Positive market climate and a favorable product mix bolstered BRP Inc. (DOOO) quarterly results

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For the three-month period ending October 31, 2020, BRP Inc. (NASDAQ: DOOO) posted its business results. Except as otherwise noted, all financial data is in Canadian dollars.

As our solid line-up continues to build market share internationally, we are very satisfied with our performance. The growth in demand for our goods has provided us with a substantial chance to sustain this pace and we are working hard to retain it. We expect this optimistic pattern to continue over the next year and on this basis, we are increasing our outlook at the end of the year with Normalized EPS now forecast to increase by 31% to 37% relative to last year, said José Boisjoli, President and CEO of the Company.

For the quarter ended October 31, 2020, sales rose by $31.1 million, or 1.9 percent, to $1,674.7 million, contrasted with $1,643.6 million for the same quarter ended October 31, 2019. Owing to a favorable market climate and a favorable product mix, the revenue growth was largely driven by reduced sales programs, partly compensated by a lower number of goods sold due to inventory replenishment at International.

For the quarter ended October 31, 2020, the Company’s North American retail revenues for power sports vehicles rose by 16 percent relative to the three-month quarter ended October 31, 2019. The rise was powered by Year-Round and Snowmobile goods, partly offset by PWC. Compared with the three-month cycle ending October 31, 2019, North American boat retail revenues rose by 4 percent.

For the quarter ending October 31, 2020, gross profit rose by $45.0 million, or 10.2 percent, to $486.9 million, compared with $441.9 million for the same quarter ended October 31, 2019. The growth in gross profit involves an unfavorable $15 million variation in the foreign exchange rate. The rise of 220 basis points was largely due to the positive variation in prices and distribution programs due to the better retail climate, partly offset by the under-absorption of fixed costs due to a lower level of production of seasonal goods and an adverse variance in the foreign exchange rate.

For the quarter ended October 31, 2020, operating expenditures declined by $ 31.3 million, or 13.4 percent, to $ 202.6 million, compared with $ 233.9 million for the three-month period ended October 31, 2019. This decline was primarily attributed to efforts to lower prices to offset the effects of COVID-19.

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