Canadian recreational vehicle manufacturer BRP Inc., the company behind the iconic Ski-Doo brand, has navigated economic turbulence to post a significant surge in third-quarter profits. However, this financial success is tempered by ongoing anxiety surrounding cross-border trade with the United States, a critical market for the Quebec-based firm.
Robust Financial Performance Amid Economic Headwinds
The Valcourt, Quebec-headquartered company announced a remarkable 150% year-over-year increase in net profit, reaching $76.5 million for the quarter. Revenue also climbed, growing by 14% to hit $2.25 billion. In light of this strong performance, BRP has raised its full-year revenue forecast for 2025 to $8.3 billion, up from earlier projections that ranged between $8.15 billion and $8.3 billion.
CEO Jose Boisjoli acknowledged a cautious consumer environment, particularly for the company's more affordable, entry-level products. He expressed optimism, however, that demand for off-road vehicles will strengthen as interest rates in the United States are expected to decline. "But obviously as we see rates come down … the level of appetite from dealers is also increasing to take on more inventory," Boisjoli stated during a conference call with analysts on Thursday.
The Persistent Sore Spot: Cross-Border Trade Uncertainty
A dominant theme in the company's outlook remains the health of trade relations between Canada and the United States. This is a pivotal issue for BRP, as approximately 60% of its revenue originates from south of the border. The recent statement by U.S. Trade Representative Jamieson Greer, suggesting President Donald Trump could decide to withdraw from the Canada-U.S.-Mexico Agreement (CUSMA) in 2026, has cast a shadow of uncertainty.
Boisjoli addressed these concerns directly, noting that BRP has been actively presenting its perspective on the importance of renewing the trade deal to industry associations and government officials. He admitted the company is trying to avoid a reactive stance to daily political news, "because that would be too painful." The CEO emphasized that all BRP products manufactured in Canada and Mexico are CUSMA compliant and thus not subject to potential 25% U.S. tariffs. According to reports, the majority of BRP inventory sold in the U.S. is produced in Mexico, where 70% of its manufacturing takes place.
Product Mix and Consumer Resilience
Despite broader economic caution, BRP's product launches continue to find success. The company's new Can-Am Defender, a robust side-by-side vehicle, helped drive record sales in October. In the snowmobile segment, overall revenue saw a slight dip of 4%, though the company maintained a commanding 60% market share from the previous spring.
Boisjoli highlighted a key factor insulating the company from deeper sales slumps: its customer base. He revealed that the average income of a BRP customer is US$175,000 per year. This demographic strength helps buffer sales of higher-priced vehicles even when demand for entry-level models softens. "The high-end products are selling well, but the lower-end models — the more entry-level models — traffic is lighter," he explained.
As BRP rides the wave of its current profitability, its future trajectory remains intricately linked to the complex and often unpredictable landscape of international trade policy. The company's ability to maintain its momentum will depend on both sustained consumer demand for its premium products and the stability of the trade framework that allows it to access its most vital market.
