BRP reports Q1 FY 2020 results
BRP Inc. reported its financial results for the three-month period ended April 30, 2019. All financial information is in Canadian dollars unless otherwise noted.
“We have experienced strong retail momentum in North America and Europe with all our sectors trending positively, and we are very satisfied with our year-over-year revenue growth of 17%, even while operating in a dynamic environment. We have continued to outpace the competition, and are positive about the outlook for the rest of this year,” declared José Boisjoli, BRP’s President and CEO. “Our quarter after quarter strong performance is testament to our ability to execute on our strategic priorities : growth, agility and Lean enterprise. With our industry leadership position and our quality of our execution, we are confident to deliver the guidance for the year.”
Highlights for the Three-Month Period Ended April 30, 2019 include revenues increased by $197.0 million, or 17.3%, to $1,333.7 million for the three-month period, compared with $1,136.7 million for the corresponding period ended April 30, 2018.
The revenue increase was primarily attributable to higher wholesale of year-round products. The increase includes a favorable foreign exchange rate variation of $13 million.
Revenues from marine segment increased by $37.9 million, or 33.4%, to $151.3 million for the three-month period, compared with $113.4 million for the corresponding period ended April 30, 2018. The increase was mainly due to the acquisition of Alumacraft Boat Co. (Alumacraft) and Triton Industries, Inc. (Manitou), partially offset by a lower volume of outboard engines sold. North American outboard engine retail sales decreased on a percentage basis in the high-teens range compared with the three-month period ended April 30, 2018.
Revenues from seasonal products increased by $25.0 million, or 7.1%, to $375.4 million for the three-month period, compared with $350.4 million for the corresponding period ended April 30, 2018. The increase resulted primarily from a favorable product mix and price increases in PWC and from a favorable foreign exchange rate variation of $3 million. North American seasonal products retail sales increased on a percentage basis by high-single digits compared with the three-month period ended April 30, 2018.
The Company’s North American retail sales for the three-month period increased by 10% compared with the three-month period ended April 30, 2018, mainly due to an increase in 3WV following the introduction of the Can-Am Ryker. Gross profit increased by $19.0 million, or 6.7%, to $300.6 million for the three-month period, compared with $281.6 million for the corresponding period ended April 30, 2018. Gross profit margin percentage decreased by 230 basis points to 22.5% from 24.8% for the three-month period. The decrease was primarily due to higher commodity, production and distribution costs and an unfavorable product mix of 3WV sold, partially offset by higher volume of 3WV and PAC sold.
Operating expenses increased by $16.2 million, or 8.3%, to $211.6 million for the three-month period ended April 30, 2019, compared with $195.4 million for the three-month period ended April 30, 2018. The increase was mainly attributable to support for the launch of various products such as the Can-Am Ryker, continued product investments and costs related to the modernization of information systems, partially offset by lower variable employee compensation expenses.
