A looming recession? Don't tell powersports vehicle manufacturer BRP (NASDAQ:DOOO) there's a recession on the horizon. All it sees is low unemployment, high consumer confidence, and a housing market in stasis, all indicators of a healthy buying market for the industry.

Powering ahead

BRP ripped past its competitors in the second quarter, reporting a 21% jump in revenue to $252.5 million as sales of three-wheeled vehicles led by its new Can-Am Ryker surged 90% for the period. In fact, the entire year-round products division, which also includes its side-by-side all-terrain vehicles (ATVs), was up 33% for the quarter.

BRP's Can-Am Ryker three-wheeler

The three-wheeled Can-Am Ryker is bringing younger riders to the powersports vehicle maker. Image source: BRP.

While rival Polaris Industries (NYSE:PII) also showed strong performance when it reported second-quarter results at the end of July, its off-road vehicle sales were up only 6%, and side-by-side sales were up by low-single-digit percentages. It's own three-wheeler, the Slingshot, continued its free fall, hampering the motorcycle segment's otherwise strong gains.

What BRP's Ryker has going for it is an exceptionally low price. Where the original Can-Am Spyder starts at $16,000 and the Slingshot has a base price of $21,000, the Ryker starts at $8,500, which is helpful in attracting younger people to the industry and the brand.

The average age of a Spyder buyer is 59 years old, but BRP is able to target 35- to 55-year-olds with the Ryker. That's key because the broader industry as a whole has been aging out, as anyone who's watched Harley-Davidson (NYSE:HOG) understands. Harley largely continues to charge a premium for its motorcycles, and though its Street 500 model starts at around $6,900, Royal Enfield recently introduced its Interceptor 650 that starts at $5,700.

To cater to the younger crowd, Harley introduced its LiveWire all-electric motorcycle, believing that's where those riders are heading. But it priced the bike at $30,000, making it available to only a select few. BRP is showing the industry it can attract young people to the powersports market if its builds exciting vehicles at affordable prices.

Like a fish in water

It wasn't just three-wheelers, though, driving sales higher at BRP. Sales of seasonal products like personal watercraft and snowmobiles jumped more than 11% in the quarter. Revenue rose 18% for parts, accessories, and engines (with the latter used in its own vehicles and sold to manufacturers that don't compete with BRP).

The relatively newer boat division of BRP's marine segment did see softer sales than expected in the quarter, which it attributed to unfavorable weather in the Upper Midwest. But CEO Jose Boisjoli says boating "is a long-term strategy" for the company.

It also closed on the acquisition last month of Australian boat maker Telwater, which it expects to offset the softness in the North American market, so it isn't changing its guidance for the division's sales growth of 17% to 22% this year.

A brighter outlook

BRP did raise the low end of its full-year guidance for the whole company, now expecting revenue to expand 10% to 13%, compared with its previous range of 9% to 13%, on the strength of year-round products. With ATV and three-wheeler sales so strong, BRP is looking for segment sales to grow 16% to 19% in fiscal year 2020, versus its prior outlook of 14% to 19% growth. Normalized EBITDA is expected to increase 21% to 23% for the year, versus the 20% to 23% prior forecast.

BRP has found its lane and is opening up the throttle, as it looks to gain on rivals like Polaris in the off-road vehicle market while surpassing industry trends as a whole. Wall Street has taken notice and pushed shares 20% higher since the earnings report. But with the stock still down 30% over the past year, there's a way to go to regain that lost ground.