BRP (DOO) Q3 2025 earnings summary

Executive summary

• Q3 FY25 results exceeded expectations due to disciplined execution, earlier snowmobile shipments, and tight expense management, despite revenues declining 17.5% year-over-year to $1,955.7M.

• Retail sales declined as anticipated, impacted by soft industry trends and high competitor inventory, with North American retail sales down 11%.

• Achieved a 10% reduction in network inventory, with ORV inventory down 22% year-to-date, ahead of plan.

• Initiated the sale of marine businesses to focus on core powersports activities, with all financials now reported as continuing operations.

• Continued execution on long-term strategy, emphasizing innovation, inventory discipline, and progress in network inventory reduction.

Financial highlights

• Q3 FY25 revenue was $1,955.7M, down 17.5% year-over-year; normalized EBITDA was $264.1M, and normalized EPS was $1.16, all above expectations.

• Net income for Q3 was $27.3M, with diluted EPS at $0.37, down 68% from prior year.

• Gross profit was $430.0M with a margin of 22.0%, down from 27.1% last year due to lower production volumes and higher sales programs.

• Free cash flow for Q3 was $81.3M, down 62% year-over-year; for nine months, it was $133.1M, down from $694.5M last year.

• For the nine months ended Oct 31, 2024, revenues were $5,732.1M, down 22.0% year-over-year.

Outlook and guidance

• FY25 revenue guidance is $7.6B to $8.0B for continuing operations, with normalized EBITDA expected at $1,020M–$1,070M and normalized EPS (diluted) at $4.25–$4.75.

• Guidance now reflects only continuing operations, with improved EBITDA and EPS outlook due to marine exit.

• Net income guidance lowered to $90M–$120M.

• Core Powersports business expected to generate over $300M in free cash flow for FY25.

• Anticipates a flat industry for next year, with cautious dealer inventory management and modest top-line growth in the second half.