The last few years, the powersports industry has been on an absolute high. Pandemic spending on things that'd get you out into nature and out of the house was at an all-time high, which meant every business was making money hand-over-foot. It led to a striking boom, one a lot of people thought would keep going. 

But as restrictions lifted, and spending decreased as interest rates climbed, it was clear that fun-spending was coming to an end. Or, at the very least, leveling out. Yet, many companies didn't see that future and just kept chugging along, hoping the good days would never end. One of the biggest names amongst those believers is BRP, the parent company of Ski-Doo, Sea-Doo, and Can-Am

It's now, finally, coming to terms with that reality as it recently slashed its revenue forecasts for the year as spending just wasn't lining up with what it had predicted late last year. And though it has a seriously good lineup across the spectrum, that just isn't enticing buyers like it once did. 

That's not great. Both for enthusiasts like you and I, as well as BRP's employees, who are likely to feel the mounting pressure to maintain profitability. 

Ski-Doo
Get the best news, reviews, columns, and more delivered straight to your inbox.
For more information, read our
Privacy Policy and Terms of Use.

At the time of writing, BRP's stock price has fallen 4% since the company's Q2 earnings call after it cut its earnings per share projection by a whopping 54%. Revenue also took a reduction, though far less, and was adjusted to between $7.8 and $8 billion from $8.6 and $8.9 billion. That's still a helluva cut, but not nearly as bad as its earnings per share. 

Per BRP's CEO José Boisjoli, “Our results were in line with expectations and reflect our ongoing focus on reducing network inventory to maintain our dealer value proposition. We have made great strides on that front, but the retail environment is more challenging with the economic context pressuring consumer demand. As such, our priority is to continue to proactively manage production and inventory levels, which leads us to revise our year-end guidance.”

What that likely means is that the company will be reducing production across its brands to reduce the pressure on dealers sitting on new inventory. A stark contrast to a few years ago when I bought my Can-Am Maverick X3 Max. At the time, the dealership had a 6-month waiting list and $1.9 million worth of just UTVs on backorder, along with countless snowmobiles from BRP's Ski-Doo also on backorder. 

Sea-Doo RXP-X, RXT-X

Though the company is still profitable, reducing inventory by way of a reduction in production, is likely to mean that BRP will have to lay off more of its workforce. The company had already laid off over 100 people earlier this year, as last year's warmer winter caused snowmobile sales to plummet. But as interest rates remain relatively high, and dealerships offer bigger and bigger discounts to move new inventory, all while investors and board members see their dividends shrink, the most often casualties are the workers themselves. 

There's also the US election of it all. 

The United States is BRP's biggest market by a large margin. And when the US has an election year, folks tend to stop spending as hard as they do on non election years due to the uncertainty of it all. Interest rates, gas prices, and countless other variables are in flux, so people tend to stop spending how they'd normally spend their discretionary income. And this year's is certainly...chaotic. So it's not hard to see why most Americans would put spending their hard-earned cash on fun vehicles. 

That said, there's reason to be optimistic as the company has been on an absolute roll with introducing better and better products. Between the brands' snowmobiles, UTVs, ATVs, and jet skis, there's not a bad one in the bunch. The only potential oddity is Can-Am's forthcoming electric motorcycles, which just don't have enough range. But we'll be testing those very soon, so maybe it won't be doom and gloom. 

Fingers crossed.

Got a tip for us? Email: tips@rideapart.com