Can-Am Maker BRP Posts Strong Q1 – Polaris Struggles in Off-Road Market

BRP Inc. (makers of Can-Am off-road vehicles, Ski-Doo snowmobiles, Sea-Doo watercraft, and more) has released its first quarter fiscal year 2026 results, and it’s a mixed bag of highs and lows. In this casual breakdown, we’ll explore how BRP fared in Q1, explain key financial metrics in plain language, and see how BRP’s performance stacks up against rival Polaris Inc. (the company behind Polaris RZR, Ranger, Indian Motorcycle, etc.) over the same period. From revenue and retail sales to market share, plus strategic moves like selling off boat brands and a coming CEO change, here’s what powersports enthusiasts need to know.

BRP Q1 FY2026 Overview – By the Numbers

BRP’s first quarter of FY2026 (three months ended April 30, 2025) saw a slight dip in sales but a big jump in reported profit – though there’s more to that story. Let’s start with the headline figures from the earnings release:

• Revenue: C$1,846.9 million for the quarter, down 7.7% from the same period last year. This drop reflects weaker industry demand and lower shipments in some product lines.
• Net Income (Profit): C$161.0 million, up 278.8% year-over-year. Don’t let the huge percentage jump fool you – last year’s Q1 profit was very low (only about C$42.5M), and the surge this year is largely due to one-time factors (like favorable currency exchange swings) rather than a boom in the core business. In other words, accounting gains gave BRP a profit boost, even though sales were softer.
• Normalized EBITDA: C$200.8 million, down 34.7% year-over-year. EBITDA means “earnings before interest, taxes, depreciation, and amortization,” and “normalized” EBITDA strips out unusual one-time items to show the underlying operational profitability. A one-third drop here signals that BRP’s operating performance was weaker than a year ago, primarily due to lower volume and slimmer margins this quarter.
• Gross Profit: C$394.8 million, down 24.3% from a year ago. Gross profit is basically revenue minus the direct cost of goods sold, and it shrank significantly. BRP’s gross profit margin fell to 21.4% from about 26.1% last year, meaning the company made less profit on each dollar of sales. Why? They had to offer more promotions/discounts to move products and had lower factory utilization (since they produced/shipped fewer units), which drives up the cost per unit. The only silver lining was some production cost efficiencies that partially offset these pressures.
• Normalized EPS: $0.47 (down from $1.58 last year), while Reported EPS (earnings per share) was $2.19 (up from $0.56). This again shows that after adjusting for one-offs, the underlying per-share earnings were down, but including those one-offs (like that FX gain or discontinued operations) made the accounting profit look very good.
• North American Retail Sales: essentially flat (0% change) versus Q1 last year. This is an important metric – it reflects how many units dealers sold to consumers in North America. Flat retail sales might sound underwhelming, but given the industry was actually down, holding steady means BRP didn’t lose ground. In fact, management noted this performance slightly outperformed the wider powersports industry for the quarter.

BRP delivered Q1 FY2026 results roughly in line with expectations amid a softer market. Revenue came in at C$1.847 billion (down ~8%), while normalized EBITDA and gross profit declined more sharply, reflecting squeezed margins. Net income jumped thanks to one-time gains, but underlying earnings (normalized EPS) were down. The company managed to keep North American retail sales flat year-over-year, a relative win given industry headwinds

In short, BRP’s Q1 saw lower sales and margins as the post-pandemic cooldown in the powersports market continued. However, profit was propped up by unusual gains, and retail demand for BRP’s products held up better than one might expect in a tough environment.

Snowmobiles Save the Day, Year-Round Toys Slow Down

Diving into product categories, BRP’s quarter had a tale of two segments: Seasonal Products (like snowmobiles) versus Year-Round Products (like ATVs, side-by-sides, and roadsters). Here’s what happened:

• Snowmobiles (Seasonal Products) – Strong Finish: BRP had a “solid end-of-season” surge in Snowmobile sales. A late snowfall this year extended the winter selling season, and BRP’s Ski-Doo and Lynx snowmobiles flew off dealer lots in Q1. North American retail sales of BRP’s seasonal products were up in the high-twenties percent compared to the prior year’s quarter – a huge jump. This far outpaced the industry’s overall snow/seasonal segment growth (industry was up only low-teens percent), meaning BRP grabbed market share in snowmobiles. Essentially, BRP managed to sell through a lot of leftover sled inventory, helping dealers clear stock. This late-season strength “allowed [BRP] to outpace the industry and reduce network inventory” in snowmobiles.
• Off-Road Vehicles & Year-Round – Slump: On the flip side, Year-Round Products (which for BRP include Can-Am side-by-sides, ATVs, and on-road three-wheelers) saw a slowdown. North American retail sales for BRP’s year-round segment dropped in the low-teens percentage range year-over-year. The entire industry for off-road powersports has been cooling off after the recent boom, but industry-wide year-round sales were only down mid-single digits percentage-wise in Q1. That means BRP’s ~10–15% decline was steeper than the industry’s ~5% decline – a sign that BRP lost some market share in the ATV/UTV (side-by-side) segment this quarter. Softer consumer demand and a challenging macro environment are the main culprits here. Many customers rushed to buy off-road toys during the pandemic and are now pulling back, and higher interest rates and economic uncertainty aren’t helping new sales. BRP responded by “right-sizing” production and shipments to avoid flooding dealers with excess stock, which also contributed to the lower sales figures.

In summary, snowmobiles shone bright for BRP in Q1, effectively “saving the day” and balancing out weakness in year-round off-road sales. BRP’s overall North American retail was flat only because the snowmobile strength offset the ATV/SxS decline. The company noted that their strong snowmobile performance and steady overall retail indicate they are holding market share in a tough market. Still, the slowdown in side-by-sides and ATVs is a reality that BRP is navigating carefully.

Earnings and Margins in Plain English

We threw around terms like Normalized EBITDA, net income, gross profit, etc. Let’s explain what happened to BRP’s profitability in simpler terms:

• Margins Got Squeezed: BRP’s gross profit margin fell from 26% a year ago to about 21% this quarter. Think of margin like the markup on their products – it shrank because BRP had to discount more (higher “sales programs” and promos) to spur sales, and because fixed costs (like factories and overhead) were spread over fewer units. Lower sales volume = less efficiency, which hurt profitability. The company did find some cost savings in manufacturing, but not enough to fully counteract the heavy promotional environment. This margin pressure is something Polaris also experienced (as we’ll see shortly).
• Normalized vs Reported Profit: BRP’s normalized EBITDA (a proxy for core operating profit) tumbled ~35%, reflecting the tougher conditions. However, net income (bottom-line profit) skyrocketed nearly 3.8 times to C$161M. How can profit jump when sales and operating earnings fell? Two words: unusual gains. In BRP’s case, a big foreign exchange gain (from currency rate movements) and reduced losses from discontinued operations inflated the net income. Last year’s Q1 had a sizeable loss from a discontinued boat engine business, for example, which dragged profit down. This year, those losses weren’t as large, and some currency hedges swung in BRP’s favor, giving a one-time boost. So, normalized EPS (which excludes those items) was only $0.47, down from $1.58, whereas actual EPS was $2.19 vs $0.56. Bottom line: BRP’s “real” underlying earnings are down, but on paper the quarter looks very profitable due to accounting and one-off factors. As enthusiasts, we should read past the headline profit – the operating environment is actually tighter than that big net income number suggests.
• Cash Flow and Expenses: One positive note – BRP’s operating expenses were trimmed by about 9% as the company cut costs. Also, cash flow from operations improved to $214.5M (from $141.4M last year), which indicates BRP is managing inventory and receivables better and converting sales to cash efficiently. They even announced a small dividend increase, signaling confidence. These details show BRP is being financially prudent to weather the slowdown.

Strategic Moves: Trimming the Boat Business and a New Captain at the Helm

BRP isn’t just sitting back – they made some strategic moves in Q1 2026 that give insight into their focus going forward:

• Exiting Some Marine Segments: BRP announced it is selling off its boat manufacturing assets, specifically Telwater Pty Ltd and Alumacraft. Telwater (an Australian aluminum boat maker) and Alumacraft (a U.S. fishing boat brand) were part of BRP’s Marine group. On April 1, 2025, BRP struck a deal to sell Telwater, and on May 1, 2025, they closed the sale of Alumacraft’s assets. This follows BRP’s 2020 decision to stop making Evinrude outboard engines. In short, BRP is streamlining to focus on its core powersports business – off-road vehicles, snowmobiles, watercraft, and motorcycles – rather than traditional boats. They’re doubling down on what they do best (ATVs, SxS, sleds, etc.) and unloading the slower marine segments. Interestingly, Polaris is doing the opposite – Polaris acquired boat companies (Bennington pontoons, etc.) in recent years and is trying to grow its Marine segment. We’ll see how that contrast plays out in performance.
• CEO Succession Plan: Big news on the leadership front – José Boisjoli, BRP’s long-time President and CEO, is stepping down after 22 years at the helm. BRP announced that Boisjoli will retire by the end of the fiscal year after overseeing a remarkable growth journey. Under his leadership, BRP transformed from a spun-off division of Bombardier into a global powersports leader; the company’s revenue more than tripled and its market share expanded dramatically. (Fun fact: BRP says its products now make up about one-third of global powersports sales, a testament to how far they’ve come.) The Board is actively searching for a new CEO, and Boisjoli will stay on until a successor is nameds. He’ll also give up his role as Chairman. This planned transition comes at a crucial time – BRP faces near-term market headwinds, but also needs to execute on new product development (think electric vehicles, new model launches) for long-term growth. Enthusiasts will be watching to see if the new leadership continues the aggressive innovation that BRP is known for (like those Can-Am electric motorcycles teased for 2024). For now, BRP’s bench is strong – we expect a smooth handoff when the time comes.

BRP vs. Polaris Q1: How Do the Two Rivals Compare?

Now, the face-off many of us are curious about: BRP vs. Polaris in the first quarter. These two companies dominate the powersports landscape, so comparing their performance gives a sense of the industry’s state and who’s gaining ground. Here’s a side-by-side comparison in key areas:

• Revenue: BRP reported C$1.85 billion in Q1 revenue (≈US$1.37B if converted), which was down ~8% from a year ago. Polaris reported $1.54 billion (USD) in Q1 sales, a 12% drop year-over-yeart. In absolute terms, Polaris’s sales are a bit higher (roughly equivalent to ~C$2.07 billion), but both firms saw a decline after the pandemic-fueled sales frenzy cooled off. BRP’s decline was a tad less severe than Polaris’s. Polaris cited lower shipment volumes (they intentionally shipped fewer units to help dealers reduce inventory) and more promotional discounts as reasons for the drop. BRP faced similar issues (industry slowdown, dealer inventory rightsizing), but managed to limit the revenue decline to single digits.
• Retail Sales (North America): This is where BRP won this round. BRP’s North American retail unit sales were flat (0% growth) year-over-year, while Polaris’s retail sales fell ~7% for the quarter. Polaris said their North America off-road vehicle (ORV) retail was down 11% vs Q1 last year. By contrast, BRP’s off-road (year-round) retail was down in the low-teens percentage, similarly weak. The key difference is BRP’s booming snowmobile sales offset its ORV decline, whereas Polaris’s other segments didn’t fully offset ORV declines. Polaris’s total NA retail (across off-road, on-road, etc.) ended up down mid-single digits overall. In other words, BRP held its ground in retail volume while Polaris saw fewer units sold. This suggests BRP gained a bit of relative market share in total units for the quarter. Polaris even acknowledged that they “lost modest share” in the off-road segment as competitors (like BRP and others) sold through more of their older inventory. On the flip side, Polaris gained share in some areas – notably, Indian Motorcycle retail sales fell by only low-teens percent while the overall heavyweight bike market was down about 25%, meaning Indian bikes outperformed their industry (taking share from others). Polaris also said they saw market share gains in their marine segment (pontoons). BRP, however, isn’t competing in marine as of now – they’ve bowed out of boat manufacturing to refocus on powersports.
• Profit and Margins: Neither company had a banner quarter for underlying profit, but Polaris had a particularly rough ride. Polaris actually posted a net loss of $67 million for Q1, compared to a tiny $4M profit a year ago. On an adjusted basis, Polaris lost ~$51 million (or -$0.90 per share). This was largely due to sharp margin erosion – Polaris’s gross margin fell to just 16.0% (down ~3.1 percentage points from last year) as they slashed prices with heavy promotions to move inventory, and also ate some costs related to tariffs and currency. BRP, in contrast, remained profitable with that C$161M net income (about US$120M) and an adjusted EPS of $0.47 positive. BRP’s gross margin of ~21.4% is healthier than Polaris’s 16%, indicating BRP maintained a better pricing/mix or had less severe discounting this quarter. Part of this comes down to product mix: BRP sells a lot of higher-margin products (like Sea-Doo PWCs and parts & accessories), and perhaps didn’t have to discount as deeply on units as Polaris did to clear out inventory. Polaris also had some one-time charges (they started some restructuring efforts and product line wind-downs) that hit their bottom line. Both companies are keeping a close eye on costs; Polaris even trimmed operating expenses by $10M (down to $303M) in Q1, similar to BRP’s cost cuts, but it wasn’t enough to offset the gross profit shortfall.
• Market Share & Competitive Position: BRP and Polaris each hold roughly one-third of the global powersports market in terms of major product categories – together, these two are the “big two” of the industry. BRP stated that thanks to growth over the past two decades, its brands now represent about 33% of global powersports sales. Polaris, being the other big player, similarly commands on the order of one-third of the market, with leadership especially in North American ATVs and side-by-sides. This quarter’s results reflect a bit of tug-of-war in share: BRP leveraged strengths in snowmobiles (where it’s the market leader) to hold share overall, whereas Polaris’s core off-road franchise showed some vulnerability as it lost a few points of share to BRP and other competitors in ATVs/UTVs. However, Polaris gained share in niches like cruisers (Indian vs. Harley) and pontoons. Net-net, the competitive gap didn’t dramatically shift in Q1 – both companies remain very close rivals in size. Enthusiasts benefit from this rivalry, as each company is pushing hard with new product introductions and improvements to win over customers.

Polaris’s Q1 2025 overview (above) highlights similar headwinds to BRP’s: sales down 12%, retail sales down 7%, and margins under pressure from promotions. Polaris noted it deliberately cut shipments to help dealers reduce inventory, and it saw share gains in motorcycles and boats but lost some share in off-road vehicles. This context shows that BRP’s flat retail and smaller revenue drop in the same period were relatively strong results in a tough market.

To sum up the duel: BRP outperformed Polaris in Q1 on retail sales and profit, while Polaris remains the slightly bigger player in absolute revenue (especially if we convert currencies). Both were hit by the industry slowdown, but BRP’s diverse portfolio (particularly its snowmobile strength) provided a buffer that Polaris lacked this quarter. It’s worth noting that powersports demand is cyclical – last year, Polaris might have had an edge in some quarters; this time BRP had the edge. The race between the two is ongoing, and each is doubling down on different strategies (BRP focusing on core powersports, Polaris expanding into new segments like marine). It will be fascinating to watch how these choices play out in future results.

Industry Outlook – Cautious Optimism for a Rebound?

Zooming out, what do these results say about the powersports industry and what’s next? In short, the sector is in a bit of a downcycle after the pandemic-era boom. Many consumers who wanted an ATV, side-by-side, or boat already bought one in the last couple of years, so demand has cooled. High inflation and interest rates make financing a new SxS or snowmobile more expensive, which dampens impulse buys. Both BRP and Polaris acknowledged a “challenging macroeconomic environment” and soft consumer demand currently. There’s also some unusual external pressure: Polaris, for example, is dealing with tariff costs on parts, given its U.S. manufacturing footprint, which it says put it at a disadvantage vs. competitors who manufacture abroad. These factors led Polaris to withdraw its full-year 2025 sales and earnings guidance – essentially saying “the rest of the year is too uncertain to predict”. BRP likewise is holding off on giving financial forecasts for now, preferring to monitor how conditions evolve quarter by quarter.

That said, it’s not all doom and gloom. Powersports is historically a cyclical industry that eventually bounces back. Both companies are optimistic about a future rebound: BRP’s CEO highlighted that leaner inventory levels and a strong product lineup position them well when demand returns. Polaris’s CEO echoed a similar sentiment, saying the team is focused on innovation and operational efficiency to weather the storm and be ready for the recovery. Indeed, inventory at dealers has come down (Polaris noted their North America dealer inventory was 11% lower than a year ago, meaning the glut of unsold units is easing). Once manufacturers and dealers clear out the older stock (with the help of discounts like we saw this quarter), they can ramp up production of new models again without fear of oversupply.

From an enthusiast perspective, the current slowdown might actually be an opportunity – dealers are offering promotions on vehicles that a year or two ago were selling at or above MSRP. As the companies adjust to the new normal, we’re likely to see a continued stream of new model launches (electric ATVs and bikes from BRP, updated RZR and Ranger models from Polaris, etc.) aimed at enticing buyers back into showrooms. The future outlook for late 2025 into 2026 will depend on broader economic factors (interest rates, consumer confidence) as well as any cool new products that can spark excitement. If the economy stabilizes, both BRP and Polaris expect pent-up demand could bring growth back. For now, they are playing it safe – cutting costs, managing inventory, and sticking to core strengths.

In conclusion, BRP’s Q1 FY2026 results show a company holding steady in a headwind: revenue down a bit, but key segments performing well enough to keep retail flat, and proactive decisions to focus on what matters (core products and a leadership transition for the future). Polaris had a tougher quarter, but that helps put BRP’s performance in context – doing “okay” in this climate is actually an achievement. For the industry at large, it’s a period of adjustment. As riders and drivers, we can take comfort that both companies remain financially solid and committed to innovation, so when the economic skies clear, the next generation of fun machines will be ready for us. Until then, enjoy those late-season snow rides and off-road adventures – and maybe keep an eye out for those dealer deals on leftover models!

Sources

1. BRP Inc. – Q1 FY2026 Earnings Press Release (May 29, 2025) – BRP reports first quarter FY2026 financial results, including revenue of C$1,846.9M (-7.7% YoY), net income C$161.0M (+278.8% YoY), normalized EBITDA C$200.8M (-34.7%), flat North American retail sales, and other key metricsstocktitan.netstocktitan.net.
2. BRP Inc. – Q1 FY2026 Financial Highlights (Press Release) – Detailed financial table for Q1 FY2026 vs Q1 FY2025 showing revenues, gross profit (21.4% margin vs 26.1% prior), normalized EBITDA, net income, EPS, etc., as well as commentary on factors affecting results (industry slowdown, promotions, inventory reduction)stocktitan.netstocktitan.net.
3. BRP Inc. – Retail Sales Performance Commentary – Press release notes on retail sales: high-twenties% surge in seasonal (snowmobile) retail sales following late snowfall, versus a low-teens% decrease in year-round (off-road) retail, compared to mid-single-digit industry decline – indicating BRP’s market share gains in snow and some share loss in off-roadstocktitan.netstocktitan.net.
4. BRP Inc. – Strategic Moves Announcement – Company announced a definitive agreement to sell Telwater (Australian boat subsidiary) and completion of Alumacraft asset sale, as well as a CEO succession plan with longtime CEO José Boisjoli to retire by fiscal year-end after 22 years – Board is searching for a successorstocktitan.netstocktitan.net.
5. Polaris Inc. – Q1 2025 Financial Results Summary – Polaris reported Q1 2025 sales of $1,536M (–12% YoY) and an adjusted net loss (–$0.90 EPS), with gross profit margin down to 16.0%. North American sales fell 11% and international fell 16%. Polaris saw a 7% decline in overall powersports retail sales, with market share gains in motorcycles and marine, but lost share in off-road vehicles (ORV) as Polaris’ ORV retail was –11% vs industry low-single-digit declinetradingview.comtradingview.com.
6. Powersports Business – Polaris Q1 2025 Analysis – Industry trade article noting Polaris North America ORV unit retail sales down 11% in Q1, while North America ORV industry was down only low-single-digits – illustrating Polaris’s share loss in that segment. Article also mentions Polaris’s decision to withdraw full-year guidance and factors like higher promotions and tariff costs impacting resultspowersportsbusiness.compowersportsbusiness.com.