Polaris Inc. (NYSE:PII) shares dropped 11% in after-hours trading following BRP Inc. (NASDAQ:DOO)’s downward revision to its full-year guidance for fiscal 2027. The adjustment stems from U.S. customs policy changes. BRP stock, meanwhile, climbed 24% after the disclosure.
BRP Announces Major Cost Increases
Canadian manufacturer BRP revealed on April 6 that U.S. tariffs, aluminum minimums, and steel surcharges will add 232 basis points to costs in its snowmobile and off-road segments. These primarily affect long-tail Can-Am Spyder models.
The company plans to absorb 25% of the cost surge while passing the remainder to dealers, up from a previous 50% absorption rate. BRP also streamlined inventory and related self-adjusting production facilities earlier, cutting over $50 million in expenses.
CEO Addresses Tariff Challenges
BRP CEO Denis Le Vot stated, “Like many manufacturers, we operate in a highly volatile and unpredictable tariff environment. This creates uncertainty across the entire market.”
He added, “Despite the impact of these policy changes, we remain steadfast and resilient. Through our team’s agility and enhanced visibility, we will overcome these challenges and position BRP for long-term growth.”
Broader Industry Ripple Effects
Polaris’ decline reflects investor concerns over shared exposure to snowmobiles, off-road vehicles, and motorcycles. Both companies produce powersports equipment, amplifying the tariff news’ influence across the sector.
These developments signal heightened worries about non-essential production adjustments and employment in the industry, shifting overall market sentiment.
