Coming into Club, there was a mix of anticipation for new product lines and trepidation that some of the existing product in inventory was getting a little long in the tooth. BRP dealers’ hopes and fears seemed to both have been realized in equal measures. Club highlights included 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. The bad news is that Q2 sales were down 18%, while gross profit decreased 46%!
“Our results were in line with expectations and reflect our ongoing focus on reducing network inventory to maintain our dealer value proposition,” said José Boisjoli, President and CEO of BRP. “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,”
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.
BRP’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. The corresponding reduction in revenue is still tough to explain away: 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.q
Gross profit decreased by $321.1 million, or 46.0%, to $376.5 million for the three-month period ended July 31, 2024, compared to $697.6 million for the three-month period ended July 31, 2023. Gross profit margin percentage decreased by 470 basis points to 20.4% from 25.1% for the three-month period ended July 31, 2023. The decreases in gross profit and gross profit margin percentage were the result of a lower volume sold, higher sales programs, and decreased leverage of fixed costs as a result of reduced shipments. The decrease was partially offset by favourable product mix across most product lines. The decrease in gross profit includes a favourable foreign exchange rate variation of $9 million.
“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 Boisjoli.
