BRP Inc.

BRP reported Q2 fiscal 2027 revenue of CAD 2.2 billion, up 18% year over year, normalized EBITDA of CAD 139 million, normalized EPS of a loss of CAD 0.18, and gross profit of CAD 263 million with gross margin of 11.7%. Management said results included an incremental net tariff impact of about CAD 145 million versus the prior year quarter, and free cash flow was CAD 193 million in the quarter and CAD 560 million year to date. Dealer inventory was up only 2% year over year, and BRP ended the quarter with more than CAD 600 million in cash and net leverage of 1.6x. For fiscal 2027, BRP raised guidance to revenue of CAD 9.225 billion-CAD 9.475 billion, normalized EBITDA of CAD 1.025 billion-CAD 1.075 billion, normalized EPS of CAD 4.00-CAD 4.50, and free cash flow of more than CAD 800 million. Management also said Q3 normalized EPS is expected to be down 50%-60% year over year, mainly due to incremental tariff impact.

Denis Le Vot framed the quarter as evidence that BRP is executing well in a volatile macro and trade backdrop, with ORV momentum, market-share gains, and product launches supporting the outlook. He emphasized Club BRP, new models such as the Defender HD10/XU and Sea-Doo launches, and the company’s commitment to become the number one ORV brand in North America. His tone was confident and strategic, with repeated emphasis on innovation, dealer engagement, and the ability to adapt quickly to tariffs and demand shifts.

Sébastien Martel focused on the numbers and the moving parts behind the guidance raise. He cited revenues up 18%, gross profit of CAD 263 million, gross margin of 11.7%, normalized EBITDA of CAD 139 million, normalized EPS of negative CAD 0.18, free cash flow of CAD 193 million in the quarter and CAD 560 million year to date, cash above CAD 600 million, and net leverage of 1.6x. He said the updated tariff assumption is CAD 200 million for the year, with an annualized run rate of about CAD 225 million, and that inflation now represents a 100-125 basis point headwind to profitability. He also said BRP expects to deploy up to an additional CAD 200 million toward buybacks under the new NCIB window.

Analysts pressed management on the guidance increase, tariff cadence, inflation, and whether BRP’s strong ORV performance is sustainable. Martel explained the full-year raise came mainly from better ORV deliveries and a better net tariff outlook, while also noting softer PWC shipments, about 50 basis points of inflation pressure, and a product mix that is less rich than last year. On tariffs, he said ATV Section 232 rates fell from 25% to 15%, a new Section 338 tariff now affects Spyder imports from Canada into the U.S., and some new utility products are not subject to Section 232. Management also addressed supplier restructuring, saying the bulk of the CAD 75 million hit was booked in the quarter and that the relationship with the supplier will continue.