José Boisjoli, the long-standing CEO of BRP Inc., has steered the Canadian powersports manufacturer through significant transformations, most notably overseeing a remarkable tripling of revenue and market share since the company’s establishment as a separate entity. Today, one in three powersports products sold globally carries the BRP logo, a testament to Boisjoli’s leadership and vision.
Boisjoli, an engineer by training, began his career with Bombardier Inc. in 1989. Growing up just half an hour from BRP’s headquarters in Valcourt, Quebec, his passion for powersports began at a young age, receiving his first snowmobile at the age of ten. Under his stewardship, BRP underwent a successful initial public offering in 2013, and has since more than doubled its workforce, expanding to approximately 16,500 employees over the past decade.
Despite these achievements, BRP is currently facing an array of challenges stemming from both economic conditions and international trade policies. Following a surge in consumer demand for outdoor recreational products during the COVID-19 pandemic, rising inflation and escalating interest rates have prompted buyers to reconsider expensive purchases. Boisjoli emphasized the potential risk posed by consumer uncertainty in the industry, stating, “The biggest risk for all of us in the industry is the uncertainty that it creates in customer confidence. Many are on the fence and they’re waiting to have better visibility before they will buy our products,” during a recent conference call with analysts.
The context for this hesitation is compounded by ongoing tariffs affecting the U.S. market. BRP’s vehicles produced in Canada and Mexico comply with the North American trade agreement, allowing American customers to avoid a 25% tariff on imported goods. While a U.S. court ruling recently deemed these tariffs illegal, the situation remains fluid as a federal appeals court has issued a freeze on that decision. Significantly, around 60% of BRP’s revenue is derived from the U.S. market, where the majority of vehicles are produced either in Mexico or Canada. Notably, 70% of total production comes from south of the Rio Grande, with key products like Ski-Doos and Can-Am three-wheelers manufactured in these locations.
However, U.S. tariffs placed on imports from other countries, particularly China—which faces duties of approximately 30%—are expected to decrease BRP’s revenue by $60 million to $70 million this year, as indicated by Chief Financial Officer Sébastien Martel. He pointed out that these losses stem primarily from the company’s parts, accessories, and apparel segments, impacting supplier relations within the U.S.
Despite these headwinds, BRP recently reported impressive first-quarter profits amounting to $161 million, marking an astounding 279% increase compared to the same period last year. This performance is noteworthy as it reflects the first quarterly net earnings exceeding triple digits since 2023. Key factors contributing to this leap include reduced operating costs and favorable exchange rates for U.S.-denominated long-term debt. BRP’s stock responded positively, seeing a nearly 13% jump on the Toronto Stock Exchange to close at $56, although it remains 37% down compared to a year prior.
In a broader context, BRP’s record retail sales in Canada during the first quarter were bolstered largely by end-of-season snowmobile purchases. Yet, a decline in sales across various product lines has resulted in a 7% drop in total revenue year-over-year, as cautious consumers tighten their spending and dealerships refrain from inventory expansion.
The unpredictable economic landscape has raised concerns among analysts. National Bank analyst Cameron Doerksen remarked that BRP is “likely at the earnings trough,” citing the significant uncertainty surrounding the recovery of consumer demand and the implications of tariff regulations. Given this complexity, the company has opted to refrain from providing a financial outlook for the rest of the year. Boisjoli acknowledged the challenges of forecasting, particularly concerning the evolving tariff environment.
In the latest quarterly report, BRP’s revenue reached $1.85 billion, compared to just under $2 billion during the prior year. The company’s earnings, normalized for reporting purposes, came in at $0.47 per diluted share, down from $1.58 in the same period one year ago, yet surpassing market expectations of $0.40 per diluted share.
Reflecting on his tenure at BRP, Boisjoli expressed pride in the company’s growth, noting a substantial expansion in the number of profitable product lines. He stated, “We had two product lines profitable, two were not profitable, in 2003. Today we have seven profitable product lines.” Despite the tumultuous market conditions, Boisjoli’s leadership and strategic decision-making have positioned BRP to navigate through challenging waters.
These developments underscore the broader implications for the powersports industry, as shifts in consumer behavior and trade policies continue to shape the financial landscape. As BRP adapts to these changes, the evolution of consumer confidence and purchasing patterns will remain a focal point for the company and its stakeholders in the coming months.
In this dynamic environment, the conversations surrounding consumer behavior, economic forecasts, and industry trends are as crucial as ever. Your opinion is valuable; let us know what you think in the comments and join the discussion on the future of BRP and the broader powersports market.