Q2 Fiscal 2027
Filed Sep 3, 2026BRP reported 18.5% revenue growth in Q2 Fiscal 2027, but tariffs and a supplier financial restructuring drove a net loss and a 940-basis-point gross-margin decline; the Company raised full-year normalized diluted EPS guidance to $4.00 to $4.50.
Revenue growth, ORV market-share gains, six-month free cash flow of $559.4 million and raised FY27 normalized diluted EPS guidance were offset by a Q2 net loss of $(136.8) million, normalized EBITDA decline of 34.9%, and gross profit margin decline to 11.7%.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Q2 revenuesother | $2,236.8 million | – | 18.5% |
| Q2 gross profitother | $262.5 million | – | (34.0%) |
| Q2 gross profit marginother | 11.7% | – | decreased by 940 basis points |
| Q2 operating income (loss)other | $(50.0) million | – | – |
| Q2 operating expensesother | $312.5 million | – | 1.7% |
| Q2 normalized EBITDAnon-GAAP | $138.8 million | – | (34.9%) |
| Q2 net lossother | $(136.8) million | – | (339.6%) |
| Q2 normalized net lossnon-GAAP | $(13.0) million | – | (119.4%) |
| Q2 diluted EPSother | $(1.88) | – | decrease of $2.67 per share |
| Q2 normalized diluted EPSnon-GAAP | $(0.18) | – | decrease of $1.10 per share |
| Q2 normalized EPS - basicnon-GAAP | $(0.18) | – | – |
| Q2 net income from discontinued operationsother | $2.7 million | – | 108.0% |
| Six-month revenuesother | $4,628.6 million | – | 23.9% |
| Six-month gross profitother | $824.1 million | – | – |
| Six-month gross profit marginother | 17.8% | – | – |
| Six-month operating incomeother | $175.5 million | – | – |
| Six-month normalized EBITDAnon-GAAP | $473.2 million | – | 14.3% |
| Six-month net lossother | $(9.5) million | – | (104.4%) |
| Six-month normalized net incomenon-GAAP | $121.5 million | – | 19.7% |
| Six-month diluted EPSother | $(0.12) | – | – |
| Six-month normalized diluted EPSnon-GAAP | $1.66 | – | – |
| Six-month normalized EPS - basicnon-GAAP | $1.68 | – | – |
| Six-month net income from discontinued operationsother | $4.3 million | – | 109.7% |
| Six-month net cash flows generated from operating activitiesother | $686.8 million | – | – |
| Six-month free cash flownon-GAAP | $559.4 million | – | – |
| Six-month free cash flow from continuing operationsnon-GAAP | $560.4 million | – | – |
| Six-month free cash flow from discontinued operationsnon-GAAP | $(1.0) million | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Year-Round ProductsHigher ORV unit sales to support retail demand, favourable SSV product mix from new models, and lower sales programs across all product lines; includes a favourable foreign exchange rate variation of $37 million. | $1,485.1 million | – | 33.3% |
| Seasonal ProductsLower PWC unit sales, mostly reflecting units shipped earlier in the first quarter, partly offset by lower sales programs in Snowmobile; includes a favourable foreign exchange rate variation of $5 million. | $427.7 million | – | (8.9%) |
| PA&A, OEM Engines and OthersHigher PA&A volume and favourable pricing, partly offset by unfavourable product mix in OEM Engines; includes a favourable foreign exchange rate variation of $4 million. | $324.0 million | – | 6.3% |
FY27 revised guidance outlook
- RevenueTotal Company Revenues: $9,225 to $9,475
- Tax rate~26.5%
- NoteRevenues Year-Round Products: $5,475 to $5,600
- NoteRevenues Seasonal Products: $2,375 to $2,450
- NoteRevenues PA&A, OEM Engines and Others: $1,375 to $1,425
- NoteNormalized EBITDA: $1,025 to $1,075
- NoteNormalized Earnings per Share - Diluted: $4.00 to $4.50
- NoteNet Income: $160 to $195
- NoteDepreciation Expenses Adjusted: ~$450M
- NoteNet Financing Costs Adjusted: ~$180M
- NoteWeighted average number of shares – diluted: ~73M shares
- NoteCapital Expenditures: ~$390M
- NoteQ3 Fiscal 2027 Normalized diluted earnings per share: down approximately 50% to 60% versus the same three-month period in Fiscal 2026
Capital returns
- During the six-month period ended July 31, 2026, the Company returned $231.7 million to its shareholders through quarterly dividend payouts and share repurchase programs.
- On September 2, 2026, the Board of Directors declared a quarterly dividend of $0.25 per share.
- The dividend will be paid on October 13, 2026 to shareholders of record at the close of business on September 29, 2026.
What drove it
- Q2 revenues increased by $348.6 million, or 18.5%, driven primarily by higher ORV shipments supporting retail demand and favourable SSV mix from new models.
- North American retail sales increased by 1%, driven by positive SSV industry trends and ORV market-share gains, partly offset by lower Seasonal Products retail sales.
- The supplier financial restructuring had an unfavourable impact of $74.8 million, or 330 bps, on Q2 gross profit and gross profit margin.
- The Q2 revenue increase included a favourable foreign exchange rate variation of $46 million.
- Six-month revenue growth reflected higher unit volume across most product lines, favourable ORV mix, lower sales programs and favourable pricing across most product lines.
Concerns
- Q2 gross profit margin decreased by 940 basis points to 11.7%, primarily due to Section 232 tariffs on Steel, Aluminum and Copper imports into the United States and the supplier financial restructuring.
- Q2 normalized EBITDA decreased by $74.4 million, or 34.9%, as lower gross profit combined with increased operating expenses.
- Q2 net income declined to a loss of $(136.8) million, due to lower gross profit, an unfavourable foreign exchange rate variation on U.S. dollar-denominated long-term debt and increased operating expenses.
- The Company expects Q3 Fiscal 2027 normalized diluted EPS to be down approximately 50% to 60% versus the same three-month period in Fiscal 2026, mainly because of increased tariff impact.
- Seasonal Products revenue decreased by $42.0 million, or 8.9%, as lower PWC deliveries reflected units shipped earlier in the first quarter.
What to watch
- The trajectory of tariff costs and the Company’s incremental tariff-mitigation measures.
- Whether ORV shipment growth, favourable SSV mix and market-share gains continue to support retail momentum.
- The impact of the supplier financial restructuring on gross profit and gross profit margin.
- Q3 Fiscal 2027 normalized diluted EPS, which is expected to be down approximately 50% to 60% year over year.
- Execution of BRP Financial Services, the Company’s new branded retail financing program in the United States.
- The planned sale of Telwater and the Company’s ability to manage associated risks at expected cost levels and expected proceeds.
Balance sheet and cash flow
- Consolidated net cash flows generated from operating activities totaled $686.8 million for the six-month period ended July 31, 2026, compared to $373.1 million for the six-month period ended July 31, 2025.
- Additions to property, plant and equipment were $(105.5) million for the six-month period ended July 31, 2026, compared to $(115.5) million for the six-month period ended July 31, 2025.
- Additions to intangible assets were $(21.9) million for the six-month period ended July 31, 2026, compared to $(18.4) million for the six-month period ended July 31, 2025.
- The Company invested $126.2 million of its liquidity in capital expenditures for new-product introductions and modernization of its software infrastructure.
Analysis
BRP delivered its second consecutive quarter of double-digit revenue growth, with Q2 revenues of $2,236.8 million, up 18.5% from $1,888.2 million. Growth was concentrated in Year-Round Products, where revenue rose 33.3% to $1,485.1 million on higher ORV shipments, a favourable SSV mix from new models and lower sales programs. North American retail sales rose 1%, supported by positive SSV industry trends and ORV market-share gains. Seasonal Products remained a drag, with revenue down 8.9% to $427.7 million as PWC shipments had been pulled into the first quarter.
Revenue growth did not translate into Q2 profitability. Gross profit fell 34.0% to $262.5 million and gross profit margin declined by 940 basis points to 11.7%. BRP attributed the deterioration primarily to Section 232 tariffs on steel, aluminum and copper imports into the United States and a supplier financial restructuring. The restructuring alone had an unfavourable impact of $74.8 million, or 330 bps, on gross profit and gross profit margin. Higher volumes and lower ORV sales programs partly offset these pressures, but Q2 normalized EBITDA still declined 34.9% to $138.8 million.
The earnings impact was more severe under IFRS measures. BRP recorded a Q2 net loss of $(136.8) million, versus net income of $57.1 million a year earlier, and diluted EPS was $(1.88), compared with $0.79. The Company cited lower gross profit, an unfavourable foreign exchange rate variation on U.S. dollar-denominated long-term debt and increased operating expenses. For the six-month period, however, revenues grew 23.9% to $4,628.6 million and normalized EBITDA increased 14.3% to $473.2 million. Six-month normalized net income rose to $121.5 million, while IFRS net income moved to a loss of $(9.5) million because of foreign exchange on long-term debt and higher income tax expense.
Cash generation strengthened during the first six months. Operating cash flow was $686.8 million and free cash flow was $559.4 million, compared with $373.1 million and $239.2 million, respectively, in the prior-year period. BRP invested $126.2 million in capital expenditures and returned $231.7 million through dividends and share repurchases. The Board also declared a quarterly dividend of $0.25 per share, payable October 13, 2026.
Management raised FY27 guidance to total company revenues of $9,225 to $9,475, normalized EBITDA of $1,025 to $1,075 and normalized diluted EPS of $4.00 to $4.50. The full-year guide contrasts with the expected Q3 normalized diluted EPS decline of approximately 50% to 60% year over year, mainly due to increased tariff impact. The central operating issue is whether ORV volume, SSV mix and lower sales programs can continue to offset tariffs, supplier-related costs and continued weakness in Seasonal Products.
Management, verbatim
Our second-quarter financial results exceeded expectations, reflecting disciplined execution and increased ORV shipments to support sustained retail momentum. Given our strong performance in ORV leading to additional market share gains, and reduced net tariff costs, we are raising our full-year guidance.
Denis Le Vot, President and CEO
Looking ahead, we remain focused on navigating through the volatile geopolitical and trade environment and advancing our long-term growth prospects.
Denis Le Vot, President and CEO
Not in the filing
stated, not guessed- Cash balance
- Debt balance
- Net debt
- Quarterly operating cash flow
- Quarterly free cash flow
- Quarterly capital expenditures
- Q2 operating expense margin
- Segment operating income or margin
- FY27 gross margin guidance
- FY27 operating expense guidance
- Prior-quarter comparisons for Q2 metrics
- Previous-release outlook for comparison with actual results
- Share repurchase amount and share count
- Dividend payout amount
- Quantified tariff impact excluding the supplier financial restructuring
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.