BRP Inc. saw strong Sea-Doo and off-road vehicle sales drive up total profits by 28 per cent year over year in its latest quarter, beating expectations.
Even with the pandemic in the rearview mirror — COVID-19 propelled demand for powersport vehicles across the globe as consumers sought to roam outdoors — the Ski-Doo maker ramped up revenues by more than a third to $2.43 billion in the three months ended April 30 compared with a year earlier.
On a call with analysts Thursday, BRP chief executive José Boisjoli said the company outpaced the North American powersports industry thanks to consumer demand that was dented but not broken by inflation and higher interest rates.
"The consumer would pay eight per cent more (year over year) on a monthly payment. That factors in inflation, interest rates, etc. So yes, it's higher. But on the other side, now we are offering promotions that's certainly helping to drive retail," Boisjoli said.
The higher prices are not a "significant" deterrent for buyers, he said, but does allow BRP to cover higher costs.
"The big tailwind we got this quarter is finally we're getting ahead of inflation. So all the pricing action we took over the last several years is now more than offsetting the inflation."
The 20-year CEO also said he still expects to see market share gains — particularly with all-terrain vehicles — fuelled partly by new products, despite a "flat industry this year."
He reiterated the company's outlook for the fiscal year, which forecasts a revenue rise of between nine per cent and 12 per cent and normalized earnings per diluted share of between $12.25 and $12.75 — a jump of between 23 per cent and 29 per cent.
On Thursday, the company reported a first-quarter profit of $154.5 million, up from $121.0 million in the same quarter last year.
Profits amounted to $1.92 per diluted share for the quarter ended April 30, up from $1.46 per diluted share a year earlier.
Revenue totalled $2.43 billion, up from $1.81 billion in the same quarter last year, said the company, whose roots date back to 1942 with the founding of Bombardier Inc.
Normalized earnings amounted to a profit of $2.38 per diluted share, up from a normalized profit of $1.66 per diluted share a year ago — and nudging past analyst expectations of $2.34 per share, based on estimates compiled by financial markets data firm Refinitiv.