DOOO - Earnings call transcript Q4 2021

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, ladies and gentlemen. Welcome to the BRP Inc. Full Year '22 First Quarter Results Conference Call. [Operator Instructions]. I would like to now turn the meeting over to Mr. Deschenes. Philippe Mr. ahead, go Please Deschenes.

Philippe Deschenes

you. Good for BRP's call welcome morning first quarter and the to of conference Thank fiscal 'XX.

morning Sebastien Officer. Joining Executive this are President Boisjoli, me and Officer and Martel, Financial Chief Jose Chief

uncertainties the and you to consult will is certain certain risks Before we prepared could at can invite and will to the and of the under website subject to Please our you move differ call made brp.com BRP's information section. I listing assumptions from find made the the a based these. the in forward-looking forward-looking be on these Relations the note note during supporting and statements. remarks, be MD&A that statements call, for please to and slides that Also, presentation on result those during reference is implied Investor that

turn So with over that, I'll to José. the call

Jose Boisjoli

thank the last joining we year Good you, for start to first us. everyone, with the over you had our ongoing the record on and quarter Building several This products. a result, manufacturing in we solid above Thank morning, were experienced our Philippe. quarters, in lapping coupled the a we for expectation. which quarter which by growth was shutdown, operations partially robust fact came demand that with driven are momentum

of EPS result $X.XX continue to normalized year trial for guidance business, a $X.XX our positive and increasing the range these $X.XX we Given outlook for per are the by share. to

minutes. more detail facing are on in will the a I range, the few supply touch We given ongoing challenges than wider with we are maintaining a guidance usual this in chain.

of accessories first more lower an across and all for coupled financial Revenue first sales Now volume grew than lines, for primarily product XX% higher high business, let's by the a all-time detailed at especially look key expected to $X.X driven highlights program. turn four, our parts slide quarter. our to quarter billion, for with

period last XX% year, first surpassed fiscal the to our the of not revenues same quarter compared increased but fact, In only also 'XX. year

million five. per Not fold but outpace Globally, three while financial the Our XX% normalized excluding very earnings results $XXX or was can reached industry up $X.XX. to you remains America, all demand our in see in up as retail our in and normalized strong when consumer key EBITDA quarter, from quarter on only were region, retail continuing our solid, our the group snowmobile. the slide Powersport growth accelerated to fourth XX% North share

and Latin of Pacific. line, our a ran across in dealer markets in XX% strong EMEA in the at unit also our America, X% season. the We end performance XX% By international Asia as except snowmobile, in all had retail of product lineups of with up out grew we

availability I from a moment. product a For also moderate, as due moderate, was will growth side-by-side suffered color it more product to by limited low provide inventory. is more line in

When one parts. Turning the ongoing strong which rapidly. at the the slide the key quarters, late to third last limited despite in be challenges second we due of supply mainly and congestion X, expect first evolving logistic are retail in to to quarter, the few our constraints, was growth chain the of different the demand March, very in

creating which To delay working are managing the successful issue for are availability finding we dressing these of are and we at case, by with an are delivery to supplier substitute daily. our or In solution. was team new materials. supply, that certain Our predictable Currently, raw these alternative some logistic source manageable. tight find date and

because of of of For parts our but visibility. have our finding technical is where the source less our the with This has also dealing suppliers, This been challenge of X some presently X, is operation our some changes. regard main past with Tier main we month, shortage alternative semiconductors. the Tier to disruption affecting in

will few received. it components Given unit our delay to retrofitted. This these assembly, means missing is when be and the the units will components are need move some our challenges, our issues, timing a temporarily of the working to of will fourth final and deliver of quarter. of orders certain these Regardless increase This deliveries process. to all end our the objective situation by is

Our note into our last We deliver our to versus all our of capacity year this Juarez the and capacity has is plan been plan of these but balance Take guidance. full to factored are to this make of that at we production in the costs for running work are happen. and Querétaro process at schedule. the year, increasing it production through increasing issue

about few you slide remain our graph with low of that X, XXX the network, In observe provided year, from will situation, past challenges fiscal dealer years. better To 'XX the level and in at the inventory 'XX, fact, wasn't synced we to given production, throughout 'XX, and have other statistic the those the on days. on can Turning year. the our illustrate retail the impact inventory

XX growing an During with 'XX, to those in 'XX, dropped was days. the In fiscal XX our inventory the coupled quarter retail years, drop our surge it month given of double two first year fiscal low digits. In days. year demand, as below production as shutdown,

is our strong of of Also, the retail remain level the year limit for With take 'XX. will clear growth. inventory year, at continued remaining which will inventory place this to it replenishment now fiscal sales in that expect the demand, we

lines. strong demand product Turning to to continue our we X, consumer all experience across slide

industry to from impact New new entrants representing is for buyers of to driven our entrants only survey, doesn't be of the X% purchase the compared as a the Powersport distraction. continue first the historically. the news seem of This XX% only industry the XX% it quarter, to pandemic. According by COVID said vehicle to in and enter good about

women entrants In families. a more new more and younger representing group people fact, are diverse and

to compared per brands. including we industry. the our unit And and multiple, a demand and year contrary XX% vehicle belief, X%percent over to according of industry. not up our are purchase This sign of are declare making all of consumer general education double in instead our positive the of over survey, sustained interest. the of a above rider X strong are of only traveling. when a last a a decade the to products, booking, watercraft start growth to addition, our our strongest visits multiple for all purchasing unit is trending positive buyers record These consecutive In Website wheels fourth There the XX% have quarter long-term are for snowmobiles buyer to have trade-off, growth our unit, for personal digit trends mid of Powersport program our are registration target. season for

program a turn to year-round to richer vehicle. $XXX let's X, of side-by-side mainly a volume, we're mix and Now driven Revenue slide products. for up higher million, lower sales XX% by

side-by-side vehicles XX%, side-by-side is to Can-Am while industry our retail, low up side-by-side is at Looking XX%. XX date months season, American high season up North into the vehicle 'XX,

retail As delivered high performance international unit we as by and limited America more to were a digit we've impacting product as result, North impacted performance EMEA the availability, up was in in also retail is single to production of on-line Still and market, strong as we our Asia this very lineup facility third come end in consumer quarter. up forward at Juarez our for X Pacific. ramping to we look the the demand our expect the the with happy XX%

up into season the the the also Can-Am seven in with 'XX is is the line low ATV, months in with is American period. North to in low XX% retail the retail Turning and over industry industry up XX%. performing the same

side-by-side network is at inventory ATVs a worldwide flow. [indiscernible] both For

XX%. in months industry. into six now vehicle, is is wheel brand fastest industry X X the very Can-Am will start. motorcycle up three American season a up at about looking is to growing Now strong the vehicle North the wheel 'XX, It retail

over which up So retail XXX%. season, far this

trend younger and more up We program up with very three versus up internal XX% are new continue above with system community business the and The base, diverse consumer result X outlook [Indiscernible]. are at These have the we trend which momentum excited entrance ability the woman diverse wheel with for vehicle well sorry, XXX%. happy and are vehicle. a up continued retail to The and registration very expectation, with XXX% registration XXX% demand retail we notably to bode our attract exceptional for consumer wheel the education of very over positive. target, rider we is to

to Turning product seasonal to $XX million and and revenue XX% lower primarily were further slide driven richer from on higher shipments also health up XX, personal seasonal product watercraft program. of mix

retail and outpacing industry the Now looking months up compete. segments low industry retail, watercraft all XX, American retail over experience up Brazil. over the years. is in in share and six industry New start is retail and the the international in XX% in markets, is XX%. North of gaining EMEA, is trend The XX% personal over very that market XXX% the strongest we in Australia with mid at XXX% This up Sea-Doo in also season have we which into only in up season in retail the year the XX good Zealand

summer. the availability into Given already the tighter unit getting heading strong start is

a year, shipment to fiscal to which of this with the strong year. should end We again season expect level low very lead in inventory next the

with in and Turning ended with season percent in XX retail the position it over high history. also one its market was and the in teen compete snowmobile percent. American every segment market season the the the the highest to up North and retail same up which Sea-Doo with period industry number snowmobile, teen in industry share high

Our for momentum and also was up with low retail very the XX% Scandinavia quarter. in Russia, good

ended have of snowmobile and in the XX, pre-sold over favorite, We slide is to the unit XX to business the we are record last the all-time strong as Lynx very inventory year. Turning of XXX% with consumer positioned looking with notably return ahead, up magazine. well lineup low very brand introduction XX for and North America our season a the network Ski-Doo an season

the orders upcoming As we strong This us unit only are vehicle. at to million forecast strong across $XXX our exceptional the off. and unit historically. season all usage reminder, for accessories of also combined driven of about affected the available for experienced OEM Despite up PAME, apparel retail, It increased continued of which as year, XX% XX volume and parts, product product reflects strong similar challenges is XX% and increase accessories driving pre-order with were is interest line. to higher chain units link that's by our better results. trend supply volume Powersports due upcoming sales replacement and model and strategy that generated parts the Continuing to special represent XX% engine, Powersports a ecosystem clear look accessory roughly very exceptional demand spring delivered paying Revenue season. a volume snowmobile on spring particular. product Slide consumer allow compared to with This in which

to XX% million boat shipment impact were Now looking wind the of as revenue $XXX Marine slide of at offset on the [indiscernible] XX revenue, down more than strong engine. board

was Looking XX%. of was all, different are the the pleased Manitou over on products the brands new XX% to we the performance up, of introduction All was Telwater brands term the in about over Alumacraft retail up in and over at about will that, and with XX%. With both call our I track turn of for quarter, are Sebastien. our performance for with engine. up

Sebastien Martel

in. share than when suffered cost everyone. margin at inventory lower working gross we and Thank and the Jose Gross year margin for record last and margins margins terms We our faster to With lower first also strength morning, of last and expectations good $XXX products also quarter first cash our ever million of from mix EBITDA level This inventory our while operating operations with issues inventory chain from profit driven quarter better engine P&A than in to to capital for due continued The a the $X.XX. than of planned from delivered fixed sales to more benefited $XXX temporary demand higher. level inventory allows up Revenues programs anticipated gross turns. mainly retail operations anticipated better profit from our reached profit for work the strong, the environment by allows benefited compared the invested you, million production product sales generation billion $X.X margin. quarter, year's equitable to than outboard come Compared our programs gross manage resulting where on this process resulted higher focus expected components in a quicker of better generated exit a from When our $XXX to shutdown. stronger same supply last missing in was and work process than profit quarter was quarter margin in record period the XX% diluted normalized introducing in up the and us reached the absorption this from in XX%. us and of lower business year. per expenses, dealers notably in the of supply strongest constraint to chain our units the and ship normalized due earnings sales and efficiently million expected

We returned course million buy to through completing $XX $XXX also shareholders issuer announced in our in share CapEx normal bid. invested backs, and million previously our

Turning to at income the net XX of for slide a for key drivers normalized the look quarter. growth our

for as impacts for from the positive expense for quarter, very our million, by net normalized $XXX and income stronger programs impact long-term for which million. resulted P&A that volume, strong a continue strong of grew of normalize million, year's $XX by the million expenses we performance anticipated and $XXX offset sales our investing chart costs and tax pricing This we from continued As million expense million income demand, last $XX a $XXX driven had you can operating partly sales. depreciation driven sales net for fourth production for lower was see $XX was and negative mix, in higher growth programs higher normalizing from by the quarter than

for slide look network XX a to Turning inventory. at

down recent decline strong mentioned, ended a given year billion American level last the retail inventory at $X.X in first our of are inventory lines in exceptionally we all Despite last to the quarter a seeing versus client represents over with Powersport decline. This year. over ago. dealer value shipments Jose compared a have our experienced historic year, As finished North our inventory; quarters, growth the inventory combined XX% significant product increasing good being

For ever Can-Am ORV, as down fast. than about is the brand is being for very the higher everything XX% demand we ship network inventory retailed and is

XX% a a very in And earlier expect grow units end of of start These network levels summer year. the products, had consumers or improves inventory and strong for than this XX% lineups and our record QX, the are purchasing season versus very Ski-Doo to snowmobile, low season three-wheel inventories typical. level resulting down For at inventory gains our off a in of retail PWC specifically resume both to strong with Their last short demand respectively. very down year. share the we as more the term, are the limiting and XX% later low networks market for the for to in our are but remains availability ability starting strong all product of

update year, Now very stronger on guidance the snowmobile by mentioned, business. inventory year-end for notably our strong an turning first very sales XX than as expected upward reviewing well P&A the They're slide to driven quarter are given the year, guidance and for as for units than lower results, our booking programs our I for the we throughout spring low expected position. network

on going deliveries lead chain and the to the the impact in timing of target that turn in supply challenges visibility likely would are believe which We to continue that with today, our to of shipment constraints delays lead QX but reception and also dealing the will supply will in of we expect remains that chain we volume QX, Based full-year we products. product intact. have the delays

supply the than commodity impact We for and have account increases. maintain guidance range price usual a chain of to additional the for and wider potential costs included constraints

between last expect XX% to to our XXX representing year. company are XX% over XXX between total and a EPS XX% and between growth Following XX% our these of normalized adjustments, XX% to the we now and and grow normalized to grow revenue XX% EBITDA end

we therefore for more chain QX. in a in third the dynamic, QX, slide mentioned, the in in normalized the the slight to of Now EPS modest, more quarter, year pushing for on the expect and volume growth weigh XX, we growth additional fourth to quarter, this and color QX generate in quarterly strong as given supply expect normalized a terms constraints decline EPS, looking outlook some at second on

of a Powersport expected low and mentioned strong retail terms fact very constraints lead the chain our improved In year, QX we will supply retail, impact quarters coupled of and that as be additional inventory, in lapping [Indiscernible] QX network growth with American our of last North the previously to decline and as notably capacity, with unit deliveries in return should the to from we'd facility. sales and for benefit QX production side-by-side level

to the to with For growth we up high SSV expect the retail year, Powersport our turn digit between the somewhere call American flat over generating to that. strongest on I Jose. will end single North

Jose Boisjoli

you. Thank

into year the the to was sculpt continue fiscal conclude So and and one XX. exceptional one momentum an best

job Our Despite with running year. the well and year for team our and with to managing issue, at chain we strong guidance full excellent is increased deliver solid product, related expect demand program, all for the an facilities to continued consumer are our strong finish sales given the lower our demand ongoing supply doing the results capacity. positioned the

meet for thank longer would also our safety for our in thank to on and dealers line. hours, their the In shaping BRP long-term of pursuing to with into I additional capacity as the different protocol and future patience front continuing by as customers, driving both follow diligently on production turning managing addition, to functions. our for like lifelong executing for are like new orders vehicles. administrative ramp introduction, to growth, [indiscernible], extra continuing employee electric doing entrants would our supplier product for to for and we position COVID generate production projects working our investment new their and consumer in advantage taking up market to well I including of work

the agility, in will like unusual the I these note, would turn to and On time. for that questions. for I resilience to call all over Lastly, operator thank their dedication them

Operator

the of Farley first from line [Operator question comes with Robin instructions] Your UBS.

open. is line Your

Robin Farley

help you of Great. wonder about Thanks. the back I get to is, way events. were all to things related shared the off-road. I an the some realize dealers is I dealer the that also limited that if And to quantify opportunity, days, from from, between can us production that quantify restocking maybe engine is, if potentially fiscal wouldn't there, capacity heard you And availability some XXX so One wanted inventory two which was ask XX of help and can by just restocking. thinking but that. had then snow engines we kind

just, whether whether that of you side-by-side your if there your limit Rotax trade-off limiting there? will so production later address to that kind I production make could And a year, of you have is off-road kind Because capacity. Thanks. engine the wonder is snow or this of that

Jose Boisjoli

Good part. take I'll Robin, morning, the first

is part running I the a the think obviously, as said second XXX Charles with of terms of historically, going you in to we were we're take opportunity, replenishment days inventory.

as our gain industry will the to restocking running industry guesses market the well of at lower, as Our, that absolute range a share obviously dollars above you're billion probably have the grows, but in be looking opportunity dollars. we in an

can best the discussion what sizeable. October. and we a right. to optimize to try the do better parts now product on it Robin in believe the levels of with to sense availability, Then engine to we about and continued that with for this snowmobile. your demand the our have with in are inventory an is we can, some, They line that manage product. respond does deliver to the now. start that dealers, demand the the the them to component. you situation. and to next seasonability having need is of ongoing to the there is of prepared it remarks, on obviously trying year going So And Then alluded to happen low of our suppliers, we to And the the lot what between try maximize depend consumer as is don't challenges component Josie limited this quite engine restocking will question to definitively because we capacity In dealer we have Dealer but products manage Arthrotec we is some second are,

Operator

line of the from Doerksen National with Financial. Bank comes question Cameron next Your

Your is open. line

Cameron Doerksen

morning. Good Thanks.

Just wanted retail. to the on I guess, questions

you Seb, year full think high the your that digits. I to expectation up was said for single retail flat

two and an a there ago? a for to you number of this retail what that addition any bit anomaly. us confirm last sort to idea is was your in years of can give year is that, year wanted of Obviously of expectation bit an Just way versus

Sebastien Martel

Yeah. Good correct. morning, Cameron. that's Yes,

retail up You a correctly so quoted on flat quarter high quarter. by the me, Obviously will to vary single digit.

to personal second years could This at quarter, when three strong retail it with pull with, for we the compare ago, the if quarter years I some should look than tell had you What to two be believe QX wheel. in ago. watercraft forward I I very from two second flat retail I quarter compared

last was obviously very strong continued that's why lapping So obviously demand, quarter compared two strong year. ago will and down we but strong years be a year to last a be quarter to compared we'll

Cameron Doerksen

would do number Okay. that maybe teens the XX% ago high the years versus for expectation two or I any, guess, I full you in even have a year? year? full for be of And the kind think the

Sebastien Martel

full the year, high be low for in the teens to twenties. it'll Yeah,

Cameron Doerksen

up maybe demand portfolio? there base very, talk Vegas, any about Riker, ahead spider broad three-wheel And of with Is it, plan. cost between to really there product the or way in, you're retail and follow because in doing just want obviously to is in the very a question well market on entire to difference the

Sebastien Martel

customer the Riker would we of because Riker base But all the the Education have Riker point. we program is together know sure that program many younger customer, you do program a many the but price the very, that road the RTS tree I the would I point on base. and Riker attracting say people a put also customer the momentum For of is younger affecting [indiscernible] price attract wheel X we're customer, all the definitely the than because it's models three know on model you woman happy. very say But

Operator

with Your of the next line Kennison question Craig from Baird. comes

Your line is open.

Craig Kennison

question. to my shortages? you for really allocation. the fairly dealer across inventory network, taking are given thanks guess What allocate And It's I doing your morning. good Hey, on

Jose Boisjoli

We equitable will don't, mid to because do could other. be long-term to one do but not versus don't be we favoritism the to we everyone second will dealer favor try as helping you term the that We impacted the dealer and because can countries after by region the allocate by that fair and protect and to this. obviously sure we we mid we're dealer as by after to by Then to trying network very as long-term. dealers. to that all But it's be short don't between the be make we much trying

Sebastien Martel

talked and I about say value correlated OMS our the to we Management but order, Order market are. share key that targets And dealer and the proposition places what a system, what an where orders elements the are model are System also their would dealer is an objective

obviously treated that make sure fairly. So that everyone's

Craig Kennison

place are dealers themselves? help help even liquidity inventory Is or there your trade facilitate, to used better then anything guess, what And systems among either I to help help inventory in can dealers themselves? do Thanks. new BRP to

Sebastien Martel

was has where the typical dealer typically they can. In said, to -- between the each wants of less in XX that hold themselves. has dealer being trade there each months trade network dealer every they every other unit than region, to because definitely a dealer last But

Operator

line from Desjardins Your the of next Benoit Capital question with Poirier comes Markets.

open is line yet. Your

Benoit Poirier

issuer deployment is bid could bit a the strong that and environment, about you congratulations quarter. something for light Could capital everyone morning, market Good talk in little a favorable of substantial your good balance consider? you sheet and strategy whether the

Sebastien Martel

and we allocation strategy sheet a said, we flexibility. success our do strong a balance sound have as provides part been of that has Obviously us with a capital

in As maintain year up we've CapEx approach. $XXX always said, the our million look company priority at to to guidance is disciplined we of growth and the invest investment, our when the that for you

in purchased saw X.X NCIB in also December completed almost our you shares. that we completes Last we QX, million million $XXX about We invested started. NCIB. buybacks. we As That the share the

the opportunity And good in said, until do while sheet. So strong balance is NCIB December. we then, have to next news the start as a you would

to do in -- and do be opportunistic that flexibility that we if decide buying that have we We have shares, we possibility. have

obviously decision window. time and there's no NCIB the now now, but said, So taken I as next between

Benoit Poirier

at supply talked Okay. respect there's about road the their the with also and the wondering That's Sturtevant, strong chain new was or deal also to in capacity Project increased the require great. new you Juarez tax? either X, Valcourt I impacting Austria which the up consumer M whole, if Josie demand at at the and given And constraint. to ramp and

Jose Boisjoli

Benoit. morning, Good

question. happy already growth revamp equipment, there a is Juarez see as were if capacity manufacture for hull the some far will facility satisfy but ratio, is we're short Then year realize good capacity are time. Querétaro planning be the feel back motorized the watercraft right the network maybe ramp plan fiscal will QX plan we X 'XX. 'XX, optimize dealer with with, we in up and M of XX%. then of our have site, key a is there's to also network. then term and Sturtevant fiscal we in engine manufacturing supplier had. running, That the you end the investment you production doing be first very M then of made we timing on we fully component project compliment Juarez year Project in that X to for First production plan as is engine on ourselves We have also and mode need tweaking of very is we this is we engine very on production plan. then on to the tough period, to, Sturtevant, a And is and the Then and answer an Querétaro to will we overall QX a Overall on good to end with of start in this be what on and the to in Robin

Benoit Poirier

Okay. for That's me? you. great. That's Thank it

see. Let's

Operator

line Frederick Wolfe from comes Wightman Your the Research. next of question with

open. is Your line

Frederick Wightman

Good to Thanks morning. the just look quarter provided for expectations. wanted you'd for Hey sort question. retail I at guys. taking your back the last commentary of

a quite at If above talked the digit full I single bit posted, quarter. you high you about we retail. look in came what for think that you

for out-performance availability given supply mean sort what the here demand, than consumer of in of us? retail does the outlined and of drove that So how expected terms these better sort that XQ, that you parameters XQ a what and for for out was guidance shake you've that better does

Jose Boisjoli

Good out delivered we softer terms soft, would that did what numbers. more morning, That be bit you're than right. call of actually Fred a we retail in

level. I set accelerated is retail and surprise and the at production wheel personal in think certain the X watercraft for a obviously was

the So that whatever stronger going to lose we QX second in Obviously were the second acceleration what expecting. retail the growth we so retail and for quarter. quarter in impact our quarter provided it's that in is we for expectation first retail versus

Frederick Wightman

just talk sense. And tied to sort you change how internal in question patterns pre-sold And circling the allocation from if can any Make allocation pre-sold order factor seen into you've units units earlier, system? specifically? about sort the of of back to dealer

Jose Boisjoli

Yeah.

First we give an is we for try to every try example to you like to I'd goal and order our to snowmobile. -- unit pre-sold consumer. the

pre-sold we the at our that of pre-sold -- production next Our a is record unit trying order every to product is every for line. And unit pre-sold season, record high. single

best but it, on pre-sold the to we doing everything visibility consumers. we make to the protect is team less their is have sure still We have

Operator

Martin of Your line next the from question Stifel. comes with Landry

line open. is Your

Martin Landry

is accessories. It Hi, your during question quarter. revenues good increased the on and fast as apparel parts, twice morning as everyone. first My your

color what on you can explains that strong was performance? us So give I wondering some if

Jose Boisjoli

is usage, then than is It's have used season The two product product the snowmobile a using the element. product product typical. a customer of during usage more -- the lot We winter, one this it saw mix thing.

the The accessories. second one is

can This where fit is this You many line. many ecosystem can together we growth. it's of are that doing well. link thing that know, accessories the accessory Then product is fit product extremely many really, the, two same a put generic line, combination things the to those

Martin Landry

consumers. on the survey And Thank very some interesting question was on you. on shared Okay. my on, my, point you data other the, your

distraction. purchase unit of entrance You, X% you were vehicle X% quoting a as you're traveling as, a purchase of of mentioning of, you new COVID buyers the only X% instead and

if that if, these products then year, by, a surge explained what staycation does and small seen portion COVID So demand the were by then, and explain Powersports of you growth, the in that for you've And this surprised just results?

Jose Boisjoli

that all customer giving it education, the right select during job Then good the and very to COVID numbers. to think fiscal ride. our just the educate to is the good program the thousand it yes, this did who website to ride 'XX marketing trade-off that sure This distraction, if to I ago, of when, were are versus encourage is purchase QX We versus we year to our quarter, very survey by tripper our quarter And a don't then for the result entrant industry. new them then do 'XX unit those the last big need, know reminder, that try -- extremely in quarter the QX, is you that think XX% every year done make end a quarter you was as and of one but also woman 'XX, and better the rest surprised year true X% them to craft other make the two a the it's at fiscal a surprise and try X% customer to educate are traveling, growing out we're up promoting was a strong easy each it Powersport we website new off is give of to few for and about historically those community what a happy first, a for XX%. who the We It's was where said today the number we product the, road. incredible to and percent portion. a at is are the team on and need only increasing the that the the we then people they look we combination I very writing A

Martin Landry

of instead Great. we And that were about just you distraction asking were, and was to have these evolved? that traveling as COVID that the benchmark time some purchase if first see questions

Jose Boisjoli

one. one every the and are that quarter a one critical And the first a little. questions, certain we that's relevant less, need the remove less but many, most the, we're the traveling of too to to And the had try asking number too Yeah, want and question good not was that survey, of time this time. if is first you do every, you

Operator

with next from Collins Sean Your Research. question next line your of comes the Citi Group

open. line is Your

Sean Collins

Good a ask My products wanted challenge be or but resolve of inventory challenge, class how similar certainly on have question comparable might of Thanks. any played may itself, if Thanks. impact its any context is a on I are a periods environment I'm out experienced high past is you morning, gentlemen. Great. still from challenge, where and a historical and environment today's unique there inventory maybe that compute, results. the period, to helpful. curious lack retail scarcity Today's

Jose Boisjoli

Then I question. the producing through and period that in would supply I we remember to 'XX, an say like, I BRP that's able XXXX of started with product I watercraft we're say line. to saw would a mid going in were interesting not demand. a the

and use Powersport. four Then was one off was whole I think For industry, the but this, history product taking there time the our line I years growth others, in the like first saw product industry, is incredible. three, line all versus there in having of the no years, over out

Sean Collins

Okay. Understand that's helpful.

is really on unique. rising to pass supply input just Thanks. those, curious consumer? brief are to of challenges costs as kind well the a those any just experienced you chain it Maybe some the, successful and costs any, follow-up how on So you to and commentary truly

Jose Boisjoli

Yeah.

sense and for model it's July this announce you increase X of that's partially pricing Marine, we'll June effective the the you to September way then between increase in and watercraft many for year a it then X those On was you effective side that's the and announce price are where our now, year, special plan with for for right the our our critical? we July on product and already typical model [Indiscernible] that's a whole be X% announced just the all the cut Powersport will and every being the we on edge, lines. is change, ORV We price X Alumacraft side, surcharge and to obviously we shortly modular give change X% very the watercraft supplier, change, for are the hedged increase as

Sean Collins

is Great. Thank That helpful insight. you.

Operator

line the Securities. Your next of question from Morrison with Brian comes TD

is line open. Your

Brian Morrison

when you Is same terms about or or question the XX,XXX in Is Can do running? that to event? also ramp talk you about And morning. then going can ground good for hit talk Juarez units? PWC of Hi, of a commence those that X, QX back Querétaro, running? QX that the you extra will and ramp trajectory methodical a

Jose Boisjoli

let's you In QX. ramp X team Then employee training have and of on backend X. Juarez up Yeah. start something with see is year, the three, will can can be months XX%, way the, Then four the then construction already the production let's this the you probably this a the will Juarez ongoing. say We it maybe that run you that. count say fiscal like at year,

from there start fall. 'XX, obviously XX% be production some done but the of can project year, M Juarez we product, Querétaro for coming which a is in in additional that's will is this you watercraft, for start the production additional QX. Next in fiscal new year the That be when in X. means August, the capacity, capacity will count selection

Brian Morrison

to you is $XXX at gears in million current where cost put with the update changing from and all that of that MXX, dynamics? with the more entails? we savings then Or that hold side are equation, the cost on And can what Okay. said on differed us the or

Sebastien Martel

And some with were making one pillars there are that was performance better see to focused driven in you big $XXX the the that we've time, is as units that cost done obviously million obviously on as I of many product levers by our all that producing very million the we last MXX produce. can of saving, the our approach. the strong, Well, we said modularity team and the, and we, $XXX very sure is is quarter obviously, this margins. of also products introducing engineering But

we're So are even us the -- especially I'm learnings to inventory to get not worried learning back sales ability industry will of more that when of some operating. with what on comes we'll again, that low have programs. way levels about normal and to There a with stay $XXX our million

Brian Morrison

Can you us at this far give point time? of just sense are how through a in you it

Sebastien Martel

on you to color? Well, near again, look analysts Brian, obviously MXX to And future more call give updating our investors we'll plan. in tough the and forward we'll

Operator

is next open. Derek comes question from Canaccord the with of Your line Dley line your Genuity,

Derek Dley

the some changed performance me, call margin view margin. limited going up all, in gross gross to the or strong from margin here in pandemic. Is stepped seen that normalized mid just of it sales promotional Has the it's with your forward XX% sort just on programs. prior spending in your one we've Yeah. Hi gross Obviously view? was

Sebastien Martel

expectation well, plan part and should we deliver target last to our gross be savings. year, when strong, compared as our 'XX this cost for MXX very for that Well, $XXX this we, year of is we margin. our million year to up finished fiscal And year slightly

Obviously this quarter be Some that benefited back of it'd sales. improvement. and margin of higher we'd from a proportion

lifting These are assets, are our had better that margins, take introducing the margin as do we yes, usage believe of a forward, gross engine products well. but help will the that bring margins we as continue doing business up. we outboard going is And so that I elements the better that all with

Derek Dley

one Okay. R&D No, like revenue, that's should of -- percentage X a going more expect continue forward is kind helpful. which And X.X% typically something to just well? then as we that actually of

Sebastien Martel

Yes.Yes.

Operator

comes next Katz mind question Your the Jaime with from of Morningstar.

open. Your line is

Jaime Katz

willing segment? the Would or little that were seeing for business. don't in boat, issues I about the Hi, clearly Marine has chain not whether good supply the morning. pervasive my that slightly delineated, bit or you whether Thanks more it the taking a you consistent were to as talk be been was questions. that for think throughput

Jose Boisjoli

obviously challenges and where depending but Jaime. seasonality working it's same, the that morning, think and of and an Good line affected product the with about lines, Yeah. we're product are that -- Yes, excellent that's prob facing, our suppliers. same all is the job after doing I our team all between

snowmobile. parts have is Then need with really have we the the to don't on that snowmobile We versus orders optimize that's An to parts We situation. snowmobile retrofitted, to product starting need example all one now make line work consumer consumer we towards the missing be from that it. orders internally October. but on and because type others. need time right that producing we retail need with we and optimize allocate try and the some will, product Sometime to will in we sure to to we first our the suppliers of line thing record deliver to to dealers work situation try the between to

Jaime Katz

Okay. increased guys they'll what you in your account heard the cost for or then out you costs you but think I what for this commodity have year expect to don't laid I And number, opinion?

Sebastien Martel

a expectation programs, that, the mix we given will of the rest color, rest No, in basis going for commodity higher I'm of I'm I year. lot to I the to is if look impact but haven't offset margin of for about logistics, the QX the is given to any sales at the year, happy what than be XXX had I volume costs but the continue point more do and to on expecting with continue of QX able so obviously an that saw

Jaime Katz

of about equal will to outpace and year, the going sort Okay. at this? or industry do your constraints And across is with of you thoughts the we'd out how competitors there of you sewing market pan share channel think forward, the at perceive able the any end sort then, the your be

Sebastien Martel

with Well, us – supply to an we fourth in production we obviously to will our capacity provide quarter ability with with a demand. and inventory the believe competitive important advantage significant and replenish increase that in side-by-side they

the be driving business. chair should that foresight of gains So

Operator

from with BMO telephone ask then your the line please one keypad, comes line star, of number Your a the question, Capital Again, your like Gerrick if on is you to press Johnson question next would open. Markets

Gerrick Johnson

question the Greg. good inverse Hey, to I sort have morning. of

do had retail I width books question over risk have the policing with you now, had you your inventory at to down in XX your your is dealer mismatches since level. on any but do about past there about of so like right and inventory Greg you place weapons And have ordering asked in was in have the other that obsolescence have is place, and to As get sort materials the XX%, difficult that ordering what the of own you and before product your

Sebastien Martel

I answered have then question the will see I the Gerrick. set second. first morning, will Good

following the On product know off-road line pretty have than like allocation a we different very are a idea we year round product. growth a that, obviously pre-sold of perform good And question, and product each unit how dealer seasonal much dealer. you not We out want dream in can letting following product everything we on your depending for target after seasonal for have order big like or and that deliver. like dealer give performing year, your people. Seasonal exactly dealer a the or the each each for by depending that region we plan year that's numbers to a on we and how it's why how wish try the each product. is the discussion well me And the worked about new very Then for the this unit disappoint a cannot not with sales have with, the list. the,

end will mix, the now, on a to fair versus try working our but be the we product the to And to job sure, it's location region on the right On that site off-road we're others. that year. We also be of don't Craig make answered favor the till location. I on like off-road and

Gerrick Johnson

Okay.

Sebastien Martel

XXst, material, license. yes. your this on raw raw opposite the whip compared gen quarter question A in no concern material on $XXX over is on to million And

inventory So quickly. very around that

a in then getting units. So retrofitting the of parts the missing question and it's

but So high, number under is obviously well the control.

Gerrick Johnson

of Cause a derivative more, on distraction forward. boat the purchases I see case some could the only And X% you Okay. as had the rear year? that of him, those if but was friends bought COVID a one near don't as said second the then he just of kind how curious driver new kind asked that, COVID-XX XX% entrance, many maybe said last number who people if that here distraction, were of going the

the with a You friends base, up Joneses, install, that. have bigger keeping more like things

Sebastien Martel

team what that but the new we versus have the that know. that I, you, exactly my which but answer more, entrant her direct XX all this. with have to statistic a for sure. don't don't has, the more that can a see I I than but family have, to XX positive, see and are XX% purchaser have I don't if We I to share younger maybe I the, I the, don't is you're than Quencher oriented asking for. woman answer purchased more there is

Operator

Mark Your line the next question comes CIBC. with from Petrie of

is line open. Your

Mark Petrie

current in all I fiscal the you. over Hey, a sort of commentary your in ask into that, levels good time. that to programs so regards pricing the expect you in half the place with the how guidance do the morning. expectations terms of the expect of of Do embedded 'XX expect What's far. promo your with over bit for regards Thank to you to thanks year. remain looking of time? And forward programs to normalizes and just sort that the course you about utilized then of back the evolves wanted the industry are little of or course

Jose Boisjoli

in of that XXX in remain I XXX indicated performance fiscal tailwind that back points. year strong from Mark. And fiscal March, we've programs we a expecting with about When points assumption. were a talked to we we obviously QX had Good in that year basis in morning, had adjusted basis 'XX, we 'XX, positive

looking program. a we're tailwind more now from at XXX coming basis So point

we the still 'XX. about Next is switch inventory when leaned. inventory on it's be the We're thinking X, year and going replenishment February year, obviously turn to fiscal in

happen it's more back to going half year. So the next of in probably

the next I will side. the line, from call. COVID us benefits obviously, stay provide how we there the expecting of to commercial to we bottom will programs much, half with favorable forward still first important I And tailor as that learnings going to are that too maybe said, some on are to So our early year how be and and obviously

Operator

to I back time. the There are questions no over presenters. call further our this at turn

Philippe Deschenes

And look project just to will Can-Am. morning. XX able you weeks this wanted also opportunity to the our and to that sharing we Thanks events you, us feature to and you out take go, virtual product that. with new let we'll for join introduction, we Can-Am wheel us invite again and join to on joining We and over X and for all have you more be off-road August before thank launch vehicle the see of us will you hope next the with be this official day. few information forward about the good a we Super,

Operator

Ladies conference this and call. today's gentlemen, concludes

You may now disconnect.

BRP (DOOO) 3 Jun 212021 Q4 Earnings call transcript