BRP reports Q1 FY23 results
BRP Inc. reported its financial results for the three-month period ended April 30, 2022. All financial information is in Canadian dollars unless otherwise noted. The complete financial results are available on SEDAR and EDGAR as well as in the section Quarterly Reports of BRP’s website.
“Our first-quarter results once again demonstrate BRP’s ability to operate efficiently in a challenging
environment. Demand for our products remains robust and our focus on operational execution has allowed us to extend our market leadership further,” said José Boisjoli, President and CEO.
BRP said it experienced a continuing level of supply chain related disruptions and inefficiencies in an
increasingly inflationary environment when compared to the first quarter of Fiscal 2022 and the fourth
quarter of Fiscal 2022. As a result, this limited the Company’s ability to satisfy consumer demand and
replenish dealer inventories and in turn further limited product availability in the network compared to
optimal seasonal levels. Such supply chain related disruptions, which are expected to last throughout Fiscal 2023, also resulted in an increased level of substantially completed units awaiting missing components.
Despite these challenges, BRP said it optimized the shipment of missing components to its dealer
network which resulted in a high conversion rate of substantially completed units available for retail and
revised its production schedule based on seasonality and availability of components. The Company
implemented strategic pricing initiatives aimed at reducing inflationary pressures, which mitigated the
impact on the Company’s profitability. The slightly higher revenues achieved for the first quarter of Fiscal
2023 compared to the first quarter of Fiscal 2022 were further supported by strong SSV retail,
demonstrating sustained consumer interest.
Revenues remained flat at $1,809.3 million for the three-month period ended April 30, 2022, compared to
the $1,808.6 million for the corresponding period ended April 30, 2021. These results were primarily due to favorable pricing across all product lines, mostly offset by unfavorable mix in Year-Round Products and
lower volume in Seasonal Products due to supply chain disruptions. The increase was partially offset by an
unfavorable foreign exchange rate variation of $27 million.
Revenues from the Marine segment increased by $4.8 million, or 3.8%, to $132.2 million for the three-month period ended April 30, 2022, compared to $127.4 million for the corresponding period ended April 30, 2021. The increase was mainly due to a favorable product mix of units sold, as well as favorable pricing. The increase was partially offset by a lower volume of units and PA&A sold caused by supply chain disruptions.
Gross profit decreased by $87.6 million, or 16.2%, to $454.4 million for the three-month period ended April 30, 2022, compared to $542.0 million for the corresponding period ended April 30, 2021. Gross profit margin percentage decreased by 490 basis points to 25.1% from 30.0% for the three-month period ended April 30, 2021. The decreases were the result of higher logistics, commodities and labor costs due to inefficiencies relating to supply chain disruptions, as well as an increase in warranty costs. The decreases were partially offset by favorable pricing combined with lower sales programs driven by the strong retail environment and limited product availability, and a favorable outcome on an inventory related insurance claim. The decreases include an unfavorable foreign exchange rate variation of $9 million.
“Given our team’s capacity to progress on our strategic priorities and our agility in managing through a tighter supply chain environment, we remain confident in delivering another strong year in FY23 with expected revenue growth of 24% to 29% and Normalized EPS growth of 11% to 14%,” Boisjoli concluded.
BRP’s full Q1 FY23 results can be found here.
