Laurentian Bank and BRP: What Investors Need to Know

Laurentian Bank reports $32 million Q2 profit as strategic plan advances

Laurentian Bank of Canada says it is making steady progress on its turnaround plan as it completes a year of implementing its strategic priorities. The bank posted a net income of $32.3 million in the second quarter, a marked improvement from a loss last year, and highlighted efforts to improve efficiency and diversify lending.

“We’ve taken meaningful steps to transform our organization and are making steady progress toward generating efficiency,” chief executive Éric Provost said on an earnings call. He added that while the bank remains in the early phases of the plan, management is satisfied with the direction and initial results.

Focused growth in specialty lending and technology investment

Laurentian has concentrated on expanding specialty commercial lending, preserving core consumer deposits and accelerating technology investments. The bank has recently introduced digital capabilities it lacked before, including a smartphone app, and is working to diversify its inventory lending beyond a heavy exposure to recreational vehicle and boating sectors.

Provost said the bank is adding clients in agriculture, construction, IT and powersports to reduce concentration risk. “This is lending into new programs, and this is what I believe is positioning us better for the future state,” he said, while also expressing confidence in legacy lending areas and their risk-return profiles.

Q2 financial details

For the quarter ending April 30, Laurentian reported earnings of $0.69 per share, compared with a loss of $2.71 per share a year earlier. Adjusted net income was $34 million, or $0.73 per share, down from $40.5 million ($0.90 per share) in the prior-year quarter. Analysts had forecast roughly $0.70 per share.

Total revenue for the quarter was $242.5 million, a slight decline from $252.6 million a year earlier. Provisions for credit losses were $16.7 million, compared with $17.9 million in the same quarter last year. While loan growth remains modest and increased technology spending is weighing on near-term earnings, analysts noted the quarter was solid on margins, expenses and credit quality.

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BRP CEO to retire after 22 years as trade and tariff uncertainty lingers

José Boisjoli, chief executive of BRP Inc., will step down after more than two decades leading the powersports manufacturer. Boisjoli transformed BRP from a struggling spin-off of Bombardier Inc. into a global brand known for Ski-Doo snowmobiles, Can-Am vehicles and personal watercraft. His retirement will take effect by the end of BRP’s fiscal year on Jan. 31, 2026, and the board is conducting a search for his successor.

A long tenure of growth and product expansion

Under Boisjoli’s leadership BRP roughly tripled revenue and expanded its market share, with the company reporting that about one in three powersports products worldwide carries the BRP brand. He oversaw the company’s 2013 IPO and significant workforce growth over the past decade.

Current challenges: tariffs and consumer uncertainty

After a pandemic-driven surge in demand for outdoor recreational products, BRP has faced headwinds as inflation and interest-rate pressures cooled some consumer spending. The company is also navigating a shifting tariff environment that has introduced uncertainty for buyers and suppliers. Boisjoli noted that tariffs can erode consumer confidence and delay purchases, which complicates demand forecasting.

BRP maintains that vehicles produced in Canada and Mexico comply with the North American trade pact, allowing many U.S. buyers to avoid steep tariffs. Still, U.S. tariffs on other countries — particularly China — are expected to reduce revenue by $60 million to $70 million this year, primarily affecting parts, accessories and apparel.

Earnings and outlook

Despite these pressures, BRP reported a strong quarter with net profit of $161 million, a 279% increase year-over-year, driven by lower operating costs and a favourable foreign exchange impact on U.S.-denominated debt. First-quarter revenue was $1.85 billion, down about 7% year-over-year as dealers and consumers moderated orders and purchases.

On a normalized basis BRP earned $0.47 per diluted share for the three months ended April 30, beating the $0.40 expectation from LSEG Data & Analytics, though well below last year’s $1.58 per diluted share. Management declined to issue a full-year financial outlook given continued tariff and demand uncertainty.

When reflecting on his tenure, Boisjoli highlighted product-line profitability gains: “We had two product lines profitable, two were not profitable, in 2003. Today we have seven profitable product lines.”

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