VALCOURT, Que. 鈥� BRP Inc. reported its second-quarter profit and revenue fell compared with a year ago and cut its forecasts as it faces a challenging retail environment.
The maker of Ski-Doo snowmobiles and Sea-Doo watercraft says it earned $7.2 million or nine cents per diluted share for the quarter ended July 31, down from a profit of $338.7 million or $4.26 per diluted share a year earlier.
Revenue in the quarter totalled $1.84 billion, down from $2.78 billion in the same quarter last year.
President and CEO Jos茅 Boisjoli said the results were in line with expectations and reflect the company's ongoing focus on reducing network inventory, which resulted in lower shipment volumes and revenues.
"We have made great strides on that front, but the retail environment is more challenging with the economic context pressuring consumer demand," he said in a press release.
"As such, our priority is to continue to proactively manage production and inventory levels, which leads us to revise our year-end guidance."
In its outlook, BRP says it now expects revenue for its fiscal year to total between $7.8 billion and $8 billion, down from earlier guidance for between $8.6 billion and $8.9 billion.
The company also says it now expects its normalized earnings per diluted share to come in between $2.75 and $3.25 for the year, down from earlier guidance for between $6.00 and $7.00.
Lower shipment volumes and more promotions helped contribute to lower gross profit and gross profit margin, BRP said.
"Overall demand trends have been softer than management expected at the beginning of the year ... and BRP has seen this weakness seep into the North American market," said R小蓝视频 analyst Sabahat Khan in a note.
But the company's balance sheet and progress on rightsizing dealer inventory are encouraging, he said.
On a normalized basis, BRP says it earned 61 cents per diluted share in its latest quarter, down from a normalized profit of $3.21 per diluted share a year ago.
The company says it recently launched its all-electric motorcycle lineup, its official entry into the electric motorcycle industry.
Khan said dealer reception to the new electric motorcycles has been positive though management is cautioning that the product is a "mid-to long-term play on 'clean' commuting."
Shares in BRP fell 4.1 per cent on the Toronto Stock Exchange on Friday to close at $85.30.
This report by The Canadian Press was first published Sept. 6, 2024.
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