And I would like to turn the meeting over to Mr. Philippe Deschamps. Please go ahead, sir. Thank you, Sylvie. Good morning, and welcome to BRP's conference call for our second quarter of fiscal year twenty-five. Joining me this morning are José Boisjoli, President and Chief Executive Officer, and Sébastien Martel, Chief Financial Officer. Before we move to the prepared remarks, I would like to remind everyone that certain forward-looking statements will be made during the call, and that the actual results could differ from those implied in these statements. The forward-looking information is based on certain assumptions and is subject to risk and uncertainties, and I invite you to consult BRP's MD&A for a complete list of these. Also, during the call, reference will be made to supporting slides, and you can find the presentation on our website at brp.com under the Investor Relations section, so with that, I'll turn the call over to José. Thank you, Philippe. Good morning, everyone, and thank you for joining us. Our financial results for second quarter were essentially as expected and reflect our focus on reducing network inventory to support our dealers. However, the macroeconomic environment and high interest rate continue to put pressure on consumer demand. As a result, the demand has declined more than anticipated, while promotional activity has intensified. In this context, and given our commitment of safeguarding our dealer value proposition, we have decided to further adjust our production schedule for the year, which is reflected in our updated guidance. Let's turn to slide 4 for key financial highlight. Revenue reached CAD 1.8 billion, normalized EBITDA was CAD 199 million, and normalized EPS was CAD 0.61, generally in line with our expectation. We have made great strides to reduce network inventory, which is down 13% so far this year, progressing towards our objective of a 15%-20% reduction by the end of fiscal 2025. As for retail, our North American Powersports sales were down 18% from a strong second quarter last year, as the industry experienced weaker consumer demand, as you can see on slide 5. We are operating in an increasingly challenging economic environment. Market conditions were in line with our plan through April, but deteriorated in the second quarter. Although these conditions are impacting many of the regions where we operate, it has recently become more challenging in North America, our key Powersports market. On the plus side, we have been more proactive than most OEM at reducing network inventory, and this was received positively by our dealers. Having said that, OEMs with high level of inventory have been more aggressive with promotion, which, as expected, impacted our market share this quarter. Looking at retail performance for the quarter on slide six. Overall, retail was down in the teen percentage, lagging the industry in North America, EMEA, and Asia Pacific. Meanwhile, it was up 18% in Latin America, driven by a very strong performance in Mexico and Brazil, where consumers are highly engaged with our Sea-Doo and Can-Am brands. Given our focus on bringing network inventory down, we were anticipating some market share loss, namely for side-by-side. A few words on our personal watercraft market share decline. Last year, you may remember that our main competitor had supply issue, which turned out to our advantage. The fact that this situation is back to normal, combined with the current industry weakness, had a larger than expected impact on our retail this season. Turning to slide seven. We are pleased with our result in ORV for the full season, as we've delivered record retail performance, up 8% in an industry that was flat. We gained about two points of market share in side-by-side vehicles, passing the 30% mark for the first time. We also performed very well in ATV, gaining one and a half points of market share. With these achievements, we have closed the gap with the number one position in the industry in terms of ORV unit retail per dealers. In the current environment, we expect further short-term market share volatility. However, with our recent product launches and momentum with dealers, we believe we will continue to gain share in ORV for the coming season. Let's turn to slide eight for a highlight of our recent dealer event held in California. It was one of the largest ever in terms of product news, with over three thousand participants in person and virtual. We announced the availability of our highly anticipated Can-Am Pulse and Origin all-electric motorcycle lineup, making our reentry into two-wheel space. These models leverage our own Rotax EPOWER unit, which also propel our electric snowmobile and will be used in future BRP electric product. In terms of the next step, we will be hosting several media event, training our dealers, and hosting VIP customer event throughout the second half of the year. We intend to become a global leader in that space, with true innovation designed to simplify the riding experience for new riders and introduce electric motorcycle to all. But this was not the only key news of our dealer event as you can see on slide nine. We bolster our Can-Am off-road lineup, introducing the four-seat version of our top-of-the-line Maverick R. This extension was highly anticipated, as multi-passenger model represent close to 60% of sales in that category. We also introduced our all-new Outlander ATV platform in the high CC segment, representing the first major platform upgrade in that segment in about fifteen years. This new platform has been very well received, just like the mid-CC last year. As for three-wheel vehicle, we've launched the all-new Can-Am Canyon, our most rugged ever in this segment, purpose-built to increase accessibility into the growing adventure terrain market, which has doubled in recent years. The Can-Am Canyon will target three-wheel riders of all skill levels. On the Sea-Doo side, we further build on the Fish Pro success by introducing the Fishh Pro Apex, the most powerful personal watercraft in that segment, and the Switch Pontoon Fish Edition, the first ever in that category. These models cater to a very large potential consumer base, with over 220 million recreational anglers worldwide. The product launches at our dealer event demonstrate our commitment to innovation and position us to continue gaining market share in the future. Now, let's turn to slide 10 for more detail on our year-round product. Revenue was down 32% to CAD 1 billion, primarily due to reduced shipments. At retail, Can-Am Side-by-Side was down high single-digit%, slightly more than the industry, as we're facing a very strong quarter last year and aggressive promotion from other OEMs this year. However, we continue gaining share in the utility category, driven by the ongoing success of our high-end Defender Cab. As for ATV, retail was down low single-digit% in the quarter, in line with the industry. We are still seeing solid traction with our new Outlander platform, which delivers market share gain in the mid-cc segment. Looking at three-wheel vehicle, our retail was down in the high 20%, slightly lagging the industry. We continue to see stronger performance at the high end of our lineup, while the Ryker, our entry-level product, is affected by the economic pressure on target consumers. Turning to seasonal product on slide 11. Revenue were down 40% from last year to CAD 542 million. Our retail and personal watercraft declined in the mid-20% due to weak industry trend and reduced market share, reduced market share, as explained a few minutes ago. Entry-level product were more impacted, but we perform well in the high-end category. At this stage, we expect to finish the season with more inventory than planned. The Switch was down high 30%, suffering from generally weaker trend in marine and lapping a strong quarter last year, supported by early introduction momentum. Moving on to slide 12, with Powersports parts, accessories, and apparel, and OEM engines. Revenue were down 12% to CAD 258 million due to lower sales volume. PNA sales continued to benefit from our growing fleet, especially in ORV, offset by weaker demand for snow-related product and lower accessory sales due to softer retail. Turning to marine. Revenue were down 54% to CAD 57 million, reflecting lower boat shipment volume. Looking at retail sales, Alumacraft was up about 40%, while Manitou was up high 20%, as we were lapping a low retail volume period. As for Quintrex, retail was down mid-single digit, in line with the industry. With that, I turn the call over to Sébastien. Thank you, José, and good morning, everyone. Our Q2 financial results came in essentially in line with our expectations and demonstrated our commitment to support our dealers as we proactively slowed our shipments in the quarter to accelerate the reduction of our network inventory levels. Looking at the numbers, revenues were down 34% to CAD 1.8 billion, primarily due to lower shipments. We generated CAD 377 million in gross profit, representing a margin of 20.4%, down from last year due to the less efficient use of our assets, given the lower production volumes and higher sales programs. These were partly offset by a richer product mix, especially in side-by-side and personal watercraft, and favorable pricing. In this context, we continued to diligently manage our expenses and also benefited from the recognition of R&D subsidies in the quarter. Combined, OpEx was down 10% compared to Q2 last year, alleviating some of the pressure from reduced shipments. Including all of the above, our normalized EBITDA ended at CAD 199 million, and our normalized earnings per share at CAD 0.61. Turning to slide 15 for an update on our network inventory. As discussed since the beginning of the year, a key driver of our plan for fiscal 2025 is the reduction of our network inventory to support our dealers, whose margins are pressured by the uncertain economic environments, high interest rates, and increased competitive dynamics. Being the first OEM to commit to supporting our dealers through this challenging environment by proactively reducing our shipments earlier in the year, allowed us to make solid progress on our network inventory reduction target. In fact, as of the end of Q2, our network inventory is down 13% from Q4 levels, well on our way towards our objective for a reduction of 15%-20% by year-end. Furthermore, we continued to improve the quality of our inventory, with most of the reduction in the quarter coming from noncurrent units. While the actions we took to reduce our network inventory during the second quarter impacted our financial performance, we strongly believe that supporting our dealers in this difficult environment is essential to ensure our long-term mutual success. With this in mind, let's turn to slide 16 for an update on our guidance for the year. As José mentioned, our markets have proven to be more challenging than expected so far this year due to weaker industry trends, especially for side-by-side and personal watercraft, and increased promotional activity from competitors in the form of consumer rebates, dealer incentives, and even MSRP reductions. Moreover, the difficult macro environment, which had started affecting many of our key international markets in fiscal 2024, now seems to also be impacting the very important U.S. powersports market. As such, we are approaching the second half of the year with caution, assuming that the softness we saw in Q2 will persist through H2, and will likely continue through at least the first half of next year. Consequently, we have adjusted our shipment plan for the rest of the year as we continue to aim to rightsize our network inventory levels in a weaker industry environment. Additionally, our revised guidance also incorporates planned incremental sales program expenses, as we will continue to support our brands and our dealers in this increasingly promotional environment. Following these adjustments, net of the benefit of additional cost-saving initiatives as we rightsize our expenses for the current environment, we now expect our revenues to end between CAD 7.8 billion and CAD 8 billion, normalized EBITDA to end between CAD 890 million and CAD 940 million, and normalized DPS to end between CAD 0.75 and CAD 3.25. With these revised assumptions, coupled with the working capital headwind resulting from the change in production schedule, we now expect a lower level of free cash flow generation for the year, somewhere north of CAD 200 million. As for how we anticipate the rest of the year to unfold, we expect a sequential improvement in Q3 in terms of revenue, normalized EBITDA, and normalized DPS, with the former expected to be up in the range of high single digits to low teens% from CAD 0.61 we just delivered in Q2. While fiscal 2025 is not unfolding as we had initially planned, we strongly believe that we are taking the right actions to protect our business and our dealers in this challenging environment, all the while positioning our business to lead the industry when markets return to growth. On that, I'll turn the call over to José. Thank you, Sébastien. The first half of the year was challenging, but we believe we made the right decision at the right time. Our plan has been well executed, and I thank our teams for their dedication through the difficult period. Over the years, our decisions have always been guided by our commitment to balance the interests of all our stakeholders. In this spirit, we were the first OEM to proactively reducing shipment. We want to protect our dealer business, the value of our brands, and our long-term profitable growth. Dealers have recognized that our action are those of a true business partners. We had the opportunity to connect with them at our dealer event. They are enthusiastic about our recent product launches and pleased to see that we remain committed to actively investing in R&D. Despite the current context, they know we are doing what's needed to remain their OEM of choice. Over the short term, proactively managing production and network inventory is a priority. As we look to the long term, we remain confident in our strategy, driven by our focus on innovation, extensive portfolio, and strong dealer network. We are well positioned for continued success. On that, I turn the call over to the operator for question. Thank you, sir. Ladies and gentlemen, if you would like to ask a question, please press star followed by one on your touchtone phone. You will then hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by two. If using a speakerphone, you will need to lift the handset first before pressing any keys. And out of consideration to other callers on the line today, we ask that you please limit yourself to one question and one follow-up. Thank you. And your first question will be from Craig Kennison at Baird. Please go ahead. Hey, good morning. Thanks for taking my question. I guess, we appreciate what you're doing with respect to dealers and making sure they're as healthy as can be. How do you know you've done enough cutting? Those of us on the outside are all trying to figure that out, and I'm curious what you'd use internally to know that this cut is sufficient. Yeah, good morning, Craig. You know, when we look at the macroeconomic pressure on the consumers and the overall context, we approaching the balance of the year on a cautious stance. And basically, we saw the Q2 retail trending down. We saw the trend of retail going down in Q2, and it's continue in August. And what we expect for H2 is ORV to be down mid- to high-single-digit, snowmobile to be down low- to mid-teen, and watercraft and three-wheel, there is only a few months to retail, but they will be down by slightly above 20%. Then we believe by when we see the trend in Q2, we believe that projecting this in H2, that our quarter is the right approach. On our side, we obviously are in a better position than some OEM with our inventory. Some OEM who have more inventory are very aggressive on the promotional side for the consumers or the dealers, and even one in the off-road business reduce its MSRP, and we are follower. We're not, we will not, follow those action because we want to protect, again, our profitable business, we want to protect, the dealers, and we want to protect our long-term growth. And this is basically, how we plan H2, and we feel that where we are, we are at the right, right level for the balance of H2. Thank you. And as a follow-up, to what extent do your efforts to cut, you know, broad inventory, help you convince dealers to stock e-bikes and some of the newer products that you have in order to win showroom space with your dealer? Yeah, I think, I think on this, and it's not black and white, but, you know, I was for three days with the dealer at our dealer show, and obviously, they are happy about that we're the first OEM to commit to reduce inventory. They see that we are true partners. They see that we're trying to protect our profitability, theirs and ours, and we're working hand in hand with them. And they came out to the club first positive with the new product. This is always what they're looking for. But second, they believe that doing what we're doing, we're doing the right thing for the long term. And this is basically the mindset that we saw at club. On the two-wheel, I don't see the correlation between what we're doing for two wheels. You know, we will have 300 dealers year one, we sell the two wheels, and our requirement is some space in the dealership room, but our commitment for units is quite low, and we want to make sure we don't build inventory. Basically, it's taking a minimum inventory to display the product for the demo ride. After that, as much as the retail will replenish, then it will be a very low commitment from the dealer, and so far it was well received. Thanks, José. Thank you. Next question will be from Martin Landry at Stifel. Please go ahead. Hi, good morning. I was wondering if you could share your revised expectations for industry sales in North America for this year. Like I just said, Martin, on the previous call, and I will repeat. Right now for ORV, we expect the industry to be down mid- to high-single-digit%. For snowmobile, down low- to mid-teens%. Obviously, the snow will play a factor there. And watercraft and three-wheel, and there is only a few months to go, and it's slow retail month, they will close the year probably down 20%. And this is for the industry in North America. Under our retail side, because of the high promotion activity, that we will not necessarily be a leader but a follower, and we're planning to lose some market share during that correction, supply-demand period. We could lose some market share in some product line, but we convinced it's the right thing to do, for the long term. Okay, and just to be clear, are those units or dollars? ... unit. Units, sorry. Yeah. So, can you give us your assumptions for dollars? Right now, no. In terms of industry dollars, no. But obviously when you look at our guidance, we made a sizable adjustment to the year-round product business. The majority of it comes from side-by-side, given the softer trends we're seeing. Okay. And just to better clarify, what would be a good assumption to use in terms of average unit price sale fiscal 2025 versus 2024 in terms of decline? In terms of MSRP, the expectation is that we've done quite sizable MSRP increases over COVID. Inflation is tapering down, so the expectation is that we'll come back probably to normal pricing increases next year, as we've done pre-COVID. Usually, we try to price in the new features that we put in, some inflation on salary, et cetera. But we're mindful that price point is a significant headwind for some consumers. Usually we do a price increase of 1%. Could we be in that range next year? That would be a fair assumption, I think. Okay, that's obviously MSRP and maybe sometimes actual with discounts are going to be lower, right? Yeah, well, the promotional environment is still quite, quite high. We expect the promotional environment to be sustained at these levels, at least for the first part of next year. Okay. Okay, thank you very much, and best of luck. Thank you. Next question will be from Robyn Farley at UBS. Please go ahead. Great, thanks. I just wanted to clarify. You mentioned the retail declines you're expecting for the industry, and I think you were sort of mentioning that you might lose some share because others are being more promotional. But in your introductory remarks, it sounded like you were saying you expect to gain share in ORV for the coming season. So I just want to make sure I understand whether that would be sort of next year's calendar year. In other words, lose share between now and calendar end 2024, but then gain share in 2025, or just to kind of square that. And then I did have a follow-up, but let me just ask that first. On my prepared remark, we gained share in season 2024 that ended at the end of July, and now we're starting the new season, and we might lose some share, let's say, in H2. But with the product lineup that we have, with some inventory correction, we believe we will be gaining share over the full season from August first to July next year. Okay, great. Thank you for that clarification. And then my follow-up question is actually just on the electric bike that, you know, you're making a big push in here. I guess others' expectation for electric motorcycle has come down significantly over time, and just kind of wondering if you see that space differently than others, or what leads you to be more optimistic about the electric two-wheel market? Thanks. Yep. And you know, that decision to enter the two-wheel market, electric, was done four years ago, and we've made great progress over that period. We're totally realistic that there is, like, a slowdown right now in electric car sales, but we believe this is it will take a few year to adjust, and it, the trend is there. It will remain, that's for sure. But why we're confident, Robyn, I believe we have, you know, the right product. And what I'm very happy with in the last since June, we had a lot of media, a lot of dealer who have tried our product, and they are very happy with the product. It's a product, because there is no clutching. It's not a product for a long-distance rider, but it's a product for commuting or short distance. The product is very easy to ride. It has innovation, incredible connectivity. If you look at the price that we price with the range, we have, like, the base price is CAD 13,999 for the entry-level EV model. You have 160 km, about 100 mi of range, but our vehicle is equipped with fast charging. You can recharge from 20 to 80 in 50 minutes. This is on the product side. The Can-Am brand is well known worldwide now. We have a very good dealer network. We're planning 300 dealers in Canada, US, and 11 countries in Europe for the first year, going to 450 next year. The price range, again, we feel we're well positioned, and we have a very good marketing plan to make the product with a demo ride and a VIP event to make sure the people knows about it. And I was myself in France in July. There is 150 cities in Europe that are closing downtown to combustion engine vehicle, and a lot of consumers turn to buy electric motorcycle. Is it something that will be instant? This is difficult to say. I think we are better positioned than all the competition we have in that category, but it's a mid to long-term play. Okay, great. Thank you. Thank you. Next question will be from Benoit Poirier at Desjardins Capital Markets. Please go ahead. Yeah, good morning, everyone. For my first question, could you maybe provide some color about the level of promotional activities we see these days versus the 200 basis points impact in a normal environment? Also, the puts and takes with respect to fiscal year 2026, how we should be looking at fiscal year 2026, given your revised outlook for fiscal year 2025? Thank you. Yeah. Good morning, Benoit. Yeah, obviously, on the sales programs front, some OEMs are more promotional recently than we've seen during pre-COVID. We saw, obviously, from a retail perspective or consumer promotions, we're back to where we were in pre-COVID in terms of percentage of sales. But in absolute dollars, higher, because obviously there's been MSRP increases. In terms of incentives directly to the dealers as well, we see a lot of floor plan subsidies happening, back-end money. And so, some OEMs have been later in adjusting deliveries to their dealers, and so are probably finding themselves in a higher inventory position, and so they need to clear it out. And we expect that to continue through the rest of the year and probably in the first half of next year. Obviously, when rates come down, because it looks like the outlook is favorable for that, that will certainly help, especially on the buy down, especially on the floor plan for us and for the dealers. But as I said, we expect it to remain high, back half of this year and the beginning of next year. On your second question, what to expect for next year, it's a good one. Obviously, the environment is fluid very recently. So it's tough to come out today with a target for next year. I'm sure you can appreciate that, especially with the softer trends we're seeing across the industries and the uncertainty about the macroeconomic environment and where rates will be going, next year. What's gonna be the environment next year? Tough to call, but we are approaching the year with a few key assumptions. One, that the softness we're seeing across the different industries is likely to persist through at least the first half of next year, which means continued pressure on shipments and sustained high level of promotional activity. For us, we're likely to end the personal watercraft season with more elevated levels of inventory in the network, because of the industry slowdown that we saw, similar to what we saw in marine. So shipments for that product line are likely to be down next year. Obviously, we'll offset some of that pressure by taking the necessary actions to rightsize our cost structure. If we look beyond next year, we are optimistic about the business. We're well positioned to continue to grow our market share, especially in ORV, exploring new markets, and obviously, we still have further efficiencies to generate across the portfolio and across the business. Okay, what- And what we can achieve in terms of financial performance is really dependent on the industry. And so we do believe that in a normalized environment, Benoit, that the earnings power of the business is significantly greater than what we're gonna see this year and what we could potentially see next year as well. Okay, that's great. And just in terms of quick follow-up, you ended the leverage at two point one times, and you mentioned some color about free cash flow. So I would be just curious to see what is your comfort level in terms of leverage and your ability to pursue buyback activity in light of the revised outlook? Yeah, overall, very comfortable with the balance sheet. I've often said that coming out of the great financial crisis, we had a few key learnings. One is make sure we have a covenant-light debt structure, making sure we have long-term maturities on our debt instruments, making sure we have ample flexibility and availability on the revolver. And these are things that we've done. Our debt is covenant light, so we're not restricted from any increases in leverage that we might be experiencing in the short to midterm. We've recently renegotiated the maturity of a $1 billion term B, pushing it to 2031. We've recently extended the maturity this past May of the revolver to 2030. So we're very comfortable from a balance sheet point of view. And from a capital deployment, we've just recently completed the NCIB. We repurchased 3.2 million shares, completed in July. The next window is gonna open up in December, and obviously, we'll continue having discussions with the board. But we'll wanna make sure that we protect our flexibility in a context that is probably more uncertain these days than certain. And so we prefer to be prudent, but there is a few months to go before we need to make that decision. Thank you very much for the time. Thank you. Next question will be from Joe Altobello at Raymond James. Please go ahead. Hi, good morning. This is Martin on for Joe. Just sort of assuming that the retail environment holds up at the steady pace it is right now, or the pace it is right now, would you expect wholesale and retail to be in alignment next year, or do you anticipate further destocking? Right now, again, for H2, we will continue to deplete inventory. We are at 13 at the end of Q2, and our goal is to be 15-20. And, obviously, snowmobile will be critical, because we had more non-current than desired since last winter. In terms of balancing retail and wholesale the next year, I think it's too early to call at this point. There is so much volatility out there that it's very difficult to predict, and I would not, this morning, comment on anything on that one. Okay, understood. And just looking at this quarter, one of your competitors launched several model year 2025s earlier than normal. How has that impacted your shipments and retail, sort of in this quarter and generally? Listen, it didn't impact our shipment. I mean, we - the shipment are planned a few months in advance. We have dealer orders on hand, and we ship according to plan for... Everything is scheduled for the next two to three months. But for sure, introducing 2025s so early, they had discounts on their 2024, that for sure affected some retail. But we were surprised with the MSRP reduction, which we believe is not good for the brand. And we decided not to follow, because obviously we are in this business for long term, and I think it would be wrong to follow for our brand, for the dealer business and our business, and for our long-term profitability. Then it's a short term, it's a short-term blitz, and we believe what we're doing is the right thing to do for the mid to long term. Thank you very much. Thank you. Next question will be from Xian Siew at BNP Paribas. Please go ahead. Hi, guys. Thanks for the question. You kind of mentioned that other competition were a bit slower to reduce shipments. I guess, like, how do you think the industry will look exiting the year? Like, are the competition also kind of taking the right steps in your view, or such that you think, like, the whole industry could be, you know, inventories could be down 15-15 or so%? Or how do you think about where the whole industry exits inventory? Thanks. Yeah, you're right. Obviously, part of what's happening right now is that many OEMs started the year with probably better industry and volume assumptions, and some were late to adopt, adapt to the softer trends that we've been experiencing, and that resulted in more inventory out there and more aggressive promotions. Hopefully, that inventory gets liquidated in the near term. Even with softer trends, if they were to persist next year, we believe that OEMs and dealers will be better aligned in terms of wholesale coming in and retail coming out, and that should help. As for ourselves, we expect to be in a better position and on the offense. This year, we're making a big correction to our RV inventory in the network, and we're well on track. You saw inventories are down 13% since Q4, so we're making very good progress. And so if that trend continues, we should be in a better position next year, where we'll be more balanced in terms of wholesale and retail. Okay, got it. Thanks. I'll pass it on. Thank you. Next question will be from Mark Petrie at CIBC. Please go ahead. Hey, good morning. I guess just following up on that inventory question. I think you called out it's up 3% year over year. But just looking back at the last quarter, it looked like you guys had planned for it to be down, you know, call it mid-single digits or maybe high single digits, by the end of Q2. So, obviously, you have different levers in terms of addressing that. You know, the lower shipments clearly is what is in guidance, but you also have the lever of higher incentives. So I'm just wondering, like, what would it take for you to sort of move into a step function higher in terms of promotional investment to clear inventory? Yeah, the main element in the second quarter, Mark, is the personal watercraft industry, which was softer than what we have expected. So the miss versus where we were expecting to end in Q2 is related to personal watercraft. And as I said in my, in one of the questions that I answered, we expect personal watercraft shipments to be softer next year as we work through that inventory. Some of it's happening in the back half of this year, and some of it's going to happen as well next year. But from a promotional side, we believe we're competitive. We have enough tools out there to make sure that we support our brand, support our dealers, and allow them to match other OEMs and what they offer. Okay, appreciate that color, and I guess, maybe sort of a related question. Can you just help us understand how you arrive at the target of 15%-20% inventory reduction by year-end? And then also, like, what would that, like, versus sort of historical slower demand periods, what would that imply in terms of, you know, units per dealer or, you know, maybe units as a, you know, related to market share or, or however you think about that sort of inventory penetration? ... Yeah. Then, first, you need to make a difference between the seasonal product and the year-round product. The seasonal product, let's say, watercraft and snowmobile, we have a target of about 10% of next year's retail. Then basically, we believe, and this is a discussion we have with a dealer, if a dealer sell 100 snowmobile, it's normal to end the season with 10 units for the following season. That's the ballpark that we're looking at as a proxy. Then for seasonal product, watercraft and snow is very different, and I would include in there the boat industry, the marine industry. For a year-round product, like three-wheel, side-by-side and ATV, we're looking at it on days of inventory, forward days of inventory. The dealer's a year. Its retail is going every month, and there is like two high seasons, the spring and the fall, and we're looking to be around 90 days of inventory forward retail. And there is some fluctuation depending on the region. But every dealer has that objective of being around 90 to 100 days of forward retail, depending on his region, but it's dynamic. We have this map for all the dealers depending on more sport, more utility, and this is the way we'll look at it. And this is roll up to the target that we had. This is how we came out with the 15-20% to come back for seasonal and year-round product in those proxy. Okay. That's excellent color, José. I appreciate that. I guess maybe just my question would be then, like, would that 15-20, would that not have changed, just given the deterioration in demand that you saw through Q2 and into the first part of Q3? Like, I would have thought that that number might have come down just based on the parameters that you just provided. We still want a good unit representation in the network. And so even though we were planning for softer industry, the 15%-20% also factored in higher interest rates, where dealers are feeling some pressure, higher MSRPs as well. In relative terms, we'll still be lower, despite market share gains, than where we were pre-COVID. As José said, the 90 is a target, but could we be at 90-100 days? We're still comfortable with those levels, and that's why staying at the 15%-20% target is something that we believe was the right thing to do for the business, despite softer industry forecasts. Yeah. Okay. Got it. Thanks, guys. Appreciate the comments and all the best. Thank you. Next question will be from James Hardiman at Citi. Please go ahead. Hey, good morning. Thanks for taking my question. So, I wanted to circle back on the question about sort of an early look at fiscal twenty-six, as difficult as that may be. Obviously, you guys had the guidance bridge the last couple of quarters. We scrapped that, and I can certainly appreciate why. That was getting a little bit too convoluted. But I guess maybe most significantly, is there a way to put a dollar value around the magnitude of the inventory reduction, i.e., you know, I know it's too early to tell, but if wholesale equaled retail next year and retail was pretty flat, like, what, how much earnings power would you get back in that scenario? But, you know, when we started the year, our first call in March, we said that it was a correction. 2024 was a correction year. We had the bad winter, but 2024, we all believe, was a correction year. Now, with the trend that we have in Q2 and what we're planning in H2, it will be more probably a correction period, for sure the next 12 months, probably next 12 to 18 months will be still a correction period. As I just said, we want to deplete inventory this year, to be at the right level for seasonal and year-round product. And next year is too early to call. I mean, with all the macroeconomic situation, the interest rate are starting to go down, but it's not. It would be interesting what the U.S. Fed will do in September. This is definitely positive, but it will take a while before we're coming back to the level, a reasonable level. Then I think there is too much factor out there to commit on anything for fiscal year 2026. Yeah, in terms of quantifying the impact, yeah, in the Q1 or Q4 call there, when we launched initial guidance for this year, I referred to the inventory correction that we were doing about an impact of $3-$4. And so again, in a situation where industries are normalized, there's no inventory depletion, is that a potential tailwind that we have to our earnings? That would be how I would still frame it. Okay. And a follow-up to that. Any other big offsets we should be thinking about in terms of that bridge? And then I guess my second, my, I guess my follow-up question would be the interest rate piece. You know, obviously, the Fed is set to pivot here in a meaningful way. It doesn't seem like you're assuming that that will help your business much, particularly as we think about the commentary for the first half of next year, not really getting any better. And so is that you're just not building any of those interest rate cuts in, or you are making some assumptions about interest rate cuts, you just don't think that's gonna make much of a difference in the sort of medium term? For our financials, interest rate cuts are gonna help. They're gonna help the floor plan costs. We are obviously if we look at what's expected in the market. Yes, that's gonna help on the floor plan side. On our financing costs, it's gonna help, but we have interest rate caps that are falling off next year. Even if we build in rate reductions, we'll probably have a headwind coming from interest rates next year because these caps are rolling off probably, let's say, CAD 10-15 million. From a dealer point of view, it's gonna help as well. I mean, their floor plan expenses are gonna be lower. Buy downs of interest rates for us are gonna be lower as well on the retail financing side. And for sure, from a consumer point of view, if we get several rate cuts, this year and next year, that's gonna help as well. But is it gonna move the needle? Is it gonna remove some of the macro concerns that we're seeing today? It would be too early to call. Got it. That's helpful. Thank you. Thank you. Next question will be from Cameron Dirkson at National Bank Financial. Please go ahead. Yeah, thanks. Good morning. I just wondered if you could sort of frame how should we think about some of the operating expense line items for the rest of the year? Obviously, R&D was lower in Q2. You cited the, I guess, R&D subsidies hitting the quarter there. So just can you just talk a little bit about what you see the back half of the year on those operating expenses. Yeah. R&D and SG&A? Yeah, obviously a bit of movement. But again, if I look down the P&L, the gross profit-wise, I'd expect probably gross profit to be flat to maybe down in the second half of the year versus what we saw in the beginning of the year. First four, first six months of the year, gross profit margin was at 22.1%. And then in terms of OpEx, obviously, there's gonna be some OpEx movement, but relatively flat year over year as well from an OpEx side. Okay. And as you sort of look ahead to next year, I mean, one of the things you sort of mentioned earlier in the call was around adjustments to the cost base to kind of offset, you know, further weakness here. I guess, what can you do across the business to reduce costs to try to offset some of the weakness on the demand side of the equation? I mean, without going into detail, there is always in a company like us a lot of projects going on in different country, different area, and obviously we will relook at the whole list and reprioritize the next eighteen months going to a more slowdown than what we had anticipated. The other element is from the operations. Again, we're planning more conservatively for next year with softer industry trends. That means our operations people will plan accordingly. This year it's been challenging for them, but they've actually done a very good job. When you do sequential adjustments to production, it's tough for them to run their shops as efficiently as possible. That is certainly another lever that we have. Also, as you know, there's been a lot of inflation, a lot of management of COVID needed to happen in the last three, four years. Now we can focus on reducing bill of materials through cost improvement initiatives, and that's gonna be another important driver of efficiency. Okay. So that process is, obviously, you're that's ongoing, but maybe we'll see some of the benefits more so in fiscal 2026 as opposed to this year? Yeah. Absolutely. Okay, great. Appreciate it. Thanks very much. Thank you. Next question will be from Jonathan Goldman at Scotiabank. Please go ahead. Hi, good morning, and thanks for taking my questions. On the consumer side, the weaker demand trends that you're seeing, do you think that's more a function of consumers delaying or deferring a purchase? Or is it lacking the ability to make a purchase in the first place? And in either case, what sort of rate relief would you need to see to spur consumer demand? And just to give you some consumer behavior or trend, you know, pre-COVID, 20% of our units were sold to new entrant. In the peak of the COVID time, it did go up above 30%, and now we're back to the 20% ratio. Then we're back to pre-COVID level. 20% of our units basically are sold to new entrant. What is interesting is the split between high-end technology and innovation product versus entry-level. We see, and I will just give you some data for watercraft. Our entry-level retail in Q2 was down high double digit, when our high-end was down high single digit. You can see that on watercraft, all the Spark category and the GTI category was hit harder versus the high end. On side-by-side, same thing. If you look premium versus value, the premium was up mid-single digit, when the value was down mid-double digit. Then the trend is that you see that. The trend that we saw in the last few quarter is continuing. I would say now, what's new is the entry-level trend, and there is more customer entry-level trend customers who finance their product that are refused credit. We hear that more often, and this will come back when the interest rate will go down. That's great color. Then, José, you talked about potentially gaining share in ORV in season twenty-five. Is your expectation you can gain similar levels as you did this year? Yeah, I would not venture committing on any numbers, but the point is, right now we are in the period where it's transitioning from model year 2024 to 2025. We start producing 2025 for ATV side by side this month, end of July, beginning of August. Then we are in that transition where, depending on the inventory, depending on the program and the noncurrent, there is a play there. But that's why when this transition is done, typically take a quarter or two, after that, we will compete again, model year to model year, and we believe we have the right product to start with, and we have, obviously, the right program to continue our momentum. Yeah, and just to highlight on ATV, if you look at our ATV lineup, we've completely refreshed the whole lineup in the last 18 months with the introduction of a mid-level platform 18 months ago, and now we have the high CC platform that we recently introduced as well. So from a product point of view, we're extremely competitive with a lot of new features, and there's been very little innovation in the last 10 years on the ATV industry. So that obviously bodes well for the next season. That's good. Good. Thank you for taking my questions. I'll get back with you. Thank you. Next question will be from Jamie Katz at Morningstar. Please go ahead. Hi, good morning. So could you guys give us some insight as to how dealer financing rates have changed? I'm wondering if they've moved down, similarly to mortgage rates and, you know, if the demand has still sort of languished while those rates are moving down, or is that rate generally a little bit stickier to sort of SOFR? Yeah, the rates are actually pegged to SOFR, so they haven't yet to move down. Obviously, there should be some positive news in the next few weeks. Hopefully, that's going to be announced. That is certainly going to help the U.S. dealers. But as of recently, they've been stable at the levels in the last few quarters. Okay. And then when we think about assessing secular demand changes, I think it would be interesting to hear how maybe something like Uncharted Society demand has changed, in the recent period. Has that sort of kept up given the limited requirement for ownership in it? And otherwise, have you seen any other patterns coming out of that business? I don't have the latest data, to be honest, this morning, but I didn't heard anything. You know, the goal of Uncharted Society is to team up with the best rental operator around the world to make sure we're offering a top-notch experience for our consumers. And like we say internally, it's put butt on seat, because every time you try our product, we believe we have a great success to converting in sales. But I didn't have new numbers to see if I didn't heard anything that their business slowed down drastically lately. Perfect. Thanks. Thank you. Next question will be from Luke Hannon at Canaccord. Please go ahead. Thanks. Good morning. Just one question on my end here. If we go back to last quarter, if I remember correctly, José, I think it was roughly two-thirds of the units that you had retailed during the quarter were current versus noncurrent. Where did that stand this quarter, and how does that compare to the industry? Yeah, as I said in my prepared remarks, we are actually successful in retailing noncurrent units in the quarter. At the end of the quarter, what I could tell you is the overall inventory in the network, about 75% of the inventory was current. It was a bit lower because snowmobile, as you know, we finished the season last year with higher snowmobile inventory that becomes noncurrent. As for ORV, the inventory in the network was 90% current at the end of July. So we're in a very good position there. Great. Thank you very much. Yep. Thank you. Next question will be from Brian Morrison at Cowen. Please go ahead. Good morning. Thank you very much. So Seb, I appreciate the color on Mark's question on the 15%-20% inventory reduction. Can we just take it one step further? If you target 90 days of inventory, where are you now? Because I have you around 135 days, and if I add back the destock to forward revenue, I still have you about 120. Can you just share with us where you are now? Yeah, no, we're lower than the 135, and I again, I'd have to check where you get your numbers. We are lower than the 135. If you compare it to our wholesale, obviously, our wholesale is lower than what's happening in retail, so that's probably why you're getting higher numbers. As I mentioned, we made good progress. We're already in. Inventory is already down 13% since the beginning of the year, and so we're in very good shape to deliver our 15%-20% for the end of the year, Brian. ... Okay, I understand. Can you give us a ballpark of where you are or no? The ballpark is 30% down. So that's pretty precise in terms of number. Okay. I'm talking in terms of days, but for next question, Seb, in terms of your liquidity, I understand it's very good, but is there a target leverage that you don't want to exceed? I think you had a target of one and a half times to two times previously. Yeah, well, we want to keep in normal circumstances one and a half times to two times because we want to have that flexibility and we know that in a situation where there is a slowdown and we need to correct delivery that the leverage is going to go up. But when we IPO-ed, we were three times levered and we operate at that level, and we were very comfortable operating at that level because our debt is covenant-light and the maturities have been extended, and so we have no short-term financial commitment that is going to distract the organization from focusing on operations versus managing cash flow. And so, Okay. Could we run at three times, three point five times? In the current context, where, with our treasury team earlier this year, we extended the maturity of the revolver and the Term B, I'm super comfortable operating at those levels. Okay. And then last question, maybe José, do you have any insight right now into the used market? We don't have much data on this, on the used market, but obviously, I think, you know, during the COVID, a lot of consumer purchase product at, I mean, above MSRP price, and this is cleaning out slowly. It takes a while for a customer to accept a loss, a bigger loss than he was expecting on his used unit, but this is, I would say, stabilizing right now, but I don't have a specific data to share with you this morning. Okay. Thank you very much. I appreciate the actions you guys are taking. Thank you. Next question will be from Fred Wightman at Wolfe Research. Please go ahead. Hey, guys. Good morning. I was just hoping you could unpack the changes to the full-year guidance. I mean, to your point, that's sort of where the biggest chunk of the full year outlook adjustment comes, but there are some different subcategories within that. So could you sort of give us an order of magnitude where you're making the biggest changes? Yeah, good morning. We made an adjustment to year-end product revenue guidance. There, if I look at the midpoint by about, what, CAD 665 million. The year-end products is a big business. About 50% of revenue is in the second half of the year. And the ORV industry is where we've made the biggest adjustments, because that's where we're seeing more softness, and we want to be cautious, obviously, on our shipment plan. About 80% of the adjustment we did is on side-by-side, and the rest equally distributed between ATV and three-wheel. But again, as I mentioned, we want to be cautious, but yet we're still very bullish on the prospects of ORVs. As I mentioned earlier, coming out of the club, the new ATV platform, very well received. The Maverick R Max as well, which is 60% of the super sport industry for side-by-side. That was super well received, and also the new Defender with the upgrades that we did on the Defender Cab. Plus, we have also great product news coming out next year for the ORV business, but we're anxious to announce that. And so we're still very bullish despite making a sizable adjustment on ORV this quarter. Great. Thanks a lot. Thank you. A reminder to please press star one if you have any questions. Next is Tristan Thomas-Martin at BMO Capital Markets. Please go ahead. Morning. Just one question on PWC. You said you're gonna kind of end the season with some carryover inventory. The selling season itself is ending, so I'm assuming there's a lot of floor plan support, kind of baked into your guidance and potentially early next year. Is that right? And then is there any way to quantify how much that is? Yeah, the watercraft, just to explain the dynamic that happened, season twenty-four, there is two element. First, we're surprised by the magnitude of the industry decline. Again, at the end of May, we were on our plan, low number, but the trend, the trending was half plan. And I think when we had the call, we mentioned that, Memorial Weekend, at the end of May, was softer than typical. But following that, June, July was very, very soft summer retail. In fact, it was the lowest Q2 industry retail in eight years. Then it, it's. You can see how magnitude was bad for June and July. And this is the industry. And on top of that, and it was anticipated, but it was worse than anticipated. As you remember, in twenty twenty-three, our main competitor on watercraft shipped very late his new product. We gained significant market share in that product category. He end up with more non-current than what we had planned, and this year, when we had a lot of non-current, and he had more non-current than us, we've lost more share than in the non-current category than what we had anticipated. To be honest, our planning was probably too optimistic, and this is the two element that affected our watercraft retail this season. That being said, we ending the season with close to 60% market share. I mean, we cannot not be happy about this though. We just need next summer to readapt our shipment and balance the inventory out there to continue on this very good business. Yeah, okay. I understand that. Yep, I guess what I was asking was, with kind of the winter coming, dealers maybe having a little too much PWC inventory, is there incremental floor plan support? Yeah, we- Is there any way to quantify how much? Yeah, we do provide additional floor plan support, depending on the dealers, depending on how much more inventory they have, in their yard, and we do provide support until early next year, but you'll appreciate that for competitive reasons, I'll hold back from disclosing any amount, but it's all provided for in the guidance. Got it. Thank you. Thank you. At this time, we have no other questions. I will turn the call to Monsieur Deschênes to close the meeting. Great. Thank you, Sylvie, and thanks everyone for joining us this morning and for your interest in BRP. We look forward to speaking with you again for our third quarter conference call on December sixth. Thanks again, everyone, and have a good day. Thank you. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending, and at this time, we do ask that you please disconnect your lines.