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The BRP research plant is shown in Valcourt, Que.

Graham Hughes/The Canadian Press

Nearly five years after it went public, Ski-Doo and Sea-Doo maker BRP Inc. remains a company that sells the superfluous.

But its latest financial results suggest the runway on non-essential spending is longer than you might think.

The company based in Valcourt, Que., on Wednesday reported record revenue for the fifth year in a row, buoyed by strong retail demand for its Can-Am side-by-side vehicles.

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It says that its retail momentum is outpacing rivals not only in North America, where it had an 11-per-cent sales increase for the year in a flat market, but everywhere.

The shares punched up 9.5 per cent in Toronto on Wednesday as BRP introduced stronger-than-expected earnings guidance for the next fiscal year.

The company also increased its dividend 12 per cent to 9 cents a share.

Chief executive José Boisjoli, a farm boy who grew up riding snowmobiles and dirt bikes, is trying to drive sales by introducing products such as the Maverick X3 "mud monster" off-road vehicle and a Spyder three-wheeler priced at US$10,000 while boosting lower-cost production in Mexico.

Investors have seen their shares double in price over the past three years.

Never mind that the U.S. retail environment is showing signs of cooling, even as the employment and housing pictures remain bright. Mr. Boisjoli is convinced customers will continue to buy the company's sleek machines in big numbers because they deliver technology and value at a time people feel financially secure.

"I don't want to have too-rosy glasses, but just reading the [trends over the] last six months, we believe nothing will change short-term," Mr. Boisjoli said, adding that international markets such as Mexico and Scandinavia are going strong while Brazil and Russia are recovering. "That's why we're quite happy with our position."

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A plan to introduce a side-by-side model every six months until 2020 has helped BRP appeal to a broader swath of buyers while the company has also carefully weaved a tighter dealer network, Mr. Boisjoli said. He added that BRP retailers typically enjoy higher profit margins than dealers for rival manufacturers and don't compete with each other.

BRP makes five separate models of side-by-sides. Prices for the off-road, four-wheel drive vehicles, which allow drivers to sit beside their passengers instead of in front of them, range from $11,999 to $21,499.

The company was spun out of Bombardier Inc. in 2003. After its revenue plunged during the 2008 financial crisis, BRP kept its research and development going with a $50-million emergency loan from the Quebec government. The decision allowed it to pursue work on new products, resulting in innovations such as the E-Tec SHOT system, which allows snowmobilers to start their sleds once with a quick pull, and then a push button for the rest of the day.

BRP tallied a profit of $115-million or $1.12 a share for the fourth quarter on revenue of $1.26-billion. Stripping out one-time items, the profit was 96 cents a share, beating analyst's estimates of 92 cents. For the full year, profit not counting special items rose 21 per cent to $257-million or $2.38 a share. Revenue rose 8 per cent to $4.5-billion.

The company plans to increase output of side-by-side vehicles at its Juarez 2 manufacturing plant in Mexico by 30 per cent this fiscal year over the previous year's levels. It also plans to hike production of engines for those vehicles at a separate Mexican plant in Queretaro.

The moves will underpin a projected growth in earnings per share of 20 to 25 per cent for fiscal 2019 versus 2018, the company said. Revenue should grow 5 to 8 per cent over the same period, it said.

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"Today's results and outlook should boost confidence in [BRP's] product positioning and operating strength," said Steve Arthur, analyst with RBC Capital Markets.

"We believe these strong results and guidance underline the quality of BRP's management and products portfolio, and we are confident that fiscal 2019 guidance is achievable," said Benoit Poirier of Desjardins Capital Markets.

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