BRP Inc (NASDAQ: DOO) reported second-quarter fiscal year 2027 revenue of $2.2 billion, an 18% increase year-over-year, driven by strong off-road vehicle (ORV) demand. The company raised its full-year normalized earnings per share (EPS) guidance to a range of $4 to $4.50.

Financial Performance

The company generated normalized EBITDA of $139 million and reported a normalized loss per share of $(0.18). These results included an incremental net tariff impact of approximately $145 million compared with the same quarter last year. Free cash flow for the quarter was strong at $193 million, contributing to a year-to-date total of $560 million. BRP ended the quarter with more than $600 million in cash and a net leverage ratio of 1.6 times.

Gross profit was $263 million, representing a margin of 11.7%. The year-over-year decline in gross margin reflected tariff headwinds of approximately 740 basis points and a one-time supplier financial restructuring charge impacting margin by 330 basis points. Excluding these items, gross profit margin would have increased by approximately 140 basis points.

Strategic Updates and Leadership

BRP announced that Chief Financial Officer Sebastien Martel will retire in April 2027 after more than two decades with the company. Minh Thanh Tran, Executive Vice President of Global Corporate and Product Strategy, will succeed him as CFO. Martel will serve as an executive advisor until his retirement.

The company launched BRP Financial Services, a new US retail financing program designed to enhance customer engagement and support retail growth. Additionally, BRP expanded its ORV lineup with new utility side-by-side models, including the Defender HD10 platform and the XU series, targeting the growing utility segment which has quadrupled over the past six years.

Guidance and Outlook

BRP increased its full-year revenue guidance to between $9.225 billion and $9.475 billion. Normalized EBITDA guidance was set between $1.25 billion and $1.75 billion. Management expects third-quarter normalized EPS to decline 50% to 60% year-over-year due to incremental tariff impacts, implying a stronger fourth quarter.

The company estimates full-year Section 232 and 338 net tariff exposure at $200 million, or approximately $225 million on an annualized basis. BRP expects to generate more than $800 million in free cash flow for the fiscal year.

What the Numbers Show

Despite robust top-line growth of 18%, BRP reported a normalized loss per share of $(0.18). This divergence is primarily driven by significant one-time and structural headwinds rather than operational weakness in core sales. Tariffs alone reduced gross margin by 740 basis points, while a supplier restructuring added another 330 basis points of pressure. Excluding these specific items, the underlying business demonstrated margin expansion of 140 basis points, indicating that the revenue growth from strong ORV demand translated into improved profitability once external cost shocks are removed.

BRP Financial Corp (NASDAQ: DOO) raised its full-year financial guidance for FY2027, lifting both adjusted earnings per share (EPS) and sales projections above analyst expectations.

The Quebec-based recreational vehicle manufacturer increased its adjusted EPS outlook from a previous range of $2.19 to $2.55 per share to $2.89 to $3.25 per share. This revised estimate exceeds the consensus analyst expectation of $2.71.

Guidance Revisions

Simultaneously, the company adjusted its revenue forecast upwards. The new sales guidance stands at $6.664 billion to $6.844 billion, up from the prior range of $6.653 billion to $6.836 billion. The midpoint of the new range also clears the market estimate of $6.650 billion.

What the Numbers Show

The upward revision in EPS guidance is significantly larger than the marginal increase in sales guidance. While the top of the sales range rose by only $108 million ($6.836B to $6.844B), the top of the EPS range jumped by $0.70 ($2.55 to $3.25). This divergence suggests that the improved profitability outlook is driven more by margin expansion or cost efficiencies rather than top-line volume growth.