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," said CEO José Boisjoli. "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 build-up of inventory languishing in retailers' stockrooms across Canada and the United States.
Profits fell 48.5 per cent year over 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 versus $365.1 million a year earlier.
Seasonal product sales shrank by more than a quarter, "mainly on snowmobile due to unfavorable winter conditions," the company said in its earnings release Thursday. The decrease helped drag down total revenue 12.5 per cent to $2.69 billion from $3.08 billion the year before.
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 off-road vehicle that enjoyed high sales in the company's fourth quarter.
The warmer weather may even be prompting earlier-than-usual purchases of those powersport products.
"Anecdotally, we've had some dealers say, 'You know what, my snowmobile business has slowed down significantly in February, March, but consumers are walking in and buying (off-road vehicle) products instead.'"
"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," said CEO José Boisjoli. "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 build-up of inventory languishing in retailers' stockrooms across Canada and the United States.
Profits fell 48.5 per cent year over 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 versus $365.1 million a year earlier.
Seasonal product sales shrank by more than a quarter, "mainly on snowmobile due to unfavorable winter conditions," the company said in its earnings release Thursday. The decrease helped drag down total revenue 12.5 per cent to $2.69 billion from $3.08 billion the year before.
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 off-road vehicle that enjoyed high sales in the company's fourth quarter.
The warmer weather may even be prompting earlier-than-usual purchases of those powersport products.
"Anecdotally, we've had some dealers say, 'You know what, my snowmobile business has slowed down significantly in February, March, but consumers are walking in and buying (off-road vehicle) products instead.'"
Yahoo Finance
. I just don't need an 850 and really don't want one. I ride with my wife and 90% in Vilas. We normally cruise 40 to 50 mph so that is the sweet spot for a 600. Plus 600 has more then enough power to make me smile. The 850are within a few hundred dollars of a 600 rite now. Also shoot 2 kill can you give the name of the Polaris dealer with all the left overs? A friend of mine is looking for a left over Polaris.
