07:55 AM EST, 12/06/2024 (MT Newswires) -- (Adds commentary from National Bank in the 8th paragraph after its first look at the Q3 result)

BRP (DOOO, DOO.TO) on Friday reported a decrease in third-quarter normalized net income on lower North American retail sales amid softer demand.

Third-quarter normalized net income fell to $85.2 million, or $1.16 per share, compared with $252.1 million, or $3.24 per share.

The results beat the FactSet consensus earnings per share estimate of $0.67.

Revenue also fell, dropping to $1.96 billion from $2.37 billion. Normalized ebitda decreased to $264.1 million from $462.8 million.

A lower volume of shipments, higher sales programs and decreased leverage of fixed costs due to reduced production have resulted in a decrease in the gross profit and gross profit margin, the company said.

The decrease was partially offset by favorable pricing, production efficiencies and optimized distribution costs.

BRP reaffirmed its full-year guidance, adjusted for discontinued operations, with revenues expected to be between $7.6 billion and $7.8 billion. Normalized earnings per share guidance is $4.25 to $4.75.

BRP retained its Sector Perform rating and C$84 price target from National Bank of Canada following the results, which were ahead of the bank's forecasts as well. It noted guidance was unchanged after adjusting for the pending Marine sale.

The bank said it is "encouraged" by the company's decision to not lower guidance and made progress in lowering dealer inventories. However, it remains cautious in the near-to-mid-term as dealer inventories may need to be reduced further in fiscal 2026.

Adjusted EPS was higher than National Bank's estimate of $0.67 and the consensus of $0.69.

Revenue was down 17.5% but beat National Bank's $1.88 billion estimate and the consensus of $1.83 billion. Normalized EBITDA also exceeded the bank's $223 million estimate and the consensus of $222 million.

National Bank forecasts revenue of $7.78 billion while the consensus sits at $7.77 billion. However, these forecasts includes discontinued operations. Ebitda is forecast by the bank to be $876 million, with the consensus at $941 million.

The bank expects EPS of $2.73 while the consensus is $3.15.