BRP’s North American retail sales dip 4%

Continued inventory reduction and macroeconomic headwinds contributed to a dip in Bombardier Recreational Products ’ U.S. retail sales in its fiscal third quarter, though new off-road vehicle products gained market share. North American retail sales declined 4% year over year for the quarter ended Oct. 31, according to the Canadian powersports OEM earnings report today. U.S. sales dropped 3% YoY while Canadian sales dropped 7% YoY, according to a BRP presentation today. Despite high interest rates , BRP expects increased consumer and dealer demand, Chief Executive Jose Boisjoli said during today’s earnings call. “Dealers are always concerned with the macroeconomic [environment]. Have we reached the trough? Some speculate that we [have],” he said. “As we see rates come down … the level of appetite from dealers is also increasing.” Meanwhile, BRP’s sale of Telwater , one of its marine brands , to Yamaha Motor Australia is taking longer than initially anticipated,” Boisjoli said, noting that BRP expects a decision on the sale in the coming weeks. Sales dip across most segments North American side-by-side sales rose in the “high-single-digit percent” range YoY, according to the presentation. However, all other segments fell: All-terrain vehicles dropped by a “mid-single-digit percent” range YoY; Three-wheel vehicles dropped by a “high-teen percent” range YoY; Personal watercrafts dropped by a “high-teen percent” range YoY; Pontoons dropped by a “low 20 percent” range YoY; and Snowmobiles dropped by a “high-teen percent” range YoY. BRP gained market share in off-road vehicles, which include side-by-side and all-terrain vehicles, “fueled by the success of our newly introduced models, notably the CanAm Defender HD 11,” Boisjoli said. BRP also launched additional new off-road vehicle models at the end of November, he added. Inventory shrinks 17% BRP’s North American dealer inventory fell 17% YoY in Q3, with double-digit declines across all product categories except off-road vehicles, which dropped 8% YoY, according to the presentation. The powersports manufacturer has nearly reached its preferred inventory levels after reductions throughout the year, Chief Financial Officer Sebastien Martel said during the call. “Aside from snowmobiles, for which the season is still unfolding, the right-sizing of our network inventory is nearly complete,” he said. “This will allow us to better align wholesale with retail.” Revenue up 14% Total revenues rose 14% YoY to CA$2.3 billion ($1.6 billion) in Q3, according to BRP’s earning release. The YoY revenue jump was “driven by higher off-road vehicle deliveries and a favorable product mix following the successful launch of new products,” according to the release. BRP also reported in Q3: Year-round product revenues, accounting for 56% of total revenue, rose 22.1% YoY to $907.8 million; Seasonal product revenues, accounting for 27% of total revenue, fell 1.6% YoY to $434.8 million; and Revenue across parts, accessories and apparel and OEM engines, which accounted for 17% of total revenue, rose 17.8% YoY to $271.5 million. BRP also increased its guidance for revenue for the fiscal year to $6 billion, according to the release. The powersports manufacturer’s search for a new chief executive to replace Boisjoli, who plans to retire , is expected to finish by January 2026, Boisjoli said. Shares of BRP Inc. [Nasdaq: DOOO] were up 6.4%% from market open to $75.29 at market close today. BRP has a market capitalization of CA $7.68 billion. Editor’s note: All amounts have been converted to U.S. dollars.

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BRP’s North American retail sales dip 4%

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