BRP Inc. (NASDAQ:DOOO) Q2 2025 Earnings Conference Call September 6, 2024 9:00 AM ET

Company Participants

Philippe Deschenes - Investor Relations
Jose Boisjoli - President and Chief Executive Officer
Sebastien Martel - Chief Financial Officer

Conference Call Participants

Craig Kennison - Baird
Martin Landry - Stifel
Robin Farley - UBS
Benoit Poirier - Desjardins Capital Markets
Xian Siew - BNP Paribas
Mark Petrie - CIBC
James Hardiman - Citi
Cameron Doerksen - National Bank Financial
Jonathan Goldman - Scotiabank
Jaime Katz - Morningstar
Luke Hannan - Canaccord
Brian Morrison - Cowen
Fred Wightman - Wolfe Research
Tristan Thomas-Martin - BMO Capital Markets

Operator

Good morning, ladies and gentlemen, and welcome to BRP Inc’s FY ‘25 Second Quarter Results Conference Call. For participants who use the telephone line, it is recommended to turn off the sound on your device.

And I would like to turn the meeting over to Mr. Philippe Deschenes. Please go ahead, sir.

Philippe Deschenes

Thank you, Sylvie. Good morning and welcome to BRP's conference call for the second quarter of fiscal year ‘25. Joining me this morning are Jose Boisjoli, President and Chief Executive Officer; and Sebastien Martel, Chief Financial Officer.

Before we move to the prepared remarks, I would like to remind everyone that certain forward-looking statements will be made during the call and that the actual result could differ from those implied in these statements. The forward-looking information is based on certain assumption and is subject to risk and uncertainties and I invite you to consult BRP's MD&A for a complete list of these.

Also during the call, reference will be made to supporting slides and you can find the presentation on our website at brp.com under the investor relations section.

So with that, I'll turn the call over to Jose.

Jose Boisjoli

Thank you, Philippe. Good morning, everyone, and thank you for joining us. Our financial results for second quarter were essentially as expected and reflect our focus on reducing network inventory to support our dealers. However, the macroeconomic environment and high interest rates continue to put pressure on consumer demand. As a result, the demand has declined more than anticipated, while promotional activity has intensified.

In this context, and given our commitment of safeguarding our dealer value proposition, we have decided to further adjust our production schedule for the year, which is reflected in our updated guidance.

Let's turn to slide four for key financial highlight. Revenue reached $1.8 billion, normalized EBITDA was $199 million, and normalized EPS was $0.61, generally in line with our expectation. We have made great strides to reduce network inventory, which is down 13% so far this year, progressing towards our objective of a 15% to 20% reduction by the end of fiscal 2025. As for retail, our North American Powersports sales were down 18% from a strong second quarter last year as the industry experienced weaker consumer demand, as you can see on slide five.