Diego Thomazini
BRP disclosed on Friday that revenue fell 16.4% year-over-year in FQ1 to $2.032B. The Canada-based company noted that the decrease was primarily due to a lower volume across most product lines, driven by its focus on reducing network inventory levels, and higher sales programs. The decrease was partially offset by a favorable product mix across most product lines and favorable pricing across all product lines. The decrease includes a favorable foreign exchange rate variation of $17 million.
North American retail sales for powersports products segment decreased by 5% for the quarter. The decrease was due to seasonal products driven by lower industry volumes, partly offset by an increase in year-round products retail sales driven by continued market share gains in SSV and ATV.
BRP’s (NASDAQ:DOOO) gross profit margin percentage decreased by 210 basis points to 23.6% from 25.7% for the quarter. The decline was the result of a lower volume sold, and higher sales programs. The decrease was partially offset by favorable product mix across most product lines and favorable pricing across all product lines. The decrease in gross profit includes a favorable foreign exchange rate variation of $7 million. Operating expenses increased by 4.2% during the quarter. The increase was mainly attributable to higher R&D expenses to support future growth and restructuring and reorganization costs. EPS was reported at C$0.95 vs. C$2.38 a year ago.
Looking ahead, BRP (DOOO) sees full-year revenue of C$8.6 billion to C$8.9 billion vs. C$9.4 billion consensus and EPS of C$6.00 to C$7.00 vs. C$7.82 consensus. The company warned that dealers’ profitability is under more pressure than anticipated given the current macroeconomic context, a more competitive landscape, and high interest rates. The economic backdrop prompted BRP (DOOO) to adjust its production to further reduce network inventory while continuing to maximize retail sales.
Shares of BRP (DOOO) fell 9.45% in premarket trading to $60.10.
