Arctic Cat Reports Earnings For Fiscal 2015 2Q

Despite weak ATV sales, side-by-side revenue increased as Arctic Cat Wildcat Trail models continued to sell well.

Despite weak ATV sales, side-by-side sales increased as demand for Arctic Cat Wildcat Trail models remained strong.

Arctic Cat reported revenue of $262.5 million for the fiscal 2015 second quarter, an increase of about 10% from last year. Sales were driven by their snowmobile and parts, garments and accessories (PG&A) divisions which offset weakness in their ATV business that includes ATVs and side-by-sides. The ATV business declined 4% from the previous year’s quarter and 10% year to date. The company fell short of their expectations for ATV sales but strong sales continued for their Wildcat side-by-side models. There was also a significant charge for a recall of some of their older ATVs. Some highlights of the earnings call as it relates to utility vehicles/side-by-sides include:

  • 15 new 2015 model year ATVs and side-by-sides were unveiled in the quarter
  • Demand for their side-by-side products remains strong driven by the Wildcat Trail line and recently introduced Wildcat Sport
  • Wildcat sales also helped generate revenue for the PG&A business
  • Management reports Arctic Cat is outperforming the overall side-by-side market

Learn more: (earnings call transcript)

Comment:  Despite weakness in their ATV business Arctic Cat remains a strong competitor to Polaris in the high performance segment of the side-by-side market. They are particularly strong in the trail sub-segment where the vehicles are narrower to allow access to legacy ATV trails.

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