Apr 3, 2016
BRP manufactures and markets power-sports vehicles and propulsion systems with products such as roadsters, all-terrain vehicles, snowmobiles and personal watercraft. The company has strong brand awareness with brands such as Ski-Doo, Sea-Doo, Can-Am and Lynx. In terms of geographical revenue breakdown, in fiscal 2016, ended Jan. 31, 51 per cent of its revenue was from the United States, 31 per cent was international and 18 per cent was from Canada. Last fiscal year, U.S. revenue grew by 18 per cent year-over-year, international revenue expanded 4 per cent, while Canadian revenue contracted 4 per cent from the year before, negatively affected by weak economic conditions in Western Canada as well as warm weather conditions and lack of snow this past winter.
Operationally, despite the competitive and challenging market conditions, the company managed to end fiscal 2016 on a positive note, and the outlook for fiscal 2017 looks promising.
Looking forward to fiscal 2017, management anticipates it will add between 45 and 55 new North American power-sports dealers – helping the company expand its sales. Growth is also being driven by product launches through the innovation of existing product lines as well as the introduction of new prod- ucts. Management is forecasting overall revenue to grow between 4 per cent and 8 per cent. The outlook is encouraging; however, given the seasonality of the business and timing of new launches, earnings will be significantly shifted to the second half of the year.
One concern to highlight is the power-sports industry. In January, BRP’s competitor, Polaris Industries Inc. (PII- NYSE), provided a cautious 2016 outlook, noting weak demand for powersports products and uncertain economic conditions. Management at Polaris anticipates sales will range from a decline of 2 per cent to a slight gain of 3 per cent. Competition could be aggressive given the challenging market conditions.
Original article JENNIFER DOWTY firstname.lastname@example.org. Click here for the full story: http://www.pressreader.com/canada/the-globe-and-mail-ottawaquebec-edition/20160331/282114930713090/textview