BRP NASDAQ: DOOO reported first-quarter fiscal 2027 results that exceeded management’s expectations, but the powersports manufacturer cut its full-year earnings outlook as it incorporated a sizable tariff headwind from changes to U.S. Section 232 duties.
President and Chief Executive Officer Denis Le Vot said the company delivered “a solid performance” in the quarter, citing sustained retail momentum across key product categories, stronger volumes, cost discipline and a more favorable promotional environment. Revenue rose 30% to CAD 2.4 billion, while normalized EBITDA increased 67% to CAD 334 million. Normalized earnings per share nearly tripled to CAD 1.83.
BRP also generated free cash flow of CAD 367 million in the quarter and ended the period with close to CAD 700 million of cash on its balance sheet. Chief Financial Officer Sébastien Martel said the company’s net leverage ratio was 1.4 times at quarter-end, giving BRP flexibility as it navigates the tariff environment while continuing to invest in growth and return capital to shareholders.
Tariffs Drive Revised Outlook
The central issue on the call was the impact of revised Section 232 tariffs. Martel said the amendment introduced a 25% tariff on the full value of imported snowmobiles and most off-road vehicle models, replacing a prior 50% tariff on metal content only. He said the change represents “a meaningful incremental cost” to BRP’s business.
The company had suspended its fiscal 2027 guidance earlier because of the uncertainty. It now expects the total incremental tariff impact for the year to be CAD 500 million to CAD 550 million. BRP has outlined mitigation actions expected to offset about CAD 200 million of that amount, including overhead discipline, project prioritization, targeted pricing actions and value-chain efficiencies.
Martel said the company’s underlying business trends have improved relative to its initial outlook, with stronger off-road vehicle trends, snowmobile pre-orders above target, improved product mix and higher parts, accessories and apparel dealer orders. Together, those factors are expected to add about CAD 60 million of normalized EBITDA, or CAD 0.60 per share, versus the original outlook.
Even so, the net tariff impact reduces the company’s revised normalized earnings-per-share guidance to CAD 3.00 to CAD 3.50. BRP now expects fiscal 2027 revenue of CAD 9.125 billion to CAD 9.375 billion and normalized EBITDA of CAD 925 million to CAD 975 million. The company continues to expect free cash flow of more than CAD 600 million.
Martel said the outlook does not reflect the full earnings potential of the business, but rather “a deliberate decision in the near term” to protect BRP’s long-term competitive position while implementing targeted mitigation actions. He added that the company intends to resume share repurchases under its normal course issuer bid shortly.
Inventory and Retail Trends Remain Supportive
Le Vot said dealer inventory remains healthy, down 3% from the same period last year, reflecting better alignment between wholesale shipments and retail demand. He said the company has lower snowmobile inventory at the end of the season and better personal watercraft availability ahead of the peak retail period, adding that inventory is near optimal levels.
In North America, excluding snowmobiles, Le Vot said the industry grew at a low-single-digit rate, while BRP retail rose 2%. Off-road vehicles remained the company’s primary growth driver, particularly in utility and premium categories.
In Europe, the Middle East and Africa, BRP retail increased 10%, in line with the industry. Latin America retail grew 7%, with record first-quarter performance in Brazil and Mexico. In Asia Pacific, retail declined 4% for BRP, trailing a low-single-digit industry increase because of the company’s higher exposure to personal watercraft, where late-season demand softened.
Off-Road Vehicles Lead Growth
BRP highlighted continued momentum in side-by-side vehicles and all-terrain vehicles. Le Vot said the North American side-by-side industry grew at a mid-single-digit rate, supported by utility vehicles and continued adoption of cab units. Can-Am retail grew at a high-single-digit rate, including low-teens percentage growth in the utility segment.
Management pointed to the new Defender HD11 as a key contributor. Le Vot said the vehicle’s new Rotax engine, with 95 horsepower, and its towing and cargo capacity helped drive demand. BRP gained more than three points of market share in premium current side-by-side units, according to the company.
In ATVs, Le Vot said the broader industry declined at a low-single-digit rate during the quarter, while BRP retail rose at a low-single-digit rate. He said BRP reached the No. 1 position in the North American ATV industry in April for the first time, supported by the rollout of a new platform across its lineup.
Seasonal Categories Mixed
The 2026 snowmobile season ended in late March with industry retail up at a low-single-digit rate. Le Vot said industry results were driven by heavily discounted non-current inventory from other manufacturers. BRP trailed the industry slightly, but he said the company maintained pricing discipline, achieved more than 70% market share in current units and reduced snowmobile network inventory by 40%.
Le Vot said the company’s spring snowmobile pre-order campaign was one of its most successful ever. During the question-and-answer portion, he said model year 2027 snowmobile pre-orders were up 50% from last year.
Personal watercraft faced weather-related pressure in the quarter, and management said the category was also affected by discounted carryover inventory from other manufacturers. Martel said May trends for personal watercraft were “up quite sizably” versus last year, and Le Vot said retail activity improved in late April and continued into May.
Management Says Pricing Moves Will Be Limited
Analysts pressed management on how much of the tariff burden could be offset through pricing. Martel said pricing is not the largest component of the CAD 200 million mitigation plan, noting that overhead reductions and lean initiatives are bigger levers. Le Vot said investors should not expect “any brutal move” on pricing, adding that BRP intends to preserve its retail momentum and competitive positioning.
Management also said BRP is not making major manufacturing footprint decisions until trade rules become clearer. Martel said the company is evaluating scenarios, including production shifts or plant investments, but does not want to commit “hundreds of millions of capital” before the tariff landscape stabilizes.
BRP said it remains focused on its M28 strategic plan, including product innovation, dealer expansion and international growth. The company reiterated that it expects the North American powersports industry to be flat this year, with BRP-specific market share gains and product mix helping support its revised revenue outlook.
About BRP NASDAQ: DOOO
BRP Inc, operating under the brand name Bombardier Recreational Products, is a leader in designing, manufacturing and distributing recreational vehicles and propulsion systems for winter, on-road, off-road and water lifestyles. The company's diversified portfolio includes snowmobiles, personal watercraft, all-terrain vehicles and roadsters, all powered by in-house Rotax engines. With a focus on innovation and performance, BRP has positioned itself at the forefront of the powersports industry.
At the heart of BRP's product lineup are its flagship Ski-Doo snowmobiles and Sea-Doo personal watercraft, which serve both recreational and professional segments.
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