BRP Inc. raised its full-year earnings guidance Thursday after reporting an 18.5 per cent increase in second-quarter revenue, although tariffs and a supplier financial restructuring contributed to a sharp decline in profit margins.
The Quebec-based powersports company reported revenue of $2.24 billion for the three months ended July 31, up from $1.89 billion a year earlier. The increase was primarily driven by higher off-road vehicle shipments and a favourable side-by-side vehicle product mix.
BRP reported a net loss of $136.8 million, compared with net income of $57.1 million in the same quarter last year. Normalized EBITDA fell 34.9 per cent to $138.8 million from $213.2 million.
The company said gross profit declined by $135.2 million, or 34 per cent, to $262.5 million, while its gross profit margin fell to 11.7 per cent from 21.1 per cent.
BRP attributed the decline primarily to the impact of Section 232 tariffs on steel, aluminum and copper imports into the United States, as well as the effects of a supplier financial restructuring. The restructuring had an unfavourable impact of $74.8 million, or 330 basis points, on gross profit and gross profit margin.
The impact was partially offset by higher volumes and lower sales programs, mainly in off-road vehicles.
“Our second-quarter financial results exceeded expectations, reflecting disciplined execution and increased ORV shipments to support sustained retail momentum. Given our strong performance in ORV leading to additional market share gains, and reduced net tariff costs, we are raising our full-year guidance,” said Denis Le Vot, president and CEO of BRP.
The company increased its fiscal 2027 guidance for normalized diluted earnings per share to between $4 and $4.50, from $3.75 to $4.25 previously. BRP is also forecasting total revenue of between $9.225 billion and $9.475 billion, compared with $8.443 billion in fiscal 2026.
The revised guidance calls for normalized EBITDA of between $1.025 billion and $1.075 billion, compared with $1.103 billion in fiscal 2026. BRP expects net income of between $160 million and $195 million, down from $340.4 million last fiscal year.
The company said its North American retail sales increased one per cent during the quarter. Growth was driven by industry trends in side-by-side vehicles and market-share gains in off-road vehicles, partially offset by lower sales of seasonal products.
Revenue from year-round products increased 33.3 per cent to $1.49 billion, while seasonal-product revenue declined 8.9 per cent to $427.7 million. Revenue from parts, accessories, apparel, OEM engines and other activities rose 6.3 per cent to $324 million.
For the six months ended July 31, BRP reported revenue of $4.63 billion, an increase of 23.9 per cent from $3.74 billion a year earlier. Normalized EBITDA increased 14.3 per cent to $473.2 million.
The company reported a six-month net loss of $9.5 million, compared with net income of $218.1 million in the same period last year. Normalized net income, however, increased 19.7 per cent to $121.5 million.
BRP generated $686.8 million in operating cash flow during the first six months of the fiscal year, compared with $373.1 million a year earlier. It said the increase was mainly due to favourable changes in working capital and lower income taxes paid, partially offset by lower profitability.
The company invested $126.2 million in capital expenditures during the period, including spending on new products and modernization of its software infrastructure. It also returned $231.7 million to shareholders through quarterly dividends and share repurchases.
BRP’s board declared a quarterly dividend of 25 cents per share on Sept. 2. The dividend is scheduled to be paid Oct. 13 to shareholders of record at the close of business Sept. 29.
The company said it expects normalized diluted earnings per share in its third quarter to decline by approximately 50 per cent to 60 per cent compared with the same quarter of fiscal 2026, mainly because of increased tariff impacts.
BRP also outlined plans to release major off-road product announcements every six months over the next four years. The company recently introduced several new products and launched BRP Financial Services, a branded retail financing program in the United States.
“Looking ahead, we remain focused on navigating through the volatile geopolitical and trade environment and advancing our long-term growth prospects. Our recent Club BRP dealer event allowed us to showcase innovative initiatives that strengthen our competitive position, including a commitment to releasing major off-road product news every six months for the next four years. This will be instrumental in achieving our goal of making Can-Am the number one ORV brand in North America and being the undeniable OEM of choice for dealers and riders,” said Le Vot.
Full second quarter results can be found here.
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