BRP raises forecasts after strong second quarter results

BRP said the second quarter saw strong demand for its products. (Photo: Canadian Press)

VALCOURT — BRP, maker of Ski-Doo snowmobiles and Sea-Doo watercraft, posted a profit of $237.7 million (M$) in the second quarter on Wednesday, up 28% on revenue year-over-year. After recording an increase, we raised our forecast. Previously, the stock rose more than his 9% cents in the afternoon.

BRP CEO José Boisjoli said in a statement:

“As we enter the second half of the year, demand for our products continues to be strong across our product portfolio and the market. Current improvements in our supply chain and additional capacity put us well-positioned to expect a record second half.” I have.”

BRP earned $2.94 per share for the quarter ended July 31. That was his $212.9 million, or $2.46 per share, in the same period last year.

Its revenue totaled $2.44 billion, compared to $1.9 billion in the same quarter last year.

Excluding one-time items, normalized earnings per share were $2.94 compared to $2.89 a year ago.

BRP’s outlook is for full-year revenue growth of 26% to 31% year-over-year. Previous forecasts were for growth of 24% to 29%.

The BRP also increased its guidance for normalized earnings per share for the fiscal year to $11.65 from $11.30, up from previous guidance targeting earnings of $11.00 to $11.35.

‘Fairly optimistic’ about supply chain

The company said it saw strong demand for its products in the second quarter as it continued to deal with supply chain disruptions and an increasingly inflationary environment.

Supply chain disruptions have resulted in more finished goods waiting for missing components, but BRP has been able to optimize the shipment of missing components to its dealer network, resulting in substantial retail viability. It has achieved high conversion rates for completed units in 2018.

Additionally, supply chain issues impacted North American retail sales of powersports products, which were down 14% in the most recent quarter compared to the same period last year.

In a conference call with analysts about the results, the company said it was “very optimistic” about the state of its supply chain for the rest of the year, noting fewer instances of disruption.

During the meeting, the company also discussed the cyberattack it suffered last month.

After the attack, the company said that while customer personal information was not compromised, employee personal information was. In particular, the hacker was able to access the credentials of workers who used BRP computers for personal purposes.

On a conference call, Boisjoli said the company had been able to “contain the situation and limit its impact,” but added that there had been delays in delivering products to customers.

“We expect to make up for lost sales throughout the second half of the year,” he said.

BRP said an investigation into the cyberattack is ongoing.

The BRP’s action took $8.56, or 9.6%, on the Toronto Stock Exchange, which was trading at $98.05 Wednesday afternoon.

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