Financial Data and Key Metrics Changes - Revenue for the third quarter reached CAD 2.3 billion, a 14% increase compared to the previous year, driven by stronger ORV shipments [5][13] - Normalized EBITDA grew by 21% to CAD 326 million, while normalized EPS rose by 33% to CAD 1.59 [14] - Free cash flow from continued operations was CAD 320 million, with cash on hand at CAD 250 million [14] Business Line Data and Key Metrics Changes - ORV revenue increased by 22% to CAD 1.3 billion, with side-by-side retail up in high single digits, outperforming the industry [9] - Seasonal products revenue decreased by 2% to CAD 606 million due to a planned reduction in snowmobile shipments [10] - Parts, accessories, and apparel revenue rose by 18% to CAD 379 million, reflecting higher sales volume and a favorable mix of OEM engine sales [12] Market Data and Key Metrics Changes - North American retail sales decreased by 4%, with a 1% decline excluding snowmobiles, while Latin America saw a 13% increase in retail sales [6][7] - EMEA markets experienced a 4% decline in retail, and Asia-Pacific saw an 11% decrease [7] - Demand remained stronger for high-end products compared to entry-level models, which is favorable for the company [7] Company Strategy and Development Direction - The company is focused on disciplined execution and operational efficiency, with a strategic plan aiming for CAD 9.5 billion in revenue and CAD 8 in normalized EPS by the end of fiscal 2028 [19][20] - The company plans to enhance capital returns to shareholders by reactivating its share buyback program, allowing for the repurchase of up to 3.1 million shares over the next 12 months [15] - The management is optimistic about capturing demand upside as market conditions improve, supported by a strong product lineup and healthy network inventory levels [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving higher guidance for fiscal 2026, expecting approximately CAD 8.3 billion in revenue and CAD 5 in normalized EPS for the year [18] - The company anticipates a flat industry for ORV retail in the next 12 months, with a focus on maintaining strong dealer engagement and inventory management [42][54] - Management noted that the promotional environment remains elevated, particularly for entry-level models, but high-end products are performing well [41][66] Other Important Information - The company is in the process of finalizing the sale of Telwater in Australia, with expected cash inflow around CAD 200 million pending regulatory approvals [12][108] - The transition of production for the Ryker model to Vietnam is expected to impact deliveries next year, presenting a headwind [68] Q&A Session Summary Question: Can you provide insights on the current versus non-current inventory situation? - Management noted strong engagement from dealers and positive retail performance for new models, with gains in current inventory and planned losses in non-current inventory [23][25] Question: What is the dealer appetite for inventory given macro conditions? - Management indicated that dealers are more willing to take on new models due to reduced inventory levels and positive product reception [30][32] Question: How do you see the promotional environment affecting your business? - Management acknowledged that while the industry remains promotional, their sales programs are trending lower compared to the previous year, allowing for better positioning [66] Question: What are the expectations for snowmobile inventory levels? - Management expects to realign inventory levels by the end of the snowmobile season, with a focus on reducing non-current inventory [61][62] Question: What is the expected cash inflow from the sale of Telwater? - The expected cash inflow from the sale of Telwater is around CAD 200 million, pending regulatory approval [108]