BRP‘s first-quarter retail sales increased 14% year over year, spurred by growth in the three-wheeled vehicle segment, the company reported in a May 30 earnings call.
Three-wheeled vehicle retail sales increased 110% year over year, the company reported. Specifically, the OEM credits the sales growth to the introduction of the 2019 model year Can-Am Ryker.
“Our channel checks have indicated that the initial reception has been extremely positive for the [Ryker] product, with dealers frequently commenting that they wished they had ordered more units,” Gerrick Johnson, an analyst at BMO Capital Markets, said in a report provided to Powersports Finance. “Furthermore, [BRP] cited the average age of a Ryker buyer is 10 years younger than the average Spyder buyer, likely a byproduct of its lower [price] and a good sign for the long-term health of the brand.”
Retail sales of year-round products — which include ATVs, side-by-sides, and three-wheeled vehicles — increased in the 20% range. Percentage sales growth for side-by-sides and ATVs was in the high single digits.
For More Read: Vehicle Innovation to Bolster Growth for BRP, Analyst Says
U.S. retail sales were initially impacted by wet and cold weather until March, which led some consumers to delay their purchases, President and Chief Executive Jose Boisjoli said on the call. The OEM saw retail improve as the weather got better in April, and “this trend is continuing so far in May,” Boisjoli added. BRP expects sales to pick up in the summer season.
Total revenue at the OEM increased 17.3% to $990 million in the period, a first-quarter record, Chief Financial Officer Sebastien Martel said on the call. The increase in revenue was spurred by sales growth for ATVs, side-by-sides, and three-wheeled vehicles. Revenue growth in North America was up 19% year over year.
While BRP reported a “solid” first quarter, a possible 5% U.S. tariff on Mexican imports creates some uncertainty for the Valcourt, Canada-based OEM, BMO’s Johnson said. “BRP makes Can-Am off-road vehicles and Sea-Doo personal watercraft in Mexico,” he said. “Should this tariff be implemented on June 10, we estimate an $80 million pre-tax impact on an annual basis.”