BRP Inc.

BRP reported Q1 fiscal '27 revenue of $2.4 billion, up 30% year over year. Gross profit was $562 million, with gross margin at 23.5%, up 210 basis points from last year. Normalized EBITDA increased 67% to $334 million and normalized EPS nearly tripled to $1.83. Free cash flow was $367 million, and cash on the balance sheet was close to $700 million with net leverage at 1.4x. For fiscal '27, BRP raised revenue guidance to $9.125 billion-$9.375 billion, normalized EBITDA to $925 million-$975 million, and normalized EPS to $3.00-$3.50. It expects more than $600 million of free cash flow. Management said the outlook assumes about $60 million of normalized EBITDA upside from stronger ORV, snowmobile preorders, mix and PA&A orders, but also $500 million-$550 million of incremental tariff impact, with about $200 million expected to be offset by mitigation actions. At the midpoint, management said gross margin should be slightly north of 19% and Q2 earnings are expected to decline about $1.60-$1.65 year over year.

Denis Le Vot struck an upbeat but cautious tone, saying the company delivered a solid quarter with sustained retail momentum across key segments. He emphasized BRP’s agility in responding to tariffs through cost actions, selective pricing, and supply-chain review, while stressing the company is protecting long-term growth and not making abrupt pricing moves. His comments repeatedly pointed to innovation, dealer strength, and ORV leadership as the main sources of confidence.

Sebastien Martel focused on the numbers and the tariff bridge. He said revenues grew 30% to $2.4 billion, gross profit was $562 million at 23.5%, normalized EBITDA was $334 million, normalized EPS was $1.83, and free cash flow was $367 million with close to $700 million of cash and 1.4x net leverage. On guidance, he quantified $500 million-$550 million of incremental tariffs, roughly $200 million of mitigation, and noted a full-year gross margin midpoint slightly north of 19%; he also highlighted about $150 million of working-capital tailwind from a Scandinavian floor-plan factoring facility and lower cash taxes.

Analysts pressed management on how BRP can offset tariffs without damaging demand or competitiveness. Management said mitigation will come from overhead discipline, accelerated lean initiatives, selective pricing tied partly to currency moves, and value-chain efficiency, but they do not want to commit major capital until the rules are clearer. Questions also focused on whether the tariff structure could persist, and management said it believes the current setup is temporary, while acknowledging it can shift production or manufacturing footprint if needed once the regulatory picture is stable. Analysts also asked about retail trends, and management said North American demand remains solid, with May positive overall and ORV and PWC improving.