Ski-Doo and Sea-Doo manufacturer BRP Inc. has revised its full-year 2027 profit forecast downward, citing the impact of recent U.S. tariff policy changes on imported steel. The company now expects profits between $215 million and $250 million, a significant drop from the previously projected $410 million to $480 million range.
Q1 Earnings Report
On Thursday, BRP released its first-quarter earnings, reporting a 20.9% decline in profits to $127.3 million compared to the same period last year. However, revenues surged 29.5% to approximately $2.4 billion, driven by higher off-road vehicle (ORV) shipments and a favorable product mix. The company also credited increased personal watercraft (PWC) shipments for the revenue boost.
Tariff Impact
CEO Denis Le Vot highlighted the challenging trade environment, stating, "The quarter was marked by a significant shift in the North American tariff landscape. While this created uncertainty, our team has moved quickly to identify mitigation measures." These measures include optimizing direct costs, reviewing the value chain for efficiency gains, and implementing targeted pricing adjustments.
The revised guidance reflects the U.S. decision to tax the entire value of imported steel products rather than just the metal component, affecting BRP's recreational vehicles. The company also lowered its normalized EBITDA guidance to $925 million to $975 million, down from $1.175 billion to $1.275 billion.
Revenue Outlook
Despite the profit warning, BRP raised its 2027 revenue guidance to between $9.125 billion and $9.375 billion, up from the previous $8.9 billion to $9.15 billion. The company noted that the revised outlook incorporates positive business trends and net tariff costs.
Segment Performance
BRP reported that North American Powersports retail sales declined by 7% in the first quarter, primarily due to strong end-of-season snowmobile sales last year. Normalized EBITDA for the quarter reached $334.4 million, a 66.5% increase year-over-year, with normalized diluted earnings per share rising to $1.83 from $1.36.
Le Vot emphasized that the company's Q1 results exceeded expectations, driven by stronger volumes, disciplined cost management, and a favorable promotional environment despite early tariff impacts. The company's guidance for fiscal 2026 remains unchanged.
