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BRP Inc. (NASDAQ:DOOO) shares are trading lower in Friday’s premarket session after the company reported second-quarter results and revised its FY25 guidance downward.
The company reported second-quarter adjusted EPS of C$0.61, a decrease of C$2.60 per share from the year-ago quarter. In USD, adjusted EPS was $0.45 above the consensus of $0.33.
BRP reported quarterly revenues decrease of 33.7% year-over-year to C$1.841 billion. In USD, revenues of $1.34 billion missed the street view of $1.39 billion.
The revenue decline was primarily due to lower sales volume across all product lines as the company focused on reducing inventory levels and increasing sales programs to boost demand.
Year-Round Products (54% of revenues): Revenues decreased 32.6%, to C$985 million, primarily due to lower sales volume, offset slightly by a favorable product mix and foreign exchange rate.
Seasonal Products (29% of revenues): Revenues dropped 39.6% to C$541.8 million, mainly due to reduced sales volume, with some offset from product mix and foreign exchange gains.
Powersports PA&A and OEM Engines (14% of revenues): Revenues declined 12.2%, to C$258.3 million, attributed to high network inventory and lower retail demand, partially offset by favorable exchange rates.
Marine (3% of revenues): Revenues decreased 53.2% to C$59.4 million, largely due to high dealer inventory, softer consumer demand, and increased sales programs.
Gross profit decreased by 46%, to C$376.5 million, and the margin contracted by 470 bps to 20.4%.
Normalized EBITDA decreased 58% to C$198.5 million, reflecting lower gross margin, partially offset by lower operating expenses.
BRP generated C$253 million in net operating cash flows for the six months ending July, down from C$748.2 million a year earlier, due to lower profitability and unfavorable working capital changes.
Dividend: On September 5, 2024, the company declared a quarterly dividend of C$0.21 per share, payable on October 11, 2024, to shareholders of record at the close of business on September 27, 2024.
2025 Outlook, lowered: BRP sees FY25 revenues of C$7.8 billion – C$8 billion (prior C$8.6 billion – C$8.9 billion) versus consensus C$8.66 billion; The company sees adjusted earnings per share of C$2.75 – C$3.25 (prior C$6 – C$7), versus the consensus of C$6.24.
Price Action: DOOO shares are trading lower by 7.69% to $61.00 premarket at last check Friday.
Posted In: DOOO
