BRP profits sag as tariffs take their toll, but sales jump with demand undeterred

Executives at BRP Inc. on Thursday projected revved-up sales for the year, despite U.S. tariff revisions that are expected to dent its profit margins.

The Ski-Doo maker saw earnings fall by a fifth last quarter as the latest U.S. levies took a toll, prompting it to cut its earnings outlook.

On the other hand, a 29 per cent revenue jump prompted it to forecast full-year sales that top earlier estimates, as higher off-road vehicle and Sea-Doo shipments buoyed hopes at the Quebec manufacturer.

“Our outlook for volume growth is largely unaffected by the incremental tariffs and actually continues to improve,” chief financial officer Sébastien Martel told analysts on a conference call.

The tougher tariffs, which took effect on April 6, marked a drastic change in fortune for the powersports outfit and its new chief executive, Denis Le Vot, who a few weeks earlier had expressed confidence amid rising profits and projected net income of nearly half a billion dollars for its full year.

Ushered in via presidential proclamation, the revised tariffs imposed a 25 per cent duty 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.

BRP now expects the tariff will cost it between $500 million and $550 million this financial year.

As a result, full-year net income will settle somewhere between $215 million and $250 million, the company predicts. That amounts to about half of the $480 million projected earlier this year, and a decrease from the $340 million netted in the previous year.

In response to the tariffs, BRP has implemented a mitigation plan that looks to cut costs through measures that range from scaling back corporate travel to delaying “exploratory projects” and investing less in the business.

“Don’t expect any brutal move on the pricing on the market,” Le Vot said, stressing that sticker prices would not be hiked under the plan. “We’ll preserve the good momentum we’re having on retail.”

That tailwind has pushed the company to forecast full-year revenues of up to $9.38 billion, higher than the up to $9.15 billion it predicted in March.

Side-by-side vehicles drove the sales surge in the latest quarter, with utility vehicles — typically featuring cargo beds and big towing capacity for use in everything from landscaping to hunting and farm work — leading the charge.

However, retail sales of snowmobiles dipped in North America, partly due to strong numbers last year, Le Vot said.

So far, neither tariffs nor the Iran war and its resulting fuel price spike have hurt overall demand, the CEO said.

“Most of our clients are wealthy households,” he said, “which means that we don’t really see that.”

As for where tariff levels wind up following free trade negotiations with the White House, executives said they would cross that bridge when they come to it.

“We’re looking at various scenarios and once we know what these rules are, then we’ll put them into play,” Martel said.

“We’ve opened plants in the past and that’s certainly something we can do. We’ve shifted production from different plants to other plants, and that’s also something we can do,” he continued.

“I don’t want to commit hundreds of millions in capital until we know what these rules are.”

On Thursday, BRP reported that first-quarter net income fell to $127.3 million from $161 million a year ago.

On a normalized basis, the Sea-Doo maker earned $1.83 per share in the quarter ended April 30 compared with a normalized profit of 47 cents per share the year before, far exceeding analysts’ expectations of $1.18 per share.

Revenue for the quarter rose to $2.39 billion from $1.85 billion in the same period last year.

In its updated guidance, BRP said it now expects normalized earnings of $3.00 to $3.50 per diluted share for the year. The outlook compared with expectations in March of normalized earnings per diluted share between $5.50 and $6.50.

This report by The Canadian Press was first published May 28, 2026.

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