BRP (DOO) Q2 2025 earnings summary

Executive summary

• Q2 revenue declined 33.7%–34% year-over-year to CA$1.84B, driven by intentional inventory reductions, lower shipments, and soft consumer demand amid a challenging macroeconomic environment and high promotional activity.

• Net income dropped to CA$7M, with normalized EBITDA down 58% to CA$198.5M and normalized diluted EPS at CA$0.61.

• North American Powersports retail sales declined 18% year-over-year, with market share losses due to aggressive competitor promotions and normalization of competitor supply.

• Latin America retail sales rose 18%, driven by strong performance in Mexico and Brazil.

• Product innovation included the launch of Can-Am electric motorcycles and new off-road and watercraft models.

Financial highlights

• Gross profit was CA$376.5M, with a margin of 20.4%, down from 25.1% last year due to lower production volumes and higher sales programs.

• Operating income fell 80% to CA$74.4M; normalized EBITDA margin was 10.8% (down from 17.0%).

• Free cash flow was CA$6M for Q2 and CA$72.2M for six months, both sharply lower year-over-year.

• Dividend per share increased 16.7% to CA$0.21; share repurchases totaled CA$167.8M.

• Six-month revenues declined 25.6% to CA$3,873.6M; normalized EBITDA for the period was CA$445.7M, down 47.6%.

Outlook and guidance

• FY25 revenue guidance lowered to CA$7.8B–$8.0B, normalized EBITDA to CA$890M–$940M, and normalized EPS to CA$2.75–$3.25.

• Net income guidance reduced to CA$90M–$120M; capital expenditures projected at ~$475M.

• Sequential improvement anticipated in Q3 for revenue, normalized EBITDA, and normalized EPS.

• Market softness and high promotional activity expected to persist through H2 and at least the first half of next year.

• Free cash flow expected to be just above CA$200M for the year.