Weak demand from motorsports industry puts pressure on BRP sales and profits, but innovation remains at peak level

Dealer demand remained subdued in fiscal 2025 due to macro headwinds, a pattern we expect to continue for several more quarters. However, we argue that this is a function of higher borrowing costs and expect BRP’s continued focus on long-term product and operational priorities to maintain a strong competitive position over the long term. Strategic priorities focused on market share growth, lean operations and building an engaged workforce, while also focusing on evolving customer requirements, should ensure that BRP is on track. With manufacturing facilities located near demand (such as jet skis in Mexico) and tactical capacity spending, BRP should be able to extract efficiencies from its facilities. Centers of expertise and excellence across the company allow BRP to optimize production, improve utilization and accelerate time to market, ensuring a consistently relevant product offering. Because BRP is exposed to multiple customer segments, we do not believe acquisitions will be required for expansion. However, we believe that entry into market categories not covered by competition policy (most recently motorcycles) and small acquisitions, particularly in the parts and accessories or marine sectors, are possible and could support growth.