues
Year-Round Products
$5,339.4
Down 20% to 22%
Seasonal Products
3,410.7
Down 30% to 32%
Powersports PA&A and OEM Engines
1,184.6
Down 5% to 7%
Marine
432.3
Down 40% to 50%
Total company revenues
10,367.0
$7.8B to $8.0B
Normalized EBITDA [1]
1,699.6
$890M to $940M
Normalized earnings per share – diluted [1]
11.11
$2.75 to $3.25
Net income
744.5
$90M to $120M
Other assumptions for FY25 Guidance
• Depreciation Expenses Adjusted:
~$430M (Compared to $382M in FY24)
• Net Financing Costs Adjusted:
~$185M (Compared to $175M in FY24)
• Effective tax rate [1] [3]
~25.0% to 25.5% (Compared to 23.6% in FY24)
• Weighted average number of shares – diluted:
~75.0M shares (Compared to 78.5M in FY24)
• Capital Expenditures:
~$475M (Compared to $586M in FY24)
FY25 Quarterly Outlook [4]
The Company expects Q3 Fiscal 2025 Normalized diluted earnings per share [1][2] to be up between high-single digit to low-teen percentage versus Q2 Fiscal 2025.
[1]
See "Non-IFRS Measures" section of this press release.
[2]
Earnings per share is defined as "EPS".
[3]
Effective tax rate based on Normalized Earnings before Normalized Income Tax.
[4]
Please refer to the "Caution Concerning Forward-Looking Statements" and "Key assumptions" sections of this press release for a summary of important risk factors that could affect the above guidance and of the assumptions underlying this Fiscal Year 2025 guidance.
SECOND QUARTER RESULTS
As planned, the Company maintained its focus on reducing network inventory levels during the three-month period ended July 31, 2024, resulting in a decrease in the volume of shipments, consequently leading to a decline in revenues compared to the same period last year. The decrease in the volume of shipments, higher sales programs due to increased promotional intensity and decreased leverage of fixed costs as a result of reduced shipments 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 favourable product mix.
The Company's North American quarterly retail sales for Powersport Products were down 18% for the three-month period ended July 31, 2024. The decrease is mainly explained by softer industry demand in both 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 ended July 31, 2024, compared to $2,778.0 million for the corresponding period ended July 31, 2023. The decrease in revenues was primarily due 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 most product lines. The decrease includes a favourable foreign exchange rate variation of $29 million.
Year-Round Products [5] (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 [5] (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 [5] (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-month period ended July 31, 2024, compared to $294.2 million for the corresponding period ended July 31, 2023. The decrease in revenues from Powersports PA&A and OEM Engines was primarily attributable to a lower volume sold due to a high network inventory level in Snowmobile and decrease in retail in other product lines. The decrease also includes a favourable foreign exchange rate variation of $3 million.
Marine [5] (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-month period ended July 31, 2024, compared to $126.9 million for the corresponding period ended July 31, 2023. The decrease in revenues 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.
[5] The inter-segment transactions are included in the analysis.
North American Retail Sales
The Company's North American retail sales for Powersports Products decreased by 18% for the three-month period ended July 31, 2024 compared to the same period last year. The decrease is mainly explained by softer industry demand in 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 ...
