Ski-Doo maker BRP feels impact of slow consumer spending as profits plunge
By The Canadian Press on November 30, 2023.
BRP Inc. reported its third-quarter profit and revenue fell compared with a year ago and lowered its financial guidance for its full year. Guests of BRP's Club Ski-Doo check out the long-awaited 2020 Ski-Doo Summit X Monday Feb. 18, 2019 in Grapevine, Texas. THE CANADIAN PRESS/AP-Brandon Wade/AP Images for BRP
VALCOURT, Que. – BRP Inc. saw its third-quarter profits tumble by half from a year earlier, as the recreational vehicle maker felt the squeeze of sluggish consumer spending.
The financial drop marked a sharp U-turn from the previous quarter, when earnings jumped 42 per cent year-over-year and optimism rode high atop near-record sales for the period.
“Consumer confidence declined since July,” CEO José Boisjoli told analysts on a conference call Thursday, citing weaker demand for the Ski-Doo maker’s products.
“In October, the decline happened in almost all markets, but especially international. And the trend is continuing in November.”
Sea-Doos, three-wheeled motorcycles and pontoon boats all saw lower sales in the quarter ended Oct. 31. “Marine had a tough quarter in particular,” Boisjoli said.
The consumer slowdown also pushed BRP to reduce its financial forecast. The company is now projecting normalized earnings per share in its fiscal 2024 year will drop six to eight per cent, instead of rising by up to seven per cent as previously predicted.
“Generally, we are expecting a softer industry,” Boisjoli said. But he qualified that demand for premium products remains strong, including for its pricier three-wheeled and side-by-side vehicles.
BRP reported a profit of $63.1 million or 81 cents per diluted share for the quarter, down 55 per cent from $141.6 million or $1.76 per diluted share a year earlier.
Revenue for the quarter fell 10 per cent to 2.47 billion from $2.71 billion in the same quarter last year.
Normalized earnings per share for BRP’s most recent quarter amounted to $3.06 per diluted share, a 16 per cent drop from $3.64 per diluted share the year before.
In its outlook, the company now says revenue for its 2024 financial year is expected to grow four to five per cent, compared with earlier expectations for growth of seven to 10 per cent.
This report by The Canadian Press was first published Nov. 30, 2023.
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