BRP Inc (NASDAQ: DOOO) stock rose over 4.8% on 26th March, 2021 (as of 10:20:56 UTC-4 · USD; Source: Google finance) after the company posted better than expected results for the fourth quarter of FY 21.
The normalized gross profit margin ended at 27.8%, which representing a 410-basis point expansion driven by higher volume and richer mix of products sold and a favorable impact from pricing and sales programs, which were partly offset by unfavorable foreign exchange rate variations. The normalized EBITDA ended the fourth quarter up 41% to reach CAD313 million. This resulted in a very strong free cash flow generation of CAD198 million for the fourth quarter, bringing the total to CAD674 million for the year.
DOOO in the fourth quarter of FY 21 has reported the adjusted earnings per share of $1.40, beating the analysts’ estimates for the adjusted earnings per share of $1.26, according to the Zacks Consensus Estimate. The company had reported the adjusted revenue growth of 12 percent to $1.39 billion in the fourth quarter of FY 21, beating the analysts’ estimates for revenue by 3.80%. For powersports part, accessories, and apparel and OEM engine, the revenue were up 19% driven by a higher volume of PA&A coming from a higher replacement parts revenue due to increased usage of products and strong unit retail that generated a lot of accessories sales.
For fiscal 2022, the company expects capex to be between CAD575 million and CAD600 million. The company expects to generate positive free cash flow for the year. The company announced to increase the quarterly dividend by 18% to CAD0.13. The company expects EBITDA guidance to grow in the range 22% to 30% for the year and EPS growth to be in the range of 35% to 48%, resulting in a range of CAD7.25 to CAD8.00.
In fiscal year ’22, the company will be focusing on several important investments that will drive growth in fiscal year ’23 and beyond. The company is working on electrifying all the product lines by the end of 2026 and are accelerating the investment in R&D. The company is planning for a strong year of product introduction and building a third side-by-side facility in Juarez. The company is also investing in the boat brand as part of the marine strategy with Project M and Project Ghost.
Meanwhile, in North America, the company is off-season, but the booking for the season ’21 is completed and the company will be running at maximum production capacity until the end of July.