BRP Inc. was still dealing with softer demand in the fiscal 2025 fourth quarter, but the decline in revenues was also exacerbated the company’s objective to reduce network inventory. Company revenues for the three-month period ended January 31 declined 19.7 percent year-over-year to CN$2.10 billion as the volume of shipments declined.

The decrease for the period was said to include a favorable foreign exchange rate variation of CN$33 million.

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

The decrease in the volume of total shipments, the higher sales programs due to increased promotional intensity and the decreased leverage of fixed costs as a result of reduced production 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 favorable pricing and production efficiencies.

Year-Round Products (54 percent of Q4-FY25 revenues)
Revenues from Year-Round Products decreased 17.4 percent to CN$1.13 billion for the quarter, compared to CN$1.36 billion in the prior-year quarter. The decrease in revenues from Year-Round Products was said to be primarily attributable to a lower volume of units sold across all product lines as a result of softer demand, unfavorable product mix in SSV and higher sales programs.

The decrease was partially offset by favorable pricing across all product lines. The decrease includes a favorable foreign exchange rate variation of CN$26 million.

Seasonal Products (32 percent of Q4-FY25 revenues)
Revenues from Seasonal Products decreased 28.9 percent, to CN$677.6 million for the three-month, compared to CN$952.6 million for the corresponding period ended January 31, 2024. The decrease in revenues from Seasonal Products was said to be primarily attributable to a lower volume of units sold across all product lines as a result of softer demand, unfavorable product mix in Snowmobile and higher sales programs.

The decrease was partially offset by favorable product mix on PWC and Sea-Doo pontoon, as well as favorable pricing across all product lines. The decrease includes a favorable foreign exchange rate variation of CN$2 million.

PA&A and OEM Engines (14 percent of Q4-FY25 revenues)
Revenues from PA&A and OEM Engines decreased 0.7 percent, to CN$292.9 million for Q4, compared to CN$295.0 million for prior-year Q4 period. The decrease in revenues from PA&A and OEM engines was said t be primarily attributable to softer demand in PA&A.

The decrease was partially offset by favorable product mix on OEM engines and favorable pricing on most product lines. The decrease also includes a favorable foreign exchange rate variation of CN$5 million.

North American Retail Sales
The company’s North American retail sales decreased 21 percent for the three-month period ended January 31, 2025 compared to the the prior-year Q4 period. The decrease is mainly explained by lower industry volumes in Snowmobile and market share loss in Off-Road Vehicles due to high non-current inventory from other OEMs.

  • North American Year-Round Products retail sales decreased on a percentage basis in the low-teens range compared to the prior-year period. BRP said North American Year-Round Products industry sales decreased on a percentage basis in the low-single digits over the same period.
  • North American Seasonal Products retail sales decreased on a percentage basis in the low-30s range compared to the three-month period ended January 31, 2024. BRP said the North American Seasonal Products industry sales decreased on a percentage basis in the mid-20s range over the same period.

Income Statement Summary
Gross profit decreased by CN$231.1 million, or 35.0 percent, to CN$429.4 million for the fourth quarter, compared to CN$660.5 million for the three-month period ended January 31, 2024. Gross profit margin percentage decreased 480 basis points to 20.5 percent of revenue for Q4, compared to 25.3 percent for the prior-year Q4 period. The decreases in gross profit and gross profit margin percentage were reportedly the result of a lower volume of units sold, higher sales programs, decreased leverage of fixed costs as a result of reduced production, and higher warranty costs. The decreases were partially offset by favorable pricing across most product lines and production efficiencies.

The decrease in gross profit includes a favorable foreign exchange rate variation of CN$2 million.

Operating expenses decreased by CN$12.8 million, or 3.9 percent, to CN$317.4 million for the fourth quarter, compared to CN$330.2 million for the prior-year fourth quarter. The decrease in operating expenses was said to be mainly attributable to lower G&A expenses due to cost optimization and lower R&D expenses. The com-any said the decrease was partially offset by higher restructuring and reorganization costs.

The decrease in operating expenses includes an unfavorable foreign exchange rate variation of CN$9 million.

Normalized EBITDA decreased by CN$192.8 million, or 44.6 percent, to CN$239.8 million for the three-month period ended January 31, 2025, compared to CN$432.6 million for the three-month period ended January 31, 2024. The decrease in normalized EBITDA was primarily due to lower gross profit.

Net income (loss) decreased by CN$347.3 million, or 114.7 percent, to a net loss of CN$44.5 million for the fourth quarter, compared to net income of CN$302.8 million for the prior-year fourth quarter. The decrease in net income was said to be primarily due to a lower operating income, resulting from a lower gross profit and an unfavorable foreign exchange rate variation on the U.S. denominated long-term debt. The decrease was partially offset by a lower income tax expense.

Net loss from discontinued operations increased by CN$60.2 million, or 52.4 percent, to a loss of CN$175.1 million for the fiscal 2025 quarter, compared to a net loss of CN$114.9 million for the fiscal 2024 fourth quarter. The increase in net loss was said to be primarily due to an impairment charge taken on the Marine businesses assets held for sale during the three-month period ended January 31, 2025.

Fiscal 2025 Full-Year Summary

  • Revenues amounted to CN$7.83 billion, a decrease of 21.4 percent compared to fiscal 2024;
  • BRP achieved revised FY25 guidance adjusted for Marine businesses discontinued operations with Normalized diluted earnings per share of CN$4.68;
  • Provided shareholder returns through CN$277.0 million deployed in share repurchases and dividend payments; and
  • North American network inventory decreased by 13 percent compared to the prior year, or 18 percent when excluding snowmobiles for which network inventory increased due to lower industry retail caused by late snowfall.

Fiscal 2026 Full-Year Guidance
Given the ongoing global tariff disputes and the uncertainty surrounding any potential changes to trade regulations, the company has decided to defer providing financial guidance for fiscal 2026. This uncertainty has also had a negative impact on consumer demand, making it difficult to offer reliable projections at this time.

Liquidity and Capital Resources
Consolidated net cash flows generated from operating activities totaled CN$740.1 million for the twelve-month period ended January 31, 2025 compared to CN$1.69 billion generated for the twelve-month period ended January 31, 2024. The decrease was said to be mainly due to lower profitability and unfavorable changes in working capital, partially offset by lower income taxes paid. Changes in working capital were the result of maintaining higher provisions, compared to the prior year where more provisions were created due to a slowdown in demand and a sustained promotional intensity in the industry. The unfavorable changes in working capital were also the result of a reduction in trade payables and accruals, which reflected reduced production. The unfavorable changes in working capital were partially offset by a reduction in inventory levels.

The company invested CN$425.5 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 twelve-month period ended January 31, 2025, the company also returned CN$277.0 million to its shareholders through quarterly dividend payouts and its share repurchase programs.

Dividend
On March 25, 2025, the company’s Board of Directors declared a quarterly dividend of CN$0.215 per share for holders of its multiple voting shares and subordinate voting shares. The dividend will be paid on April 18, 2025 to shareholders of record at the close of business on April 4, 2025.

“BRP demonstrated its agility throughout fiscal 2025 by rapidly adapting to softer market conditions. We were the first OEM to proactively adjust shipments to reduce network inventory and we have achieved our objective. As anticipated, our leaner inventory position compared to competitors resulted in short-term market share loss but protected our dealer network and the value of our brands. In this volatile context, we have outpaced the off-road industry with our current models, which speaks highly about the attractiveness of our lineups,” said José Boisjoli, president and CEO, BRP, Inc.

“Looking ahead to fiscal 2026, the ongoing global tariff disputes have created economic uncertainty, making financial projections more challenging at this time. Over the longer term, our strategic decision to double down on Powersports should allow us to solidify our industry leadership by pushing innovation further and capitalizing on growth opportunities. With a product portfolio that is second-to-none, a strong dealer network and a healthy balance sheet, we are well positioned to sustain profitable growth,” concluded Boisjoli.

Image courtesy Ski-Doo/BRP, Inc.