09:18 AM EDT, 09/06/2024 (MT Newswires) -- BRP (DOOO) cut its full-year outlook on Friday as the company's fiscal second-quarter results dropped year over year, impacted by demand headwinds.

The maker of snowmobiles and all-terrain vehicles now expects per-share normalized earnings to come in between 2.75 Canadian dollars ($2.04) and 3.25 Canadian dollars ($2.41) for fiscal 2025, down from its prior guidance of CA$6 to CA$7. Overall revenue is pegged at CA$7.8 billion to CA$8 billion versus previous projections of CA$8.6 billion to CA$8.9 billion.

The consensus on Capital IQ is for normalized EPS of CA$5.88 and revenue of CA$8.57 billion.

"The retail environment is more challenging with the economic context pressuring consumer demand," Chief Executive Jose Boisjoli said in a statement. "As such, our priority is to continue to proactively manage production and inventory levels, which leads us to revise our year-end guidance."

For the three-month period ended July, BRP's normalized EPS tumbled to CA$0.61 from CA$3.21 the year before, but topped the Street's view for CA$0.44. Revenue fell 34% year over year to CA$1.84 billion, trailing analysts' CA$1.9 billion estimate. The company attributed the decrease in revenue mainly to lower volume across most product lines as it continued to reduce its network inventory levels.

"Our results were in line with expectations and reflect our ongoing focus on reducing network inventory to maintain our dealer value proposition," according to Boisjoli. The company's Nasdaq-listed shares fell 11% in premarket activity.

North American retail sales for powersports products slid 18% year over year, mainly due to softer industry demand. The total powersports segment's revenue declined to CA$258.3 million from CA$294.2 million last year. Revenue from year-round products slipped 33% year over year to $985 million while seasonal products plummeted 40% to CA$541.8 million. Marine revenue sank to CA$59.4 million from CA$126.9 million.

Gross profit margin decreased by 470 basis points to 20.4%, as a result of a lower volume sold and higher sales programs, among other factors, the company said. Operating expenses fell to CA$302.1 million from CA$318.8 million in the prior-year quarter.

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