By Adriano Marchese

BRP cut its full-year profit outlook as the sharp shift in U.S. tariff policy leaves the powersports maker facing a major new cost burden, overshadowing a revenue jump in the first quarter.

The maker of Ski-Doos and Sea-Doos is particularly exposed to the new U.S. tariffs because of a 25% duty that is applied to the full value of each imported vehicle rather than to individual components. With much of its manufacturing located outside the U.S., the company last month said it faces an estimated 500 million Canadian dollars ($361.2 million) in additional gross tariff exposure.

BRP now projects normalized earnings, an adjusted figure, to be between C$3.00 a share and C$3.50 in fiscal 2027, compared with C$5.21 a share a year earlier. Previous guidance was for a range of C$5.50 to C$6.50, while analysts expected C$4.04.

Net income is expected to fall to between C$215 million and C$250 million, down from C$340.4 million in the prior year.

Still, revenue is expected to rise as demand across BRP's major product categories remains solid, with the company forecasting between C$9.13 billion and C$9.38 billion for the year, topping analyst forecasts of a modest rise to C$9.01 billion.

BRP said it continues to see strong retail momentum in key off-road segments, supported by recent product launches and higher volumes, even as tariffs weigh on profitability.

"Although the geopolitical and trade environment remains volatile, we are issuing a revised full-year guidance that incorporates both positive trends in our business and net tariff costs," said Chief Executive Denis Le Vot.

For the three months ended April 30, BRP posted net income of C$127.3 million, or C$1.73 a share, down from C$161 million, or C$2.19 a share, in the comparable quarter a year ago.

Adjusted earnings were C$1.83 a share. According to FactSet, analysts were expecting C$1.15 a share.

Revenues rose 29.5% to C$2.39 billion, topping forecasts of C$2.12 billion. BRP noted that North American powersports retail sales fell 7% from a year earlier, largely due to last year's snowmobile season that ended on an unusually strong note.

Le Vot said the first quarter's results were above expectations, driven by higher volumes, disciplined cost management, stronger overall execution and a more favorable promotional environment.

For the second quarter, the company expects normalized earnings to be down about C$1.60 to C$1.65, due primarily to the effects of tariffs and the timing of personal watercraft deliveries, it said.

Write to Adriano Marchese at adriano.marchese@wsj.com

(END) Dow Jones Newswires

May 28, 2026 08:30 ET (12:30 GMT)

Copyright (c) 2026 Dow Jones & Company, Inc.