BRP (DOO) Q3 2025 earnings summary

Executive summary

• Q3 FY25 results exceeded expectations due to disciplined execution, earlier snowmobile shipments, and tight expense management, despite a 17.5–18% revenue decline and lower net income.

• Initiated sale of Marine businesses to focus on core Powersports, with all financials now reflecting continuing operations.

• Achieved a 10% reduction in network inventory, with ORV inventory down 22% year-to-date, ahead of plan.

• North American retail sales declined 11% year-over-year, impacted by soft industry trends and high competitor inventory.

• Continued execution on long-term strategy, emphasizing innovation and inventory discipline.

Financial highlights

• Q3 FY25 revenue was CA$1,955.7M–$1,956M, down 17.5–18% year-over-year, with normalized EBITDA at CA$264M, and normalized EPS at $1.16.

• Gross profit was CA$430M, with a margin of 22.0%, down from 27.1% last year due to lower production volumes and higher sales programs.

• Net income for Q3 was CA$27.3M, with diluted EPS at CA$0.37, down 68–69.7% year-over-year.

• Free cash flow for Q3 was CA$81.3M, down 62% year-over-year.

• For the nine months ended Oct 31, 2024, revenues were $5,732.1M, down 22% year-over-year.

Outlook and guidance

• FY25 revenue guidance is CA$7.6B–$8.0B, normalized EBITDA CA$890M–$1,070M, and normalized EPS (diluted) $2.75–$4.75, all reflecting continuing operations.

• Net income guidance lowered to CA$90M–$120M.

• Capital expenditures expected at ~$430M for FY25.

• Anticipates a flattish Powersports industry in FY26, with continued focus on inventory and cost management.

• Effective tax rate expected at -23.5%.