BRP Stock Plummets 20% on US Tariff Changes

BRP Stock Falls 20% After Suspending Guidance

BRP Inc. (TSX:DOO, NASDAQ:DOO) shares experienced a sharp 20% decline after the company announced the suspension of its fiscal 2027 guidance. The decision follows significant amendments to U.S. tariff policies that will materially increase the company's costs.

Overview of the Tariff Situation

The U.S. government revised Section 232 tariffs, effective April 6, 2026. The new policy imposes a 25% tariff on the total value of imported snowmobiles and most off-road vehicles. This replaces the previous system, which applied a 50% tariff only to the value of applicable metal content.

Impact on the Market

BRP estimates the tariff amendment will create incremental costs exceeding $500 million for the remainder of the year before any mitigation measures are implemented. The shift in calculation from metal content to total product value represents a substantial increase in the cost burden for the powersports manufacturer.

Summary

Due to the unpredictable tariff environment, BRP has withdrawn its previously issued fiscal 2027 guidance. The company's CEO, Denis Le Vot, stated that despite the material burden, the firm expects to manage the challenge with its solid balance sheet and team agility while awaiting further clarity.

FAQ

Q: Why did BRP's stock fall?
A: The stock fell 20% after BRP suspended its fiscal 2027 guidance due to changes in U.S. tariff policies that are expected to increase costs by over $500 million.

Q: What is the new U.S. tariff affecting BRP?
A: The new tariff imposes a 25% duty on the total value of imported snowmobiles and off-road vehicles, a significant change from the previous metal-content-based tariff.

Source: Investing.com