Polaris yet again reported record quarterly results with first quarter 2015 sales reaching $1,033.3 million, up 16% compared to the previous year. Operating income increased 19% to $150.3 million during the 2015 first quarter. Currencies in the 2015 first quarter had a $32 million negative impact on total company sales versus Q1 of last year. Here are some of the highlights related to the STOV market. Comparisons are between first quarter 2015 to first quarter 2014, unless otherwise stated. The highlights have been updated following the earnings conference call with analysts.

• Off-Road Vehicle (ORV) sales, which includes UTVs and ATVs increased 11% to $645.4 million.
• ORV inventory increased primarily in the ATV segment.
• Polaris North American ORV unit retail sales were up mid-single digits percent, with consumer purchases of Rangers and RZRs each increasing from the first quarter last year.
• RZR sales are stronger than Ranger sales but the latter grew “nicely”.
• North American ATV retail sales decreased low-single digits percent due to heavy competitive promotional spending during the 2015 first quarter with ACE up significantly.
• Management reports a “fair amount” of wholesale discounting by competitors but this is not expected to continue. Promotional activity is more pronounced for ATVs but is occurring for side-by-sides as well.
• Management sees the Hammerhead brand acquisition as a good way to attack the value end of the UTV market.
• North American industry ORV retail sales in the first quarter 2015 increased an estimated mid-single digits percent according to management.
• Sales of Polaris ORVs outside of North America decreased 10%  primarily due to weak economic conditions in the Europe, Middle East and Africa (EMEA) region, as well as the currency impact of a strengthening U.S. dollar.
• ORV industry in EMEA region grew mid-single digits in terms of volume but was driven by smaller value products and discounting.
• Average sales per ORV unit increased 7% in the quarter.
• The Eicher-Polaris JV will begin shipping the new utility vehicle in Q3.
• Global Adjacent Markets, which includes GEM, Aixam, Goupil as well as government and military sales, increased 7% to $65.4 million.
• Government/military group experienced double digit percent sales growth during the 2015 first quarter.
• Work and Transportation (W&T) group sales (part of Global Adjacent Markets) increased mid-single digits percent with North American W&T sales increasing double digits percent while W&T outside North America declined partly resulting from lower Aixam sales in EMEA due to the impact of negative currencies.
• North American W&T was up over 30% on strong partnership shipments, national account growth and 40% GEM retail increase.
• Brutus retail increased low double digits in volume but revenue was hurt by promotions and the loss of some dealers. The PTO and high end models are performing well but base models are underperforming.
• Goupil and Aixam increased shipments and future orders are up 20% but currency headwinds remain a drag.
• Aixam made market share gains in a flat industry performance.
• Defense revenue grew double digits on strength of M RZR in international markets and DAGOR shipments to special forces.

Guidance for the Year

• Global adjacent market sales are now expected to grow 5% to 10% and total international sales are now expected to decline low single digits percent.
• ORV’s are expected to increase mid-single digits percent after growing 11% in the first quarter benefiting from a 7% increase in the average sales per ORV unit.
• Currency changes are expected reduce full year 2015 revenue by $140-160 million.

Learn more:  Seekingalpha.com (Earnings call transcript)