BRP Inc. President and CEO José Boisjoli joins Yahoo Finance Live to discuss the company’s latest earnings report and break down what sales look like ahead of the holiday shopping season.
AKIKO FUJITA: A surge in outdoor recreation activity helping drive gains for Canadian recreational products manufacturer BRP. The company topped expectations in its most recent quarter. Revenue was up roughly 2% year on year while profit gained about 10%.
Let's bring in José Boisjoli. He is the president and CEO of BRP. It's great to talk to you today. Certainly a lot of people thinking about those outdoor activities as they go into the extended holiday weekend. You saw a huge surge in the second quarter as well, especially during the summer months. How much of that momentum have you seen carry through into the colder months?
JOSE BOISJOLI: You know, the surge continue. You know, in Q3, we had new entrants. Typically, we have about 20% of new entrants coming into our industry. And in Q3, we have 34%, which is 70% more. But what is very interesting, everything is up. The usage of the product, the park and accessory sales is up. Then for us, it's something we never hoped for, but we are very happy with the momentum we're having now.
AKIKO FUJITA: And how are things shaping up as you go into the holiday season? We've heard a number of companies talk about sort of supply chain hiccups, especially those that have seen a big demand. What have you had to adjust in order to meet the demand?
JOSE BOISJOLI: Obviously, in this whole world situation, there is some hiccup. We have to airfreight. We have to change our schedule. But the team is very agile to adapt to the situation. And in Q3, we didn't have severe interruption of production. And we were able to deliver on plan. And that's what the planning going forward. If the confine-- if there is no material confinement, we believe it's manageable.
AKIKO FUJITA: You've got a pretty good overview, good insight into where things stand from a macro level at a time when there's a lot of concern that the uptick in these infections, infection rates are likely to slow the economic recovery. From where you stand, how do you see that recovery bouncing back?
JOSE BOISJOLI: The way we see things, you know, now vaccines are coming. And they are there. And we believe that it will take a while before the vaccine is distributed. And many experts believe that, you know, leisure industry will take a while to bounce back. And for us, you know, we had the momentum of about 15% growth pre-COVID. And we had that surge of new customer with the staycation phenomenon, then this is something that is a big plus for us. And now our goal, our challenge, is to make those customers have lifetime customer. And we see that as a big opportunity going forward.
AKIKO FUJITA: And José, you know, one of the concerns that you faced especially during the Trump administration was, as a company, trying to navigate some of these trade concerns. I know even before and after 2.0, you would initially consider potentially moving the plant from Mexico.
As you look to this new administration in Washington, how are you looking at that risk? You know, I'm curious as a CEO who has had to navigate sort of these concerns coming from the administration, what do you see in terms of growth opportunities and then in terms of trade?
JOSE BOISJOLI: Yeah, but for sure, for-- we have a deal, and we're selling in 127 countries. Then we're having 12 factories in six countries. And we always find ways to adapt to new regulation. But for us, the NAFTA 2.0 was the most-- I mean, the biggest-- the one that had the biggest impact on our business. But now, it's settled. It's in fourth. It's going well. And we believe the new administration will not change that. Then going forward, there is always some adjustment, but we feel that it will be more stable than what we had to go through in the last two years.
AKIKO FUJITA: José Boisjoli, the president and CEO of BRP. It's good to talk to you.
JOSE BOISJOLI: Thank you.