Shares of BRP, the Canadian leisure craft manufacturer, surged in early trading on Thursday following the company’s strong second-quarter results. The company reported a rise in net income to C$338.7 million ($237.7 million) compared to C$237.7 million ($2.94 a share) in the same period last year. Adjusted earnings reached C$3.21 a share, surpassing analysts’ expectations of C$2.97 a share. Additionally, revenue increased by 14% to C$2.78 billion, beating predictions of C$2.67 billion.
The increase in profit and revenue can be attributed to strong demand for powersports vehicles in North America. BRP saw a higher volume of sales and an improved pricing environment for its side-by-side vehicles, all-terrain vehicles, Snowmobiles, and Sea-Doo pontoons.
Despite the positive results, BRP warned that revenue for its fiscal 2024 year may not meet previous expectations due to a softening boat market. Sales in the company’s marine segment, which includes Manitou and Quintrex boats, declined by 9% during the second quarter. As a result, BRP projects a growth of 5% to 10% for this segment, down from the previous forecast of 35% to 40%.
Due to lingering supply-chain issues, BRP is experiencing delays in rolling out new boats. As a result, the company adjusted its full-year sales growth forecast to a rise of 7% to 10%, compared to the previous estimate of 9% to 12%.
Overall, BRP’s strong performance in the second quarter reflects the growing demand for powersports vehicles in North America. However, challenges in the boat market and supply-chain issues may impact future revenue growth for the company.