Profits plummet for Ski-Doo maker

BRP blames ‘bad winter’ for slump in sales

North America’s warmest winter on record put a chill on snowmobile sales at BRP Inc., which saw profits plummet last quarter as a result.

“I have been in the business for a long time and saw several challenging seasons. But it’s the first time that I’ve seen such difficult conditions,” CEO José Boisjoli said. “For us, it’s a bad winter.”

The Ski-Doo maker plans to cut snowmobile production by 30 per cent this year due to the buildup of inventory languishing in retailers’ stockrooms across Canada and the United States.

Profits fell 48.5 per cent yearover-year in the three months ended Jan. 31, the Valcourt, Que.-based company reported.

BRP posted net income of $188.2 million for the quarter, down from $365.1 million a year earlier. Revenue fell to $2.69 billion from $3.08 billion the year before.

On an normalized basis, the company said it earned $2.46 per diluted share in its latest quarter compared with a normalized profit of $3.85 per diluted share a year earlier.

Seasonal product sales dropped by more than a quarter, “mainly on snowmobile due to unfavourable winter conditions,” the company said in its earnings release Thursday, dragging down total revenue 12.5 per cent.

Overstocked inventories also resulted from late shipments of seasonal products the previous year, — caused by supply chain kinks — meaning dealers had less need to buy new ones from BRP last year, it said.

Nonetheless, Boisjoli remained upbeat about the treaded, two-ski machines — the original product of Bombardier Inc., from which BRP was spun off in 2003.

“We’ll bounce back after,” the chief executive said.

“The industry is quite stable. But it remains that we’re happy to be more diversified than 20 years ago,” he added, pointing to other product lines such as side-by-sides, an offroad vehicle that enjoyed high sales in the company’s fourth quarter.