Q1 2022 BRP Inc Earnings Call
Okay.
Yeah.
Yes.
And for your Passcode then press the.
Yes.
Pounds.
And so on hold until the conference begins.
Yes.
Yes.
Okay.
Yeah.
Yes.
Again, the the tone.
Yes.
Tony.
And we see.
Okay.
And for me followed by your organization then press the pound key.
The.
Keith.
Yeah.
And David D. A V of I D. Brown B R. R O W not from IRA and I E on a.
But.
Our normalized EBITDA was.
It's up for.
For the 375 million.
Yes.
And our normalized earnings per share reached $2.53.
That's the only where our financial results solid, but consumer demand remains very strong and the quarter as you can see on slide 5 glue.
Globally, our retail grew in all key region, while continuing to outpace the industry.
In North America are part of sport retail growth accelerated from the fourth quarter up 39% of 49% when excluding snowmobile.
We also had the strong performance and international markets with retail up, 9% and Latin America, 32% and EMEA and 83% in Asia Pacific.
Byproduct line, we grew across all of our line up except snowmobile as our dealer ran out of the unit at the end of the season.
For our side by side growth was the mother at more moderate.
As it has also suffered from limited product availability.
Due to low inventory.
And we'll provide more color of by product.
At the end of the season.
Line turning to slide.
The growth was the mud.
6 of strong demand in the first quarter.
And it has also suffered.
Order of retail growth.
For.
Growth to be limited in the second and third quarters.
The low end of <unk>.
Orders due to the ongoing supply chain cost.
To reflect.
<unk> are evolving very rapidly.
Line turning to slide.
When we last update you and late <unk>.
6 of men in the.
March challenges was the logistic congestion at different ports.
The first stood in the second and.
<unk> successful at the addressing these issue.
The supply chain.
Issue alternative.
And considering very of ethylene.
<unk> logistic are predictable and manageable.
The March 1 of our key challenges.
<unk> are managing.
<unk> mystic congestion.
<unk> liability and delivery of daily for search and raw.
<unk> dressing these.
<unk> use case, we are working with our supplier to find subsidy.
The issue.
Our new source of supply.
The full and manageable.
<unk> thing some daily.
<unk> currently we are many of.
And remained chat.
<unk>.
And the BT and delivery.
And with the shortage of semiconductors.
Every in this case, we are working with our supplier to.
Some of.
Of our tier 2 suppliers.
<unk>.
Signs of supply.
<unk> or we have.
Fly creating.
And some daily.
Yes. This is presented.
Last.
Italy source.
The challenge.
Source of.
<unk> has been dealing with the short.
And finding alternative parts would require.
Is that affecting some of our tier 1 but also some of.
<unk>.
Of our 2.
Some of our unit will need to.
The supply.
To be defeated.
Lastly thing.
Does this mean the unit is missing a few components.
Of disrupt.
And then move to final Assembly.
The <unk> because of finding alternative parts would required.
<unk> situation will delay the timing of certain deliveries.
Card.
<unk> and temporarily increase.
You need to.
<unk> <unk>.
To beat the dead.
This means the unit is missing a few components.
As to deliver all orders by the end of our fourth quarter.
And our receipt.
<unk> our plants are running at full capacity.
The timing of certain deliveries.
The access of increasing production capacity at you on ice and <unk>.
<unk>, regardless of these challenges our objective is to deliver all orders by the end of our fourth quarter.
To deliver our products.
And <unk> are running at full capacity.
Actions take note that all of.
At the <unk>.
This briefing our cash.
<unk> production capacity at you on ice and <unk>.
<unk> has been factor into our guidance.
We plan to work through these issue for the balance of the year.
<unk> given those challenges.
Year productions.
The fact the impact on product.
And so that all of.
<unk> will remain low throughout the.
This year.
The year to better illustrate the situation we have provided statistic from the past few.
To slide 7.
Year and fiscal year 2018.
The challenges.
<unk> and 'twenty.
<unk> the impact on production.
<unk> breadth of debt our level of inventory and our dealer network.
<unk> the.
Work wasn't.
The year to better illustrate the situation.
Zinc 75.
<unk> this statistic.
During those year, our retail was growing low double.
The team 19 and 20.
Digital.
<unk> you can observe on the graph debt our level of inventory and our dealer network wasn't the sink.
1 day.
Zinc sales at about 175.
<unk> quarter of fiscal year 'twenty.
For our retail was growing.
2 of 40.
<unk> digits.
And with the continued strong demand.
And we.
The surge in the.
This level of inventories for the reminder of the year.
<unk> and <unk> dropped.
Year.
We're up 80 days.
Our sales growth.
And the first quarter of fiscal year 'twenty.
Growth.
2 dropped as low.
<unk> punishment will take place and fiscal year 'twenty.
As strong demand we expect.
On the 3 things to slide.
PEC level of inventories for the reminder of the year.
8 for demand across.
Year.
Cross our product.
Our sales growth.
Line, new and trends continue to enter the industry.
Net inventory replenishment will take place.
St.
<unk> and fiscal year 'twenty.
Free quarter compare to about 20% is <unk>.
3 we continue to experience.
Good news for the industry.
<unk>.
Free doesn't seems.
Seems to be driven only by the impact from depends.
And third the.
According to our survey.
337%.
<unk> and <unk> said the PERC.
Of.
<unk> our sports vehicle.
And about 20%.
<unk> distraction and fact.
Is this good news for the industry.
And more diverse.
<unk> to be driven only by the impact from the pending.
Group and <unk>.
According to our survey.
<unk>.
<unk>, 7% of new entrants said the PERC.
<unk>, 2% of buyer are making a tradeoff.
<unk>.
The when purchasing of unit.
Section new entrant.
Trends are a more diverse.
Great 2 hour and general belief.
Google and more women.
Belief of buyers declare the will have purchase of unit.
And then according to our survey.
82% of buyer are making.
And still positive sign.
And when purchasing of unit.
Line from her interest.
Unit veterinary.
This is the fourth consecutive quarter of double digit.
The 3% of buyers declare the will have purchase of units.
Growth are up over 60% compared to last year for all of our <unk>.
Net multiple positive.
<unk> strong demand for our <unk>.
Line, which.
<unk> record snowmobiles.
<unk> fourth consecutive quarter of double digit growth.
The start of the personal watercraft season and over a decade.
Growth are up over 60% compared to last year for all of our brand.
Kate are trending above our.
Brand and demand for products.
Target. These are all positive trends for the mid to long term growth of our <unk>.
<unk> and just start of the personal watercraft season in over a decade.
The street products.
Kate and our 3 wheeled vehicle the rider indication program registration are trending above our.
<unk>, mainly driven by a higher volte.
Target all positive trends for the mid to long term.
<unk> of side by side vehicle.
Growth.
And.
Let's turn to slide 9 for year round.
The retail.
Product revenue were up 44%.
<unk> and 'twenty.
$23 million.
The 1 side the industry is.
And by a higher volume.
Up.
<unk> lower sales program.
Side by side vehicle is.
Graham by site via.
Up.
Michael.
As we were impacted.
And vehicle season.
<unk> product availability.
And I believe.
And.
And 10 months into season 'twenty.
Our retail performance and international market.
The 1.
And as we deliver more units.
While our can am side by side vehicle is.
Retail performance was up high single digit in the EMEA.
The limited.
Mid teen percent in Asia.
This is also impacting our retail performance and international Mark.
The consumer demand for our <unk>.
To North America.
And upward to ramping up production.
<unk> retail performance was up high single digit in EMEA.
And to come online at the end of the third.
The specifics.
Turning to <unk>.
Tim.
TV the North American industry is also 7.
And then for our lineup.
Months and.
The nuts, and we look forward to ramping up production.
And 1.3%.
<unk> expect.
<unk> is performing in line with the industry.
I'm on line at the end of the third quarter.
And over the same per.
And do we TV.
For both ATV and side by side.
And also 7.
<unk> and network inventory is that Easter.
The months up in the low 30%.
Looking at <unk>.
<unk> is performing in line with the <unk>.
Nickel into season 'twenty.
Sweet blow through the <unk>.
And 1 and 3 wheel industry retail is.
Both ATV and side by side.
And can am 3 wheeled vehicle is off to a very strong start.
And sorry.
Start it is the fastest growing brands and the motorcycle industry so far.
Flow now 6 months into season 'twenty.
Far over 140.
And 1 industry retail is.
$40 very happy.
Is up.
The momentum we have with <unk>.
The central is off to a very strong start.
For a positive.
Start it is the fastest growing brands and the motorcycle industry so far.
<unk> trend.
Far.
The expectation.
<unk> retail up over 140.
<unk> for 50% versus.
40 per 3 happy.
<unk> will target.
B the film we have with 3 wheel vehicle.
<unk> for the assistant and the ability.
The trend is very positive.
The and.
The rider Education program registration.
And more diverse consumer base.
<unk>.
Base sorry.
And distribution up over 50%.
Sorry, and.
Up 160.
<unk>.
6.
And again, which bode well for the assistant and the ability.
The consumer day.
And and trend up 180 per.
And due to a correct of younger and more diverse consumer base.
Percent brick site.
Base sorry.
For the 3 wheeled vehicle business.
Sorry to women.
<unk>.
Up to 6%.
<unk> turning to seasonal product on slide.
The 90 <unk>.
10 is the low product revenue were.
<unk> 180 person.
Up 4%.
Percent these are exceptional results.
<unk> dollars.
Break sites.
No.
The <unk>.
Really fair Shipman.
Look vehicle busy.
And then for.
<unk> appear from rising.
The mix and lower sales program.
Rising to seasonal product on slide.
<unk> of personal watercraft REIT.
Tim you were up.
Retail only 6.
Up 44 person.
Months, he can season 'twenty.
<unk> million dollars.
1 detail is.
Up the low 70%.
And Richard.
Debt is.
It makes the <unk>.
Is up.
And Laura.
Sales for Graham.
Outpacing the industry.
At the personal watercraft retail.
Street, and all of the industry segment.
Retail.
<unk> and which we can.
And so you can season 'twenty.
Pete is also very good in the international market.
1 for <unk> 70 per.
So the up over 110% and EMEA.
<unk>.
130% in Australia, and New Zealand.
Good.
Ellen and up over 30% and Brazil.
The industry.
This year.
<unk>.
Are the strongest start of the retail of CS.
Pete Good and international markets.
And in over 20.
Over 110% and EMEA.
The years strong start.
E, 30% in Australia, and New Zealand.
Start tighter.
And over 30% and Brazil.
<unk>, we expect.
Tier.
<unk>.
Here, the strongest start of the retail of CS.
And <unk>.
And we have experienced.
<unk>.
<unk> and over 20.
The 2 strong ship.
The years.
<unk> and.
Its strong start unit availability.
And next for snowmobile.
The getting tighter.
Mobile the North American snowmobile industry.
Third we expect.
And he is in 'twenty.
The 1 with retail.
The very low level of inventory again this.
Up was also.
High teen percentage.
Year.
Here in the.
Per.
And next year.
And ended the season with the number 1 market position in every industry segment.
Sure.
<unk> and which.
The season 'twenty, 1 with retail.
Its market share in this.
Sorry.
Up.
Our momentum.
<unk> was also very good.
Up 18%.
And such.
<unk> for the same per.
Up low 20%.
With the number 1 market position in every industry segment and which.
<unk> ahead of our snowmobile busy.
Which its highest market share in this.
And this season 'twenty 2.
Terrific momentum.
We have a very strong lineup.
Some of you and the rest.
And up and with the introduction of the <unk> brand in North America.
Sure.
And the return of and the all time favorite the Skidoo magazine.
Our snowmobile business.
<unk> and 'twenty, 1 with record low network inventory.
As we have a very strong line.
And for our.
And up and leave with the introduction of the <unk> brand in North America, and the return of and the all time favorite.
Official Mam.
Average.
The <unk>.
We ended the season in 'twenty, 1 with record low network inventory.
<unk> for the upcoming season.
<unk> sold to consumer are.
And exceptional.
The 7%.
And I will hit orders.
<unk>.
<unk> represent roughly 70% of the upcoming season.
<unk> only available.
<unk> of 35% is.
It will allow us to better for.
Average fleet.
And for the upcoming <unk>.
<unk> tumor and Trs for part of sport product.
Season.
<unk> and snowmobile.
The orders.
And.
<unk> represent roughly 70% of the upcoming season volume.
Our support part accessories and apparel.
<unk>.
Oral and the OEM engine, which experienced a similar trend.
And a strong consumer interest for part of sport product.
And 1% for $300 million driven.
Driven by higher volume of replacement.
<unk>.
Due to increased.
Of the parts accessories and apparel.
And with strong unit.
Errol, which experienced a similar trend.
Dale these accessories sales across all of our product.
As a percentage of the 300 million.
Line that will link.
And by higher volume of replacement parts.
Link is driving demand.
And and paying.
And.
Combined.
<unk> supply chain challenges.
And Dale.
<unk> that also affected.
The increase accessories.
The exceptional result.
Sales of.
Resolved now.
Now looking at the Marine on Slide 13.
Line for systemic <unk>.
<unk>, 7%.
The G <unk>.
$22 million.
And despite supply chain challenge.
The more than offset the impact.
<unk>.
And back to the wind down of the even route onboard.
The <unk> result.
And Jim looking at our different brands.
On slide 13.
<unk> performance for the quarter.
<unk> were up 11.
<unk> over 80%.
<unk> $2 million.
And over 60%.
And then more than offset the impact of the wind down.
<unk> is about.
And for the Onboarding.
The 40%.
And Jim looking at our different brands.
Piece with the performance of our boat brand.
<unk> quarter.
<unk> and are on track for the introduction of new products with the goal.
Order over 60%.
And Jim I will turn the call over to Sebastien.
Sam.
<unk>.
Wow.
The interest rose.
And it's about.
<unk> and <unk>.
<unk> revenue reached a record level.
All in all we are pleased with the performance of our both brands.
Level of 7%.
And on track for the introduction of new products.
The profit margin also reached a record level.
I will turn the call over to <unk>.
<unk> of tier of our gross profit margin mainly benefit.
<unk>.
Fitted for sales.
The 1 reached a record low.
Graham.
Level the first quarter.
<unk>.
Quarter of $1.8 billion.
And for margins suffered from the temporary production shut.
And here.
And then there's also benefited.
So reach a record level.
And the business and our continued focus.
<unk> <unk> of our gross profit margin, mainly benefited from lower sales programs.
<unk> for our expectations for the quarter.
Graham.
<unk> profit margin was better than.
Option suffered from the temporary production shut.
The resulting from the stronger than anticipated P&A sales.
Engine business.
Sales and lower than planned sales programs.
Introducing <unk>.
Graham retail demand.
<unk>.
<unk> and faster than anticipated.
<unk> and to returns.
Patients for gross profit margin was better than expected.
<unk>.
The driven by.
And I expected operating expenses.
By resulting from the stronger than anticipate.
In terms of normalized EBITDA.
<unk> lower than planned sales programs.
The million.
<unk> of the retail demand.
So I wanted.
The faster than anticipated.
<unk> per share.
<unk>.
Share $2.53.
Turns on gross profit generation.
<unk>.
<unk> for the unexpected operating.
Weighted.
Cash from operations in the quarter.
And <unk>.
<unk> and invested.
The EBITDA.
The $53 million on working cap.
The.
And notably for inventory.
And.
Tori.
So the normalized diluted earnings per share.
And process inventory.
Sure.
<unk> via.
We generated.
Work in process inventory.
<unk> million dollars.
Cash from operations and the quarter.
Sorry.
<unk> invested.
And <unk> by chain constraint environment.
And on working cap.
<unk> you.
And notably for inventory.
The units missing components come.
Our work in process inventory.
And $97 million and Capex.
This higher work in process inventory.
<unk> million dollars to our shareholders.
Tori and of our operations.
<unk>.
<unk> supply chain constraint environment.
<unk> sales.
<unk> and allows us to ship.
<unk>.
Units of <unk> quicker when the missing components come.
And look of the key drivers of our normalized net income growth for the <unk>.
Come in and returned $288 million to our shareholders.
Quarter of $199 million from last year's first quarter.
<unk> <unk>.
<unk> and by.
<unk>.
By positive impact of <unk>.
Of course, turning to slide 6.
<unk> sales program.
6.
<unk> $388 million.
The net income grew.
Partly offset by negative impacts.
Growth can see from the chart.
<unk> and depreciation.
Chart grew $199 million from last year's fourth quarter.
<unk> ex for $70 million.
<unk> a positive impact of volume.
For a long term.
<unk> and sales programs.
Growth <unk> taxes.
Graham and $88 million.
<unk>.
And it was partly offset by negative.
$22 million of normalized net income for the <unk>.
<unk> $30 million.
<unk> was stronger than we had anticipated.
For <unk> 70 million.
Weighted nude strong demand.
And.
And for sales programs and very strong.
The thing from realized tax.
Tax expense for $89 million.
On page 17 for network inventory.
And dollars of normalized net income for the quarter.
<unk> strong retail growth we.
And then we had anticipated.
<unk>.
Weighted driven by the continued strong demand.
Inventory.
And those program.
<unk>.
Graham and his strong.
<unk> historic low level being down 73%.
<unk> 17 for a look at network inventory.
<unk> combined with our finished good inventory represents a decline of over 1.
Laurie.
$6 million and inventory value.
For American power sport dealer inventories.
Despite increasing shipments in recent quarters.
<unk> low level being.
We're seeing significant inventory.
<unk>.
Line decline.
Combined with our finished good inventory represents a decline of over 1.
Klein for Ken and brand is higher than ever.
6 compared to last year.
Ever us being retailed.
And using shipments in recent quarters.
Barry.
<unk> all of our product lines are seeing.
On the season.
<unk> inventories.
Season hurdle.
Your line decline.
<unk> of inventory.
Line.
<unk> and of Q.
Inventory is down about 80%.
1 versus last.
And and brand is higher than ever.
Yes.
Ever everything we.
Pwc and 3 wheel are off to a very.
Chip.
Strong the season with consumers purchasing the units.
Bill, hoping and a record low.
Units.
The level of inventory.
For inventories are down 64 and 54%.
<unk> last.
<unk>.
And for our summer products.
Inventory are limiting our ability to grow retail and the short term.
<unk>.
Term of the demand for our lineups remains very strong and we expect to resume market share gains.
Strong network of inventories are down.
<unk>.
<unk> 64, and 54 per.
And the network starting later.
Percentage levels of inventory are limiting our ability to grow retail and the short term.
And this is for the.
Term demand for our lineups remains very strong and we've seen.
The year for and guidance driven.
Spec.
By the stronger than expected first quarter results, notably for our P&A.
And this improves and the networks.
And the very strong spring units booking for snowmobile.
Turning to slide 18 for an update on the guidance for.
Bill of the year.
The year is though as I mentioned and we are reviewing upward our yearend guidance.
Year.
<unk> and buy.
And we also expect that we will continue dealing with supply chain constraints.
<unk>.
<unk> likely going to lead to delays and the reception of components.
For snowmobile.
<unk>.
Bill.
<unk> lead to delay.
<unk> sales programs throughout the year.
And based on the visibility we have today.
Or is the inventory position.
Date of chain challenges will impact the timing of product deliveries in Q2 and Q3.
<unk> likely going to lead the delays and the reception of components.
3 we have included additional costs and maintain a widened and usual guidance range to account for the potential impact.
We believe that the supply chain challenges will impact the timing of product deliveries in Q2 and Q3.
Following these adjustments and we now expect our total company revenue to grow.
3 of included additional cost.
Costs maintain of widened and usual guidance range to account for the potential.
And.
Fact of the supply chain constraints.
The 2 and beta.
For the price.
<unk> 75 and 850.
Price of these.
<unk>.
<unk> expect our total company revenue to grow beats.
Growth.
<unk>, 28% and 33%.
The year slide 19 for some additional color on the quarterly outlook.
The 5% and our normalized EPS.
Look the EPS.
Yes.
Yes.
Queen and the 75.
And supply chain constraint.
<unk> representing a growth.
<unk> second and.
Growth.
Third.
For the fee per.
And for pushing more volume and the fourth.
And now looking at slide 19 for some additional color on the quarterly outlook.
<unk> <unk> growth in Q.
Look the terms of normalized EPS.
In Q3.
We.
<unk> strong growth.
Jean constraints to weigh more on the second and.
Growth North American power sport retail.
Third quarter volume and the.
Dale.
Fourth quarter.
Our low level of network inventory.
And <unk> to generate a modest normalized EPS growth.
Tori.
Growth.
And the fact that we will be lapping very strong quarters last year.
And 2.
Year should lead to retail sales decline in Q2 and true.
Growth, Eric and power sport REIT.
3 and Q4.
<unk> and.
For we benefit from improved unit deliveries.
And.
<unk> and additional production and capacity, notably for side by side.
And the fact that we will be lapping very strong quarters last year.
Good day.
Here should lead to retail sales decline in Q2 and true.
Air and somewhere between flat.
3 and Q4.
Single digit.
For the fit from improved unit delivery.
Digit strong.
Murray's additional production and capacity, notably for side by side with the wire has true facility.
Risks and CUSIP asking.
Some of it.
Conclude.
Perfect, our North American power sport retail to and somewhere between flat.
And <unk> Mentum continue.
Youll digits.
New fiscal 'twenty.
Digit because of regenerating the straw.
And to bring and excellent job managing the ongoing strong demand for our product.
The risk to shortly.
Facilities running at full capacity.
Jose.
To conclude.
Despite the supply chain.
The 21 was an exceptional year and the momentum.
The issue.
And you into fiscal 'twenty 2.
We are well positioned.
And on job managing the ongoing strong demand for our products.
<unk>.
All of our facilities running at full capacity.
For in addition.
Despite the supply chain.
And to position the ERP for the fuel.
The issue for them.
<unk> by driving different project.
And sales program.
Project will generate long term growth.
Growth trends.
<unk> to deliver.
<unk> and custom.
Over the guidance for.
<unk> and new market shaping product introduction.
For the year, we are continuing.
Actual events age of additional production capacity.
Inc to being different.
The bulk of USA.
Project and the right long term.
<unk>.
Growth clothing, turning new entrants.
And.
And a lifelong.
And on our bolt on investment in electric.
Loan market shaping product introduction.
And thank all our employees.
<unk> phase of additional production capacity.
<unk> of our Covid safety protocols.
The phase.
Call for working longer hours.
<unk> III.
<unk> sold and production.
For them.
<unk> and administrative function.
The bold invest.
And I would also like to thank our supply.
And then I'd like to thank.
Here and I'll work to meet our orders.
Thanks <unk>.
And our dealers for their patient.
2 the safety protocol.
<unk>, Inc consumer.
Call longer hours, both and production.
<unk> I would like to 10 of them all for their at GDP.
And the likes of.
And the.
Thanks.
And these unusual.
And for <unk> to meet our orders.
Tiny note I will turn the call over.
Orders patients.
<unk> to the operator for questions.
<unk> consumer on the <unk>.
Thank you ladies and gentlemen at this time, if you would like to ask a question.
And they're at GDP.
<unk> Star and the number 1 on your telephone Keith.
The time.
Pat if you would like to withdraw your question. Please press the pound key.
For the operator for <unk>.
And Paul the Q&A roster.
Question and thank you, ladies and gentlemen at this time, if you would like to ask a question.
Sure.
The press star and the number 1 on your telephone keypad.
Your line is old.
Pat withdraw your question please press the pound.
And I wanted to.
Just a moment to compile the Q&A roster.
Are you asking for related to dealer restocking and 1 is I wonder if you can.
Your first question comes from the line of Robin Farley with UBS.
And can help.
Your line is.
3 events.
And.
And just seeing that maybe inventory.
On.
And we'll get back all the way too.
100.
2 things really.
Yeah.
Revenue.
The.
All of.
Okay.
On.
Yes.
The economy.
And that is.
On the bank.
And I Wonder if you could.
And so.
And how quantify the restocking opportunity, which I realize.
And so.
And this kind.
Yes.
The 23.
Sure.
The event.
<unk>.
And I'm just thinking.
That maybe inventory Wouldnt get back all the way to 175.
And <unk>.
And with.
Dave.
Sure.
And if you can help us quantify.
And that and then also.
And Joe.
And we had heard from from Taylor said.
And some production with the limited by the availability of engines that where there is some.
And I shared engine capacity between snow and and and.
And so just I wonder if you could kind of address whether.
And do that as the limiting and.
And whether that will limit your production or your side by side offer of production. Later. This year is there of kind of a tradeoff that you have to make there because of the biotech engine capacity.
Thanks.
Good morning, Robin and I will take the first part of and I think <unk> is going to take the second part.
In terms of our replenishment opportunity obviously as you said, we were historically, where we're running with the 170 days of inventory.
Of our guests is that the industry will be running lower but obviously as the industry growth as we gain market share.
And it kind of happened.
And <unk> dollars.
And Youre, probably looking at an opportunity and of restocking and the range of.
And well above a $1 billion.
So obviously it is quite sizable.
And.
And as Joe was the alluded to on the prepared remarks, we believe that debt restocking is going to happen next year.
The muted.
Year of continued demand for the products and the low levels of inventory rehab.
Between product line.
Now for your second question about.
And the situation.
The <unk>.
Dealer are right in the sense of that we have limited capacity of engine component.
<unk>.
And we are trying to manage.
And try to maximize.
<unk> product line to better up <unk>.
It's bound to the day men and does depend a lot on decision on the ability of the <unk>.
<unk> non going discussion we're having.
Product now snowmobile.
And our.
Mobile to dish.
Livery and consumer.
Uh huh.
And the suppliers try to maximize of what we can.
<unk> and its the best we.
And do respond to the day men and does depend a lot on decision on the ability of the product.
Can and Genco.
For adult need now snowmobile.
And we'll start to deliver it to consumer and.
October then this is what we're trying to manage the best we can.
And as Cameron Derksen with National Bank financial.
Can the challenges on the.
The engine.
Good morning, just wanted to.
Okay.
I guess the pins on the on the retail.
And.
Okay.
I think sort of you said that your expectation.
Next question comes from the line of Cameron Derksen with National Bank financial.
For the I just wanted.
And.
On a number and.
Okay.
In addition to that is there any way you can sort.
And just wanted to.
Sort of what your expectation is for retail this year versus.
I guess.
Obviously last year was a bit of a bit of an anomaly.
The full year.
Normally.
The retail was was flat to up high single digits, just wanted to confirm that number and.
And so flat to up high single digit.
Idea of what your expectation is for retail this year versus.
Jeff.
As you go obviously last year was a bit of a bit of an anomaly.
And our retail there were some pull forward from.
Emily.
And you correctly quoted.
Personal watercraft and 3 wheel.
And my who up high single digit.
Chip.
If I look at the second quarter.
The retail and will vary on a cash.
Sort of by quarter of this quarter, we had very strong retail and where some pull forward from.
From.
From from Q2 for personal watercraft and 3 wheel.
<unk> being a very strong quarter.
And look at the second quarter.
<unk> I won't be down.
And when I compare the 2 years ago, I believe the second quarter should be flat and retail and compared to 2 years.
<unk>.
And so obviously 2 years ago was a strong quarter continued strong demand, but obviously, we will be lapping a very strong quarter compared to last year and thats why we won't be down.
Kind of the there'll be on the high.
High teens total of.
Okay and do you have any I guess the number for kind of the full year I mean, I think debt.
<unk>, that's excellent and.
Yes.
And just wanted to follow the question on the on the 3 wheel market because youre doing obviously very very well. They are ahead of ahead of plan.
For the full year youll be and the high.
The high teens total of 2.
Land and retail demand between.
The cider and ryker or is it really broad based of.
<unk>.
And that's excellent and.
Cost.
And just wanted to follow the question on the on the 3 wheel market because youre doing obviously very very well. They are ahead of ahead of plan.
The sale base of because.
Maybe talk about the difference in Vegas, and retail demand between Spider and ryker or is it really broad based across the entire of product.
Of the people do the rider education program.
So for sure the ryker is attracting a younger customer base of because of the price point.
Graham customer.
But I would say debt all of the program, we put together and you know the.
For the woman on the road.
And the program where.
We know what the.
The variety of indication program.
And.
And we have many right.
And because of price point.
<unk> also many of <unk>.
Point number of customer base, but I would say the momentum on the <unk>.
And on.
And we'll be models and we're very very.
The road.
For the.
Okay.
It's affecting all of the models then.
Okay.
Ryker because of price point.
Craig Kennison with Baird.
And <unk> customer base, but that will sit and the momentum on 3 wheel and.
The 3 models.
Baird.
And we're very very.
Allocation what are you doing to.
IP.
Yes fairly allocate.
<unk>.
Kate inventory across your dealer net.
Craig Kennison with Baird. Your line is open.
Network.
Good morning, Craig we don't.
And my question.
We don't.
And really on allocation.
This is the other we try to be had.
And I guess fairly allocate.
Has to everyone.
Kate to your dealer network.
Short term you could do.
February is them, but we don't do that because.
Work on.
It's not helping.
All the old favor 1 dealer versus the other we try to be had.
So it will be.
Equitable to everyone.
Buying as much as we can to allocate obviously by countries and after debt by region and after.
It's not helping.
But we're trying to be a very fair.
And the mid to long term will be.
Sure.
Impacted by this debt.
The week.
And trying as much as we can to allocate obviously by countries and after debt by region and after.
And the order management system and that is I would say and objective model where.
Between all of the dealer net.
So on order, but the orders are also correlated to what their market share targets.
Work for our dealer value proposition and what are the key elements of our oil.
Sorry.
Oma's system of the order management system and that is I would say the objective model where.
And really to.
The dealer of places an order, but the orders are also correlated to what their market share targets are.
Is there anything DRP can do to.
And sure that everyone's treated fairly.
And it helps liquidity.
Your line.
<unk>.
To help your dealers.
Systems are in place.
And there is helping in each region.
Either trade, the new inventory or even used inventory among themselves.
And dealer, where the typically trade between themselves.
And gets better liquidity.
But that being said.
And I hope your dealers help themselves.
There was definitely less trade.
<unk> the dealer has.
Trade dealer want to hold.
As the network.
<unk> per unit.
For the other dealer, where the typically trade between themselves.
But that being said and the last 12 months. There was there was definitely less true.
Great and then what for.
And with Desjardin capital markets. Your line is open.
<unk> to every unit.
Yes, good morning, everyone and congratulations.
Ken.
Nations water.
Great. Thank.
And could you talk a little bit the about the capital deployment strategy in light of your.
And what for hanging with Desjardin capital markets. Your line is open.
And whether a substantial issuer bid.
Thank you everyone and congratulations for the good quarter.
Good morning, and while obviously.
A sound capital allocation strategy has been.
For a favorable market environment.
As you said, we do have a strong balance sheet that provides.
And substantial issuer bid is something that you.
He said our priority is to invest and the growth of the company and when you look.
Good.
Sound capital allocation strategy has been.
Arguments, we maintain that.
As you said, we do have a strong balance sheet debt provides us with flexibility.
The Q1, we completed the NCI we invested.
And the growth of the company and when you look at.
Almost of the NCI would be that we start.
Our share up to $600 million of investment we maintain that.
<unk> shares.
The disciplined approach.
As you also saw on our Q1, we completed the NCI, we invested almost $300 million and share buybacks that completes the NCI would be that we started.
<unk> ability and if we decide to be opportunistic and buying shares though we have that we do have the.
Possibility.
He would start in December.
And until then while as you said the good news is we have a strong balance sheet.
<unk> now and the next.
The ability and if we decide to be opportunistic and buying shares though we do have that we do have that the.
Excellent and I was wondering.
<unk>.
And no decision taken now but.
The range of.
As I said there is.
But at the whole and also.
Excellent and CIB of Windows.
So expect due to the new project.
Windows.
That's great.
And then.
Greg can you talk about the supply chain constrained I was wondering if the.
And the sickle or.
The ramp up at you on.
And that's the <unk>.
Okay.
Also sort of and with respect to the new project and.
Ex plan.
And given the strong consumer demand and the new capacity the increase require either a bulk of ore and Austria.
On project came and sort of and is also on plan.
Good morning, Ben first for you on <unk> III is on plan.
And this is doing a good then we.
And is also on plan and.
On the backend of the Q3.
And the production.
Kevin and sort of and is also on the <unk>.
And then and maybe.
And then picturing the much of rise hall will be made and get it out of this is on plan.
The 2.
And and the sort of and facility revamp is also on planned and.
And supplier network.
And we'll start production.
For example, and ourselves.
And then.
In terms of engine and maybe.
<unk> investment and <unk>.
To the complement on the what the answer to Robin and the first question.
Those of you say there is some of the timing of equipment.
Very good.
And then the engine capacity is very true.
And we were already in and then investment mode.
Short for all.
And we're happy.
The satisfied for the growth we had.
The realized loss in fiscal year 'twenty 3.
The equipment.
3.3 will be full of running kt of total with watercraft and 30%.
<unk> is the.
Very short period.
And tweaking.
As far as the ratio upgrade of pine.
King and others.
And for all we are happy.
Psyche of the.
And the right capacity.
And fiscal year 'twenty 3.
The <unk> III will be full of running it total with watercraft and 30%.
Great. Thank.
And that will be project, and and we tweaking to optimize production and others.
And the line of Fred Wightman with Wolfe Research Your line is open.
Right.
And.
And for fiscal year 'twenty.
Thanks for taking the question I just wanted to.
3 of them.
Look sort of the commentary you provided last quarter for your retail expectations I think you've talked about high single digit retail and if we look on what you posted you came in quite a bit above.
Greg Your line is open.
And that.
And.
Does that mean for these retail parameters that you sort of outlined here for <unk> and <unk> what drove the outperformance was the better than expected.
And all expectations I think you've talked about high single digit retail and if we look on what you posted you came in quite a bit above.
And for sort of the guy.
Of that quarter. So what does that mean for these retail parameters that you sort of outlined here for <unk> and 3 Q what drove the outperformance was the better than expected consumer demand better availability.
In terms of numbers I think the surprise was and.
And how does that shake out for sort of the guide.
And 3 wheel and obviously.
Good morning, Fred.
Youre right that we did call out that the.
Retail it would be a bit soft more softer than what we actually delivered in terms of numbers I think the surprise was and the accelerated retail for personal watercraft and 3 wheel and obviously.
Our retail.
<unk>.
<unk> for the.
And as set out of certain level. So whatever we retail in Q1 as retail that we lose and the second quarter and so.
And from earlier.
Patient and provided for stronger growth in the in the first quarter versus what we were expecting obviously, it's going to impact our retail expectation for the second quarter.
Pre sold units specifically.
<unk>.
Makes sense and just circling back to the allocation question from earlier can you talk about how pre sold units sort of factor and the internal allocation.
GAAP record.
And if you've seen any change and sort of dealer order patterns and tied to pre sold units specifically.
Is that the record high.
The first of all we're trying to try and our goal is to honor every pre sold unit to the consumer.
Hi.
Have less visibility on the flow.
Humor.
On a record of pre salt.
But.
Our net.
For.
And season.
The thing.
And until the unit is that the record high.
As.
Hi, we trying to owner every single unit debt is pre sold for every product line.
We have less visibility on the <unk>, but we still have the team is doing their best.
As for methane Anthony with Stifel. Your line is open.
Yes he is.
Often.
Sales of the consumers.
On.
My first question is on your parts of apparel and accessories.
<unk>.
And it.
<unk>.
It increased twice as fast as your revenues.
With Stifel. Your line is open.
And give us some color on.
Hi, good morning, everyone.
The strong performance.
1 my first question is on your parts of apparel and accessories.
And it.
<unk> used the <unk>.
The twice as fast as your revenues during the quarter. So I was wondering if you can give us some color on.
What explains.
Winter.
And that strong performer.
<unk>. He was age is 1 element and the second 1 is.
<unk>.
The <unk>.
The link ecosystem that we've put together.
The look more of than typical.
Our fifth many product lines.
On the snowmobile season.
Line and fit and many product line. This is really.
But actually use age is 1 element and the second 1 is the.
And of.
The <unk>.
The link ecosystem that we've put together.
Those.
And the accessories.
And my other question was on your survey you shared some very interesting data point on.
<unk> doing extremely well.
And 3% of buyers.
2 things that are generic thing the growth.
Here's mentioning 7% of new entrants.
Growth.
And the purchase of vehicles.
And my other question was on your survey you shared some very interesting data point on on the consumers you are quoting 3 per cent of buyers.
The issue and Covid.
And instead of traveling and you were mentioning.
The portion of the growth.
<unk> trends.
What does explain and the surge and demand that <unk> seen for for power.
And so.
For sports.
And what.
Were you surprised by these results and.
Staycation and Covid.
<unk>.
And with survey about the thousand customer will purchase.
And then what does explain and the surge and demand that you've seen for for power sports products. This year.
<unk>, the new and trend is growing 37%.
Sure.
As a reminder, every at the end of each quarter, we do of survey about the thousand customer repurchase.
Then the of 'twenty.
The new unit during the quarter.
And once this is increasing.
And we were surprised by a few numbers, new and trend is growing 37%.
<unk>.
And then in Q1 fiscal year 'twenty 2 of our assist.
That it was.
<unk> 'twenty, but last quarter 50 of 'twenty 1.
Q1 quarter was of 30% this is increasing.
1 is the true per se.
Inc.
<unk> debt.
Debt for also surprise is the 7%.
The or traveling.
<unk> debt.
<unk> and those are extremely strong.
And that it was.
<unk>.
Was COVID-19 distraction.
<unk>.
<unk> big portion.
And we are very happy and you need I think and we need to give to our marketing team.
The tradeoff.
Team they've done the very good job too.
And then those are extremely strong.
<unk> of what it was a year ago our website.
<unk> the result.
Right.
And.
And we are very happy and you need I think and we need to give to our marketing team.
We tried to a decade.
They've done the very good job.
Kate to ride.
<unk> looked at our website today versus what it was a year ago our website.
Right the right.
<unk> graph.
And we encourage them to ride.
It gets easier.
Right.
Z for the people, who don't know the industry.
And the woman of on the road.
Tree, Kate the customer <unk> and the wear to ride.
<unk>.
<unk> we.
Education.
The them to make sure the select the right product.
<unk> of.
And we encourage them to ride.
This incredible.
For.
<unk> <unk> day, and the woman on the road.
The result, net you were asking these questions about.
And.
The purchase instead of traveling and Covid distraction just to see if if we have some benchmark.
Evolved.
At the is giving dose incredible.
And we're asking that question.
And was that the first time that you were asking these questions about.
<unk> 2 <unk>.
The traveling and Covid distraction just to see if we have some benchmark has that evolved.
<unk>.
The most relevant 1 and the traveling was.
<unk> quarter.
The first.
I know if you want to do a good survey of need a certain number of question of too many but not the litho.
Okay.
And so and we tried to remove the 1.
And the line of Shawn Collins with Citigroup research.
The most relevant 1 and the traveling was the first line okay.
Good morning.
Hey.
Thank.
And so on today's unique inventory environment.
Thank.
Ironman and connect.
Your question comes from the line of Shawn Collins with Citigroup research.
Your line is open.
Certainly the challenge maybe a high class chat.
<unk> the challenge I wanted to ask if there are any.
And my question is on today is unique.
Any.
And any inventory environment and its impact on on retail results.
Today's the lack of inventory of our scarcity of products and certainly a challenge maybe a high class challenge, but still a challenge I wanted to ask if there are any.
And I would say.
Any bid.
Curious for the past, where you experienced a similar environment and.
And I'm curious how that may have played out price all of itself any any.
Historical context might be helped.
Loosing watercraft and 1980.
I would say this.
The 8.
<unk>.
Interesting question and I would say that.
And.
I saw a period of likely going through.
And we'll use out there and.
<unk>.
And.
And the growth was incredible.
The producing and watercraft.
1988.
<unk> 1 product.
90.
Line versus the others.
Fee to supply to the day.
The whole industry all product line like this.
On that bus no use out there and the.
The growth was incredible the of nice over the years in our industry.
This thing is truly unique.
Free clients, taking up versus the others.
<unk>.
As you experienced supply chain challenges and some rising.
The first time in history of force.
Any commentary on how.
Well and successfully and you are.
For.
Helpful.
Your line is truly unique maybe just a brief follow up.
As you experienced supply chain challenges and some rising.
Our team where aluminum costs and woods.
And Terry on the how.
<unk>.
Well and successfully you are kind of pass on.
And.
On the.
The special surcharge.
To the and sugar.
<unk> was effective June 1.
Thanks Syed.
First the price increase.
On the marine where aluminum costs and wood are very critical.
<unk>.
We already announced.
Yes.
A special surcharge.
That was effective June 1st and.
And all year, we are partially hedged.
And will be announced shortly for being effective.
Hedged when the 1.
With the model year change.
On the power sports side.
<unk>.
And now.
And is versus and for water.
Now our edge then.
So.
This all year, we are partially hedged.
And the model year.
Hedged for year, we increase our pricing between the 1% to 2% that's typical.
The change for the.
The change for RV is July 1st and for watercraft and since September.
That's helpful and.
On the price increase at the model year change then that's the.
Your next question comes from the line of Brian Morrison with TD Securities.
The <unk>.
Yes.
For all of those products.
Hi, good morning.
Can you talk about going back to July of <unk> can you talk about the ramp trajectory of those extra 50000 units is that a methodical ramp or do you hit the ground.
Line on the line of Brian Morrison and with TD Securities.
Running and for Pwc.
Yes.
And when will that commence running is that of Q for Q1.
And back to whereas 3 can you talk about the ramp trajectory of those extra of 50000 units is that a methodical ramp or do you hit the ground running and then also in terms of character of same question for Pwc.
And that will be on the backend.
For Q1 of.
And then.
Net.
The way you can see.
And with you on a 3 you on a 3.
3 of the construction is ongoing we already have.
See it this year this fiscal year.
Training and employee.
Here the account maybe at the 60% something like.
E of.
For Q3.
Debt in fiscal year 'twenty, 2 you can count the 50% of additional goodbye.
And the production where the run.
Run.
The 3.4 months. This year. This fiscal year, then you can probably accounts, maybe at the 50% something like that.
Debt and.
Next year, obviously and fiscal year 'twenty, 2 you can count the 50% of additional capacity.
All of additional capacity for watercraft.
The get it that all the and selection will be done for the stock.
Q.
Section.
In the fall.
For and changing gears to the cost side of the equation and.
The $300 million of the cost savings from <unk> and 'twenty 5.
<unk> shuttle and capacity for watercraft.
And first of all of the current dynamics or can you update us on.
This is coming in Q4.
And on on that entails while the.
Obviously, there were many levers.
For the cost side of the equation.
And the $300 million of cost savings from and 25.
To.
<unk>.
For the.
And hold the deferred at all with the current dynamics or can you update us on.
And make it.
And with that and more.
And on that and.
<unk> of.
And 25, the 300 million and is also introducing products.
<unk> said the last time.
And with your.
I'm focused.
This quarter was very strong and some of that is driven by the.
On all of the units that we can produce.
But 1 of the big pillars of and.
And 25 of the 300 million and is also introducing products with better margins and obviously as you see our.
The again low levels of inventory.
On and some of that is driven by the.
And as there are some learnings that will stay with us even when the industry comes back to a more normal way of opera.
And worried about our ability to get to that $300 million.
For reading through.
Actually with <unk>.
We will have again low levels of inventory.
And at this Brian will obviously.
Sales programs there are some learnings that will stay with us even when the industry comes back to a more normal way of operate.
Obviously, the more color then.
Can you just give us a sense of how far you are through it at this point and time.
Again tough to call, Brian will obviously look forward to updating.
Investors and analysts and the near future on our end and 25 plan and we'll give you more color.
And.
And we've seen some strong gross margin.
And then.
Margin booked here.
The limited promotional.
Question comes from the line of Derek delay with Canaccord Genuity. Your line is open.
<unk> gross margin and your view changed going forward.
And 1 for me just on the gross.
It was 20%.
It seems and strong gross margin performance here.
GAAP and your view.
The limited promotional spending and sales program.
You finished last year very strong gross margin on.
Graham.
And our station for this year is that we should be slightly up compared to the fiscal year 'twenty 1.
And mid 20% prior to the pandemic has that stepped up and your view.
<unk> got to deliver $300 million cost savings some.
And finished last year very strong gross margin and our expectation for this year is that we should be slightly up compared to fiscal year 'twenty 1.
And so that is lifting the Mas.
And 1 and 25 planned and win and our target to deliver $300 million cost savings some.
And then.
The margin improvement.
For the usage of our assets.
And obviously this quarter we benefited from.
But with better margins.
And of pack sales and so that is lifting the margins.
<unk> as well.
But going forward, yes, I do believe that as we.
We are.
Well that's helpful and then actually just 1 more.
For our assets.
And I continue introducing products with better margin.
For revenue.
<unk>.
We've exited the outboard engine business as well.
And to continue going forward.
And so that will help bring the the gross margin.
On the walk.
And up.
Yes.
Okay now Thats helpful and then actually just 1 more.
For Ari.
Randy plenty of typically wrong like of 445 percentage of revenue.
With Morningstar Your line is open.
1 thing we should expect to continue going forward.
The total no question.
The work.
Thank you.
Yeah.
Whether or not.
Yes.
Jim.
But you are seeing more ads for.
The question comes from the line of Jamie Katz with Morningstar. Your line is open.
And the bad or whether the.
Hi, good morning.
The.
Thanks for my question.
Slightly and Michael.
Thanks.
And whether or not the supply chain.
And do you mean.
And you are seeing more ads per day.
And.
As.
Our marine business.
Talk a little bit about that or whether.
And the seasonality.
For the.
And.
The slightly Michael.
Net.
On the product line, it's about the <unk>.
On them.
Same same.
Yes.
And that we face.
All of our affected.
<unk> and that's where I think our team is doing and the excellent.
And the depending obviously of the seasonality and.
The.
2.
But between all the product line, it's about the <unk>.
Line versus the other.
Others and example.
Same.
<unk> says that we're facing.
And we.
We don't need snowmobile.
<unk> and that's where I think our team is doing an excellent job.
And.
Working with our suppliers.
But we'll need to be retrofit.
Yours too.
Because.
The locate the parts to 1 product line versus the others and example, right now we don't need snowmobile.
Producing snowmobile with some missing part.
<unk> worked with our suppliers.
Part of the Veeco will need to be retrofitted, but we have time because.
Here's a line to make sure that we optimize the situation.
Starting really.
<unk> will first deliver.
And the type of thing.
And on Bruce.
To optimize the situation.
All orders from consumer and dealers that we have.
Can work.
Internally between the product line to make sure that we optimize the situation.
On that <unk> laid.
<unk> 2 <unk>.
All.
Deliver.
And with that commodity.
On for orders.
Carl.
For us to owners.
All orders from consumer and dealers that we have.
No I haven't given any color.
On that day.
For the number.
So.
But you guys laid.
Q1.
The increased commodity costs.
The commodity costs either on impact of about 190 Bay.
Carl.
And I think on the <unk>.
Yes.
And I think debt to continue.
Hello.
For the rest of the year, obviously with the higher volume.
Right.
The program.
1.
Rams and good mix.
The X.
The commodity costs side on impact of about 190 basis points on the margin.
Mix continue for the rest.
Continue.
For the rest of the year, obviously with the higher volume sales.
Sales programs.
For the.
Good mix, we'll be able to offset a lot of that.
A year.
That expectation is what we saw in Q1 is going to continue for the rest of the.
And or.
The year.
And.
And is it.
And there.
The equal.
And the state.
And <unk>.
And how you think your market share will pan out at the end of <unk>.
The year.
Our city and the fourth quarter.
And the outcome.
With the.
We believe that we provide.
Provide us with a and important competitive advantage.
The equal across the and the stable.
Vantage ability to replenish inventory and supply to demand so that should be driving.
And capacity and the fourth quarter with side by side.
We believe that we.
US with Ey and important competitive advantage.
Moving.
<unk>.
And Ken if you would like to ask a question. Please press Star then the number 1 on your telephone keypad.
And the market share gains.
Net income from the line of Derrick Johnson with BMO capital markets.
And <unk>.
Your line is open.
And.
Hey, good morning, I sort of have the inverse.
She would like to ask a question. Please press Star then the number 1 on your telephone keypad.
<unk>.
Net.
And.
Question comes from the line of Garrick Johnson.
And.
And with no capital markets.
And then.
Your line is open.
And the product.
Debt.
Hey, good morning, I'm, just trying to have the interest question to what Greg Craig asked about.
Inventory down 30.
Retail ordering and.
Do you have in place what do you have in place and policing over ordering since the product is so difficult to get.
At the dealer level and the other question I had was about your own inventory.
For cash.
And with inventory down 34% for materials and whip up 64.
Have you had mismatches like that before and your past and is there any risk to sort of obsolescence of the whip.
And if I'm sure.
First on product seasonal product.
And direct.
And we'll have.
Like the idea of I mean, we know exactly.
On the allocation.
<unk> performing.
<unk>.
Now the region and.
For seasonal product are very different than.
And each of the plans for our growth.
And then pro and our year round product season on the product.
ROE of why we have like.
The idea of I mean, we know exactly.
And attending of how.
<unk> product line performing now each region and each dealer perform and we can plan for our growth.
The discussion.
And year.
With the.
Here is why we have like a target.
The sell.
For each dealer and after that.
The order and new Youll wish list, we try.
Net.
Hi to disappoint the dealer.
Letting dream about the big numbers that we cannot deliver.
The.
And this of.
The.
Worked very well.
With the salespeople.
Well seeing that the seasonal.
Okay.
Product on the off road side right now we are working on the location.
At that point, the dealer by letting dream about the big numbers that we cannot deliver.
And the versus the others.
Very well.
And also to be fair on the product.
And the product.
Mix off road will be on the location.
The side right now we are working on the location and it's our job to make sure like.
And on your question on the raw material.
Yes.
The material and with us.
For.
Over $200 million of this quarter compared to June 30.
The on the location.
1 obsolescence.
And at the end of the.
And 3 turns around and very quickly. So it's the question of getting the missing parts and and then retrofitting the unit.
The raw material and and whip is up.
Over $200 million of this quarter compared to the June 31, no concern on obsolescence that inventory turns around and very quickly.
Number of <unk>.
Getting the missing parts and and retrofitting of units.
Pretty soon.
And it's so all.
The the.
The number is high but.
Well under control.
That's the second driven.
And then just 1 more if I cuts and some new.
And the rear here.
The.
On that.
Oh, the distraction of last year because.
And she said the only 7%.
Because that.
So the purchases were as the Covid.
And the construction kind of curious Don if you asked them, but maybe the second driven derivative of that.
And it would be my team has but I don't have the answer.
Who bought.
The sequential garik.
And last year, because that was kind of the bull case going forward you of a bigger installed base more friends, keeping up with the Jones and things like that.
The state that I can share with you.
Hello.
I don't.
But.
Be my team has but I don't have the answer.
<unk>.
The sequential.
Correct.
Sure.
For sure we see that the.
Just more of a woman.
Sure.
And then our family oriented.
But I can share with you but.
And.
The new and trends are.
The answer to exactly what you're asking.
Our 42%.
And for Us.
<unk> versus $32 for the purchaser.
More of a woman.
It's fine.
And then and more family oriented which is all positive.
Your line is open.
And I don't have the answer to exactly what you're asking.
And the commentary so far I just wanted to ask you.
And for very much guys.
About your expectations with regards to.
Question comes from the line of Mark Petrie with CIBC.
The price.
And as open.
Guidance to the back half of the year on.
And for all of the commentary so far I just wanted to ask about.
The <unk>.
Boat.
And.
And your expectations with regard.
<unk> 2.
The promo programs over the course of time.
Evolves, a little bit in terms of how the pricing program.
Time for the back half of the year on.
Rams.
Do you expect.
And that normalizes.
But.
License.
<unk>, who sort of remain in place.
Good morning.
Place for it into fiscal 'twenty 3.
Mark and March.
And do you expect that the industry.
Fiscal year 'twenty, 1 we had a positive tailwind from programs of about 200 basis point.
The fact that that normalizes over the course.
Suspecting that 200.
Good morning, Mark.
Mark.
When we talked back in March.
And I indicated that in fiscal year 'twenty, 1 we had a positive tailwind from programs of about 200 basis points.
Paul.
And we were.
Point.
<unk>.
Expecting debt 200 basis points to remain in fiscal year 'twenty 2.
The turn on the switch and.
On performance, we had in Q1, we've adjusted that assumption.
And it's worth thinking about inventory replenishment.
And it's 50 basis point.
<unk> and what's going to happen more and probably in the back half of net.
The program.
And next.
Graham.
And so.
Here, obviously, when we turned on the switch and it's February 1.
And maybe.
The inventories are still going to be lean.
Obviously as I said there are some important learnings that we.
Leanne instrument and fiscal year 'twenty, 2 so it's going to happen more probably in the back half of next year.
And that will stay with us.
Half of next year to still to be favorable on the commercial side.
Going for.
Right.
And obviously as I said there are some important learnings that we are from from Covid.
And how we tailor our programs that will stay with us going forward.
The line I turn the call back over to our presenters.
For 2 obviously the bottom.
Thank you all for joining us this.
On line early to.
Morning, before we let the Hugo we wanted to take the opportunity to invite you to join us for our virtual kind of him off road and treat will vehicle.
The call.
And <unk> product and <unk>.
At this time I turn the call back over to our presenters.
And the.
Also feature to the official launch of the project.
And just before we let the Hugo we wanted to take the opportunity to invite you to join us for virtual kind of on a pro and treat with vehicle.
And again and I think.
And production.
The event will be held on August.
And this concludes today's conference call.
The official launch of the project and we look forward to sharing with you more information about this 1 of the next few weeks and we hope you'll be able to join.
Paul.
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And us.
Okay.
Yes.
Yeah.
And.
Yes.
Yes.
Okay.
[music].