MONTREAL — Hurricane Harvey has shuttered several BRP dealers that were in the path of the storm and will likely affect sales for months to come, the recreational vehicle company (TSX:DOO) said Friday.
Thirteen Texas dealers selling mainly off-road vehicles and watercraft have been closed since the storm hit last week, with six likely suffering severe damage, says chief executive Jose Boisjoli.
As was the case following last year’s fires in northern Alberta, the sales impact could be lengthy.
“It will be a hit definitely,” he said in an interview after the company released strong second-quarter results helped by a recovery in Alberta.
“Life needs to go back to a more normal situation before people (purchase) those types of products.”
The damaged stores represent a fraction of BRP’s 900 off-road vehicle dealers in the U.S.
While these type of storms are very sad, Boisjoli said there are catastrophic events each year somewhere in the world that affect its dealers.
Stores typically remove products in advance to avoid damage.
Although it isn’t directly on the hook for any rebuilding expenses, Boisjoli said BRP would help by moving products from stores facing long closures to other dealers so the inventory doesn’t become obsolete.
Other Canadian companies with assets in the Gulf Coast area joined their American counterparts in closing offices and hunkering down to wait out the storm.
Precision Drilling (TSX:PD) and Calgary-based pipeline company Enbridge (TSX:ENB) have closed offices in Houston, while Enbridge has removed all but essential staff from its natural gas gathering and processing facilities in the Gulf of Mexico.
BRP said its revenue surged 20 per cent to $1.03 billion during the three-months ended July 31, propelling it to a $100-million profit.
Its net income amounted to 89 cents per share, compared with last year’s loss of $68.8 million or 61 cents per share.
The Quebec-based company that makes Ski-Doo snowmobiles said its normalized earnings improved to 18 cents per share from one cent per share last year.
The results were helped by the first improvement in Western Canadian sales in 18 months.
“The low oil price shock is behind us,” Boisjoli said.
“The economy overall in Canada is doing well and I think we saw the benefit in Q2.”
However, he said it’s premature to say conditions are back to normal in Alberta.
“We need to see how the thing will evolve this fall before to say we’re back to normal but it’s definitely an improving trend.”
Boisjoli said he’s also watching closely as the second round of NAFTA talks resumed Friday in Mexico.
“We’re not nervous at this point,” he said. “At the end we believe that logic will prevail between the three countries.”
Shares of BRP hit an all-time high of $43.88 in early trading on the Toronto Stock Exchange, but were down 3.4 per cent at $40.09 in later trading.