About the Company
BRP Inc. (TSX: DOO) (NASDAQ: DOOO) is a global leader in powersports products and propulsion systems, known for its iconic brands such as Ski-Doo, Sea-Doo, Can-Am, and Lynx. Headquartered in Valcourt, Quebec, the company operates in over 120 countries, offering innovative recreational vehicles and marine products. With a strong dealer network and a diverse product lineup, BRP continues to be a key player in the outdoor and recreational vehicle industry, committed to long-term profitable growth.
Second Quarter Performance (Ended July 31, 2025)
BRP delivered a steady performance in the second quarter of FY2025, reporting revenues of $1,888.2 million, a 4.3% increase from the same period last year. The growth was driven by higher Off-Road Vehicle (ORV) deliveries, partially offset by lower shipments in Personal Watercraft (PWC). The company’s gross profit and margin remained comparable to last year, as favorable pricing and production efficiencies offset the negative impact of global tariffs, particularly on Parts, Accessories, and Apparel (PA&A).
Profitability and Earnings
Net income rose significantly to $57.1 million, up 36.0% from $42.0 million in the prior year. This increase was largely attributed to lower income tax expenses, including the recognition of tax incentives related to prior years. However, this gain was partially offset by higher operating expenses, which weighed on operating income. Normalized EBITDA came in at $213.2 million, reflecting a 9.2% decrease year-over-year due to slightly lower profitability.
Cash Flow and Liquidity
BRP generated strong cash flow in the first half of the year. Consolidated net cash flows from operating activities reached $373.1 million for the six-month period ended July 31, 2025, compared to $232.0 million in the same period last year. The improvement was primarily driven by favorable changes in working capital and lower income taxes paid, partly offset by lower profitability.
FY2026 Outlook and Guidance
For FY2026, BRP expects revenues between $8.1 billion and $8.3 billion and normalized diluted EPS between $4.25 and $4.75. Management anticipates a solid second half of the year, supported by a leaner inventory position, a robust product portfolio, and a resilient dealer network.
Stock View: Buy Rating
Considering the above facts, we give a “Buy” rating at the closing price of CAD 87.98 per share as on October 31, 2025. BRP’s focus on operational efficiency, product innovation, and inventory optimization positions it well for an industry rebound. With strong cash generation, expanding margins, and steady demand for recreational vehicles, BRP is for investors seeking exposure to cyclical growth and long-term value creation.
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