BRP Q4 Earnings Call Highlights

26 Mar 2026, 15:08 by Michael Walen · The Markets Daily

BRP (NASDAQ:DOOO) reported a strong finish to fiscal 2026, with management highlighting improving retail trends, significant inventory reductions in its dealer network, and results that came in above the company’s guidance. Executives also outlined a wider-than-usual outlook range for fiscal 2027, citing increased macro uncertainty despite continued momentum in dealer orders and retail demand.

Leadership transition and fiscal 2026 highlights

During the call, BRP introduced its new CEO, who said he has spent his first two months in the role meeting employees, visiting company sites, and engaging with dealers and partners. He emphasized that BRP has a “culture of innovation and excellence” and described the company as well positioned as a leading powersports OEM.

Management said BRP navigated fiscal 2026 amid a “volatile tariff environment” and a challenging competitive backdrop as other OEMs worked through excess inventory. Despite those headwinds, the company reported results above its initial expectations and said it made progress “right-sizing” network inventory. Leadership also pointed to actions taken to strengthen the business, including new model introductions, divestiture of two marine businesses, and the launch of its M28 strategic plan.

For the full fiscal year, BRP reported:

Revenue of CAD 8.4 billion
Normalized EBITDA of CAD 1.1 billion
Normalized EPS of CAD 5.21
Free cash flow of more than CAD 900 million from continuing operations

Inventory position improves as retail strengthens

Management said BRP ended fiscal 2026 with a healthier dealer inventory position, particularly in North America. Dealer inventory in North America was down 17% year over year and down 28% over two years. Executives said the company reached “optimal levels” for off-road vehicles (ORV) and snowmobiles after a strong quarter of retail activity, and said BRP is progressing toward optimal levels for other product lines.

On retail trends, management reported that North American powersports retail rose 12% in the quarter, supported by positive industry trends and market share gains in ORV and snowmobiles. The company noted a record fourth-quarter ORV performance in Canada.

Regionally, executives described EMEA markets as muted, with slight growth in ORV and personal watercraft (PWC) offset by weaker snowmobile trends in Scandinavia due to unfavorable snow conditions. Retail in Latin America and Asia Pacific increased 1% in the quarter, which management said was driven by a strong end-of-season for PWC, including the company’s “strongest retail quarter ever” in Brazil.

Product-line commentary: ORV gains and new model momentum

In North America, management said the side-by-side (SSV) industry grew low single digits in the quarter, led by the utility segment and increased adoption of cab units. BRP said Can-Am SSV retail grew high single digits, attributing performance to the launch of the new Defender HD11.

For ATVs, management said industry retail was down mid-single digits, though it was positive when excluding used models. BRP reported Can-Am ATV retail growth in the low teens percentage range, driven by market share gains in higher-displacement categories following recent product introductions.

In snowmobiles, management said the industry was up mid-teens year over year, rebounding from a weak prior-year quarter. BRP said it outpaced the industry again despite competition from discounted and older dealer inventory at other OEMs. The company also referenced the launch of new Ski-Doo and Lynx lineups for the upcoming season, highlighting performance and feature improvements.

Management also noted that the fourth quarter is typically off-season for three-wheel vehicles, PWC, and pontoons, and said retail trends in those categories were softer than last year, partly due to an extended winter season. Executives said the company expects a clearer view of demand once the core retail season begins in late April.

On the impact of new ORV models, management said SSV retail has been up about 10% since October as new models reached dealer showrooms. BRP said it achieved its “highest third and fourth quarter market share ever” in the utility segment and reported that repricing of certain model year 2026 SSVs contributed to an almost 4-point market share gain for that model in the fourth quarter. In ATVs, the company said the updated Outlander platform and new high-displacement models delivered a market share gain of almost 9 points.

Quarterly results, EV impairment, and capital returns

For the fourth quarter, the CFO said revenue increased 16% to CAD 2.5 billion, with double-digit growth across product categories, driven by PWC, snowmobile, and ORV shipments, favorable product mix, and positive pricing net of sales programs.

BRP also recorded an impairment charge related to EV and light mobility assets. Management said it entered those markets during rapid expansion and invested with a long-term mindset, but adoption has since slowed and market dynamics have become more challenging. The CFO said the company recorded the impairment due to a reduced outlook for returns, while maintaining its plan to continue selling EV products already developed and to limit annual financial impact to CAD 25 million.

Excluding the impact of some EV write-down classified as cost of sales, BRP reported gross profit of CAD 582 million and a gross margin of 23.7%, up 380 basis points year over year. Management attributed the improvement to better capacity utilization, lower sales programs, and favorable pricing, partially offset by tariffs, higher warranty expense, and the return of variable compensation. Normalized EBITDA rose 47% to CAD 364 million and normalized EPS more than doubled to CAD 2.21.

BRP ended the year with over CAD 400 million in cash and a net leverage ratio of 1.8 times. The company announced a 16% dividend increase and said it plans to be active with share buybacks, noting more than 2.6 million shares remain authorized under its normal course issuer bid.

Fiscal 2027 outlook: wider guidance range amid uncertainty

BRP guided fiscal 2027 revenue growth of 5% to 8%, normalized EBITDA growth of 6% to 16%, and normalized EPS of CAD 5.50 to CAD 6.50. Management said it entered the year with momentum from strong retail performance and demand for newly introduced models, alongside better wholesale-to-retail alignment as inventory rightsizing winds down.

Executives said recent events increased uncertainty in the broader environment, prompting the wider-than-usual guidance range. While BRP said it has not seen a material impact on demand so far, it described an alternative scenario in which demand softens later in the year to a mid-single digit industry decline, leading to adjustments primarily in the second half.

Key assumptions and factors discussed on the call included:

Industry expectations: flat overall powersports industry, with low single-digit ORV industry growth; BRP expects ORV market share gains
Destocking tailwind: management quantified a CAD 350 million to CAD 450 million positive tailwind in fiscal 2027, depending on where results fall within the guidance range
Tariffs: BRP assumed a flat year-over-year tariff impact of about CAD 90 million and did not include potential savings tied to a Supreme Court ruling
Oil and freight/commodity impact: management said moving oil assumptions from $60 to $100 per barrel represented about a 60-basis-point headwind baked into guidance
Sales programs: BRP built a 50-basis-point tailwind in fiscal 2027, with management noting that a more promotional environment could eliminate that benefit in a downside scenario
Lean initiatives: BRP delivered CAD 150 million last year and built 100 basis points of benefit from lean initiatives into the fiscal 2027 guidance
OpEx: management plans targeted investments to support M28 objectives, with OpEx expected to be stable year over year as a percentage of revenue

Management also provided an EBITDA margin framework, indicating that at the top end of guidance BRP expects an EBITDA margin just shy of 14%, and at the low end just north of 13%.

On dealer network expansion, management said BRP added 36 dealers in North America (mainly in the U.S.) during fiscal 2026 and described continued under-penetration in certain U.S. states. Executives said many new points of sale are “existing dealers” adding rooftops or acquiring dealerships and bringing in BRP’s brand, and that they are not seeing significant friction with the existing dealer base.

BRP also said it expects another strong free cash flow year in fiscal 2027, citing a range of roughly CAD 750 million to CAD 800 million, with CapEx expected around CAD 400 million.

About BRP (NASDAQ:DOOO)

BRP Inc, operating under the brand name Bombardier Recreational Products, is a leader in designing, manufacturing and distributing recreational vehicles and propulsion systems for winter, on-road, off-road and water lifestyles. The company’s diversified portfolio includes snowmobiles, personal watercraft, all-terrain vehicles and roadsters, all powered by in-house Rotax engines. With a focus on innovation and performance, BRP has positioned itself at the forefront of the powersports industry.

At the heart of BRP’s product lineup are its flagship Ski-Doo snowmobiles and Sea-Doo personal watercraft, which serve both recreational and professional segments.