BRP Posts Quarterly Loss but Raises Full-Year Outlook
On September 3, BRP Inc. (NASDAQ:DOO) reported a second-quarter loss due to tariffs despite strong revenue growth and robust demand in its off-road vehicle segment. Revenue increased by 18.5% year-over-year to $2.24 billion; however, normalized diluted EPS turned negative at -$0.18 per share compared to $0.92 the previous year. Despite these challenges, management raised full-year revenue guidance to between $9.23 billion and $9.475 billion and increased normalized EPS guidance by $1 to a range of $4–$4.5. The off-road segment drove much of BRP's resilience, with Can-Am capturing nearly one-third of the North American side-by-side market and expanding its utility vehicle production capacity significantly. However, gross margin fell sharply due to Section 232 tariffs and other costs, including a $74.8 million supplier payment. Management now expects annual net tariff exposure at around $200–$225 million with additional headwinds expected in the coming year. Despite hedge fund ownership declining slightly from 24 funds to 19, BRP's forward P/E of 15.24 suggests a reasonable valuation for a company growing revenue near 20%. The market is closely watching whether management’s guidance will hold as tariff costs and demand shifts in personal watercraft could impact future performance.
Topics: guidance_update loss off-road_vehicles revenue tariffs