Snowmobiles, personal watercraft and other recreational vehicles continue to sell despite rising interest rates and the economic downturn. The result for BRP: higher profits and revenues in the second quarter, where the Quebec multinational once again exceeded analysts’ expectations.
Nevertheless, the manufacturer of Ski-Doo, Sea-Doo and Can-Am is starting to see the impact of increasing interest rates. During the three months ending July 31, “sales programs” were more expensive due to higher financing costs. This did not prevent turnover from growing, but weighed on the increase.
“BRP recorded the best second quarter in its history,” said its president and CEO José Boisjoli, in a press release. Retail (dealer) sales grew an impressive 41%, allowing us to significantly outperform the powersports industry in North America. »
The Valcourt-based recreational vehicle manufacturer posted revenues of $2.8 billion in the second quarter, up 14% compared to the same period last year. Net profits jumped 42.5%, to 338.7 million, or $4.26 per share. Excluding one-time items, adjusted earnings rose 7% to $255.4 million, or $3.21 per share.
This performance exceeded the expectations of analysts surveyed by the firm Refinitiv. They anticipated revenue of $2.7 billion on adjusted earnings per share of $2.97.
“Despite economic uncertainty, we expect BRP to do better than the overall industry in gaining market share and introducing new products,” said analyst Cameron Doerksen of Bank Financial. Nationale, in a note sent to its customers.
The company also adjusted some of its financial forecasts, which reflect a more volatile economic environment. Revenue will continue to grow this year, but the increase is now expected to be between 7 and 10 percent. The previous range called for 9-12% growth.
On a more positive note, adjusted earnings per share are now expected to range between $12.35 and $12.85. This is an improvement from the prior guidance of $12.25 to $12.75 per share.
