BRP stock plunges as tariff changes pose half-billion-dollar cost

Revised U.S. tariff rules will take a half-billion-dollar bite out of BRP Inc., the Ski-Doo maker said, sending its share price into a tailspin after the company suspended its financial forecast.

The tougher tariffs mark a drastic change in fortune for the powersports outfit and its new chief executive, who a few weeks ago expressed confidence amid swelling profits and a projected net income of up to $480 million for the fiscal year.

The revision, which came into effect on April 6 after a presidential proclamation, imposes a 25 per cent levy on the full value of products made “substantially” of steel, aluminum or copper. Those products include BRP snowmobiles and most of its off-road vehicles, which are largely made in Canada and Mexico but find their biggest market in the United States.

Previously, BRP paid a 50 per cent tariff on only the metal content within those vehicles, a much cheaper toll.

The change will cost the Valcourt, Que.-based company more than $500 million this year, “before any mitigation measures that could partially offset these impacts,” it said in a statement.

The announcement also triggered a stock sell-off Wednesday that saw BRP’s share price plunge 35 per cent or $38.21 to close at $69.83.

“Like many manufacturers, we are operating in a highly volatile and unpredictable tariff environment that continues to create uncertainty across the market,” said Denis Le Vot, who came on board as CEO on Feb. 1, in a statement.

“Despite the material burden of these tariff changes, we expect that, with our solid balance sheet, the agility of our teams and the strong start of the year, we will be able to manage our business through this challenge and continue to push BRP forward.”

BRP’s financial guidance from late March, a week before U.S. President Donald Trump tweaked the tariff regime to address “national security threats” posed by metal imports, pegged the cost of U.S. levies at about $90 million.

Some 60 per cent of BRP’s revenue stems from the U.S. Most of the inventory sold there is made in Mexico — 70 per cent of total production happens south of the Rio Grande — or Canada, where Ski-Doos and some of its Can-Am three-wheelers roll off the line.

“The size of the cost impact fundamentally changes the profitability profile for BRP and injects a high degree of uncertainty into the outlook,” said National Bank analyst Cameron Doerksen in a note to investors.

While archrival Polaris, which has a large factory in Mexico, will take a hit too, “BRP is especially impacted,” he said.

The difference will be felt most keenly with snowmobiles, which Polaris manufactures on home turf in the U.S. but BRP makes in Quebec.

For now, the company response appears limited.

“Our follow-up with management indicated that while they are considering mitigation options, they are not looking to take any meaningful steps that could impact the longer-term outlook for the business,” said RBC Dominion Securities analyst Sabahat Khan in a note to investors.

“Our read is that the company is likely not looking to implement significant price increases in the immediate term.”

Potential moves to offset the new cost include drawing down current inventory in the U.S. to avoid tariffs at the border and shipping to regions outside America, Khan said.

The tariffs on steel, aluminum and copper could be among the items under discussion when the United States-Mexico-Canada Agreement heads into a formal review in July.

“Future changes to the tariff rules are a distinct possibility given that multiple industries have likely been caught up in the rule changes that have resulted in what we view as an unintended consequence — the rule changes were meant to simplify tariff collections, not impose large new tariffs,” wrote Doerksen.

“However, there is no visibility on whether the U.S. administration will make changes.”

For now, BRP’s balance sheet remains solid with about $430 million of cash on hand as of the end of January, on top of a healthy debt ratio, analysts said.

This report by The Canadian Press was first published April 15, 2026.

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