BRP snowmobiles, personal watercraft and other recreational products are no longer selling as quickly as during the pandemic. In addition to seeing its profitability deteriorate in the fourth quarter, the Quebec manufacturer does not expect growth to be there over the next year.
Alongside quarterly results which fell below analysts’ expectations, the Valcourt-based multinational also unveiled forecasts on Thursday indicating that its revenues and profits should contract compared to the financial year which ended on January 31. .
Inventories are higher at BRP dealerships, which encourages the manufacturer of Ski-Doo, Sea-Doo and Can-Am to slow down production.
“BRP indicates that it will reduce its snowmobile production by around 30% following a season affected by low snowfall,” underlines analyst Cameron Doerksen, of National Bank Financial, in a note sent to its customers by email.
The Quebec company will remain profitable, but its profits and revenues are expected to contract during the next fiscal year. However, analysts did not expect such steep declines. BRP expects its annual turnover to range between 9.1 and 9.5 billion, while analysts expect, on average, around 10 billion.
“The main obstacle is the drop in volumes of products shipped [chez les concessionnaires] », Indicates analyst Benoit Poirier, of Securities Desjardins.
BRP saw its net profits plunge about 50% to $188 million, or $2.46 per share, in the fourth quarter. Its revenues contracted by 12.5%, to 2.7 billion. Unsurprisingly, snowmobile sales were disappointing in the North American market while the white carpet was delayed in many places. Analysts surveyed by the firm Refinitiv expected a profit per share of $2.60 on revenues of 2.8 billion.
For the year, the recreational vehicle maker’s profits fell 14% to $744.5 million, while revenues rose slightly to $10.4 billion.