BRP, Inc., the parent of the Ski-Doo and Lynx powersports brands, said the first quarter of fiscal 2026 was marked by continued softer consumer demand exacerbated by the uncertainty surrounding changes to global tariffs and trades regulations.

“As the company continued to focus on reducing network inventory levels on Seasonal Products and managed industry slowdown on Year-Round Products, the volume of shipments and revenues decreased compared to the same period last year,” the company said in an earnings release. “The decrease in the volume of shipments, the higher sales programs due to the sustained promotional environment and the decreased leverage of fixed costs have led to a decrease in the gross profit and gross profit margin compared to the same period last year.” The company said the decrease was partially offset by production efficiencies.

The company’s North American retail sales were said to be flat for the three-month period ended April 30, 2025. Following late snowfall, the company reportedly delivered strong Snowmobile retail sales during the end of the season, which allowed to outpace the industry and reduce network inventory.

The increase in Seasonal Products retail sales were offset by a decrease in Year-Round Products retail sales mainly due to the industry’s slowdown.

BRP, Inc. reports in the Canadian dollar (CN$) currency unless otherwise noted.

Revenues decreased 7.7 percent to CN$1.85 billion for the three-month period ended April 30, compared to CN$2.00 billion for the corresponding year-ago period ended April 30, 2024. The decrease in revenues was said to be primarily due to a lower volume sold across most product lines, as a result of the industry’s slowdown in Year-Round Products and continued focus on reducing network inventory levels in Seasonal Products. The decrease was also reportedly due to higher sales programs across most product lines. The decrease was said to be partially offset by favorable pricing across most product lines. The decrease includes a favorable foreign exchange rate variation of CN$33 million.

“We delivered a sound first-quarter performance despite the current context, with results in line with expectations. Driven by a solid end-of-season in Snowmobile, we slightly outperformed the North American Powersports industry with retail sales holding steady compared to Q1 last year,” said José Boisjoli, president and CEO, BRP, Inc.

Year-Round Products: Revenues from Year-Round Products, which represented 60 percent of Q1 revenues, decreased 4.5 percent, to CN$1.11 billion for the fiscal first quarter, compared to CN$1,157.8 million for the prior-year fiscal Q1 period. The decrease in revenues from Year-Round Products was said to be primarily attributable to a lower volume of units sold across most product lines as a result of softer consumer demand, unfavorable product mix in 3WV and higher sales programs across most product lines. The decrease was rreportedly partially offset by favorable product mix in ATV and SSV, and favorable pricing across all product lines. The decrease reportedly includes a favorable foreign exchange rate variation of CN$19 million.

Seasonal Products: Revenues from Seasonal Products, representing 23 percent of Q1 revenues, decreased 21.7 percent, to CN$419.2 million for the first quarter, compared to CN$535.1 million for the corresponding Q1 period last year. The decrease in revenues from Seasonal Products was said to be primarily attributable to a lower volume of units sold across most product lines as a result of continued focus on reducing network inventory levels, unfavorable product mix in Snowmobile and higher sales programs. The decrease was reportedly partially offset by favorable product mix and pricing on PWC. The decrease reportedly includes a favorable foreign exchange rate variation of CN$6 million.

PA&A and OEM Engines: Revenues from PA&A and OEM Engines, comprising 17 percent of Q1 revenues, increased 4.9 percent, to CN$321.9 million for the first quarter, compared to CN$307.0 million for the corresponding Q1 period last year. The increase in revenues from PA&A and OEM engines was said to be primarily attributable to higher demand in parts following a strong end of Snowmobile season. The increase was said to be partially offset by lower volume of OEM engines and Marine PA&A sold. The increase reportedly includes a favorable foreign exchange rate variation of CN$8 million.

North American Retail Sales
The company’s North American retail sales were said to be flat year-over-year for the first quarter. Seasonal Products retail sales were up, reportedly driven by strong end-of-season retail in Snowmobile following late snowfall, offset by a decrease in Year-Round Products retail sales mainly due to the industry’s slowdown.

  • North American Year-Round Products retail sales decreased in the low-teens range compared to the year-ago Q1 period. The Year-Round Products industry sales decreased in the mid-single digits over the same period.
  • North American Seasonal Products retail sales increased on a percentage basis in the high-twenties range compared to the three-month period ended April 30, 2024. The Seasonal Products industry sales increased on a percentage basis in the low-teens range over the same period.

Profitability & Expenses
Gross profit decreased 24.3 percent, to CN$394.8 million for the first quarter, compared to CN$521.7 million for the year-ago Q1 period. The decrease in gross profit reportedly includes an unfavorable foreign exchange rate variation of CN$10 million.

Gross margin decreased 470 basis points year-over-year to 21.4 percent of net sales in the first quarter. The decrease in gross margin percentage was said to be the result of a lower volume of units sold, higher sales programs and decreased leverage of fixed costs due to reduced production. The decreases were partially offset by favorable pricing across most product lines and production efficiencies.

Operating expenses decreased by CN$30.5 million, or 9.2 percent, to CN$300.9 million for the first quarter, compared to CN$331.4 million for the year-ago first quarter. The decrease in operating expenses was said to be mainly attributable to lower G&A expenses due to cost optimization, lower S&M expenses and lower restructuring and reorganization costs. The decrease in operating expenses reportedly includes an unfavorable foreign exchange rate variation of CN$13 million.

Normalized EBITDA (Adjusted EBITDA) decreased by CN$106.6 million, or 34.7 percent, to CN$200.8 million for the first quarter, compared to CN$307.4 million for the year-ago Q1 period. The decrease in Normalized EBITDA was said to be primarily due to lower gross profit.

Net income increased by CN$118.5 million, or 278.8 percent, year-over-year to CN$161.0 million in the first quarter, compared to CN$42.5 million for the year-ago first quarter. The increase in net income was said to be primarily due to a favorable foreign exchange rate variation on the U.S. denominated long-term debt and lower operating expenses. The increase was reportedly partially offset by lower operating income resulting from a lower gross profit and gross profit margin.

Net loss decreased by CN$39.0 million, or 78.2 percent, to a loss of CN$10.9 million in the first quarter, compared to a loss of CN$49.9 million in the year-ago Q1 period. The decrease in net loss was said to be primarily due to a higher volume of units sold, lower sales programs, and lower operating costs as a result of restructuring.

Liquidity and Capital Resources
Consolidated net cash flows generated from operating activities totaled CN$214.5 million for the three-month period ended April 30, 2025, compared to CN$141.4 million generated for the three-month period ended April 30, 2024. The increase was said to be mainly due to favorable changes in working capital and lower income taxes paid, partially offset by lower profitability. The favorable changes in working capital were reportedly the result of increased trade payables and accruals due to higher average payment terms. The favorable changes in working capital were said to be partially offset by a reduction in account receivables and provisions level, resulting from a lower volume of units sold.

The company invested CN$51.4 million of its liquidity in capital expenditures for the introduction of new products and modernization of the company’s software infrastructure to support future growth.

During the three-month period ended April 30, 2025, the company also returned CN$15.6 million to its shareholders through quarterly dividend payouts. The company did not repurchase subordinate voting shares under its share repurchase programs.

Outlook
BRP, Inc. said it will continue to refrain from providing guidance for fiscal 2026 until the situation around potential tariffs and changes to trade regulations further develops.

“Looking ahead, given the uncertainty, we are still refraining from making financial projections at this time. In the short term, although demand remains soft due to a challenging macro environment, our strong product portfolio and leaner inventory levels position us favorably for a rebound. Over the longer term, our decision to double down on our core Powersports activities, combined with our team’s ingenuity and our commitment to pushing technology and innovation, provide the foundations for sustained leadership,” concluded CEO Boisjoli.

Image courtesy Ski-Doo/BRP, Inc.