BRP, the Canadian leisure-vehicle manufacturer, experienced a decline in profit and revenue during the third quarter of this year. This resulted from weaker demand, particularly in international markets. As a result, the company has revised its guidance for the next fiscal year.
Decreased Profit and Revenue
Net income for BRP decreased by over half, declining from C$141.6 million to C$63.1 million compared to the same period last year. On a per-share basis, this decline was from C$1.76 to C$0.81. However, normalized earnings per share, an adjusted figure, remained in line with expectations at C$3.06.
Revenue for the period came in at C$2.47 billion, down from C$2.71 billion in the previous year, falling short of analyst forecasts for a decline to C$2.65 billion.
Weaker Demand and Adjusted Guidance
BRP attributed the decline in profit and revenue to weaker demand, especially in international markets. Chief Executive Jose Boisjoli explained that the company has responded by adjusting production and deliveries to manage network inventory and protect its dealer-value proposition.
As a result, BRP has downgraded its total revenue growth forecast for the next fiscal year to a range of 4% to 5%, compared to its previous target of 7% to 10%. Adjusted earnings per share are now expected to be between C$11.10 and C$11.35, down 6% to 8%. Net income is projected to be in the range of C$740 million and C$765 million.
Conclusion
BRP's shares experienced a sharp decline following the announcement of lower third-quarter profit and revenue. The company attributes these results to softer demand, particularly in international markets. BRP has taken measures to manage inventory and protect its dealer-value proposition. Moving forward, the company has adjusted its guidance for the next fiscal year, anticipating lower revenue growth and adjusted earnings per share.
