Ski-Doo and Sea-Doo maker BRP Inc. DOO-T has raised its guidance after reporting a second-quarter profit of $237.7-million and a 28 per cent increase in sales compared with a year ago, news that sent the company’s shares up more than 10 per cent in late-morning trading.
“We delivered record second quarter results while continuing to advance on our strategic initiatives,” said BRP CEO Jose Boisjoli in a statement attached to the company’s earnings release.
“As we are entering the second half of the year, demand for our products continues to be strong across our portfolio of products and markets. With current improvements in supply chain and our additional production capacity, we are in a favourable position to deliver an expected record second half of the year.”
BRP said its profit amounted to $2.94 per diluted share for the quarter ended July 31 compared with a profit of $212.9-million or $2.46 per diluted share a year earlier.
Revenue totalled $2.44-billion, up from $1.90-billion in the same quarter last year.
The company said its normalized profit for the quarter amounted to $2.94 per diluted share, up from a normalized profit of $2.89 per diluted share a year ago.
In its outlook, BRP said it now expects revenue for its full 2023 financial year to grow between 26 and 31 per cent compared with its 2022 financial year, up from earlier guidance for growth between 24 and 29 per cent.
BRP raised its guidance for normalized earnings per diluted share for its 2023 financial year to between $11.30 and $11.65, up from earlier guidance for between $11.00 and $11.35.
The company said it experienced a high level of demand for its products in the second quarter as it continued to navigate supply chain related disruptions and an increasingly inflationary environment.
It said the supply chain related disruptions led to an increased level of nearly-finished products awaiting missing components, but explained that it was able to optimize the shipment of missing components to its dealer network, which resulted in a high conversion rate of these products available for retail.
Additionally, supply chain challenges impacted North American retail sales for powersports products, which decreased by 14 per cent for the three-month period ended July 31 compared to the three-month period last year.
On its earnings call with analysts, the company said it is “quite optimistic” about the supply chain picture going into the remainder of the year, noting that it has seen less cases of disruptions.
On the call, the company also addressed the cyberattack it experienced last month that brought its operations to a halt.
Following the attack, the company said while its clients’ personal information was not affected, employee information was compromised, including credentials of workers who used BRP computers for personal reasons.
During the call, Boisjoli said the company was able to “contain the situation and limit its impact,” but added that it has caused delays in delivering product to customers.
“We expect to make up for the loss of sales throughout the second half of the year,” he said.
The company said the investigation into the cyberattack is ongoing.