The financial drop marked a sharp U-turn from the previous quarter, when earnings jumped 42 per cent year-over-year and optimism rode high atop near-record sales for the period.
“Consumer confidence declined since July," CEO
"In October, the decline happened in almost all markets, but especially international. And the trend is continuing in November."
Sea-Doos, three-wheeled motorcycles and pontoon boats all saw lower sales in the quarter ended
The consumer slowdown pushed BRP to lower its financial forecast. The company is now projecting normalized earnings per share this fiscal year will drop six to eight per cent, instead of rising by up to seven per cent as previously predicted.
The
"Generally, we are expecting a softer industry," Boisjoli said. But he qualified that demand for premium products remains strong, including for its pricier models of three-wheeled and side-by-side vehicles.
The boost in expensive purchases last quarter helped offset the sales drop-off for cheaper items, with three-wheelers serving as a prime example. Sales for the
Across the industry, sales for "value products" declined by roughly half, he said — "and this is definitely helping us."
"We want to win in each category, but we more skew to premium products."
The average household income of the company's customer base in
Buyers with less disposable income are more sensitive to inflation and rising interest rates, which could deter them from taking on further debt to buy a turbo-charged toy. Meanwhile, those with more money to spare often skew older — the vast majority of BRP's three-wheeled vehicle buyers are over the age of 50 — and can put more cash down on a purchase.
"There is more traction on the premium. Consumers that have lower household incomes are more hesitant to finance the product," Boisjoli said.
The decline in spending on powersports, especially lower-priced items, partly reflects
The Canadian economy shrank in the third quarter, as the gross domestic product contracted 1.1 per cent on an annualized basis,
BRP reported a profit of
Revenue for the quarter fell 10 per cent to 2.47 billion from
Normalized earnings per share for BRP's most recent quarter amounted to
In its outlook, the company now says revenue for its 2024 financial year is expected to grow four to five per cent, compared with earlier expectations for growth of seven to 10 per cent.
This report by The Canadian Press was first published
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