Polaris Industries reported third quarter 2017 sales of $1,478.7 million, up 25 percent from $1,185.1 million for the third quarter of 2016. Off-Road/Snowmobile segment reported sales of $1.01 billion up 12% and Global Adjacent Markets, which includes GEM, Taylor-Dunn and Aixam among other brands, increased 17% to $91.5 million.
It was a strong quarter for Polaris, in part, because it is being compared to a weak third quarter in 2016 and aided by higher promotional spending. On the other hand, management reports that the quarter also compared favorably to their 2015 third quarter, which was the last quarter before recall issues hit them hard. Looking behind the numbers a more accurate description may be a solid quarter that shows Polaris has stemmed the tide and gaining momentum again in the side-by-side and ATV markets. The following are highlights from the earnings call related to side-by-sides and other small, task-oriented vehicles.
- Side-by-side wholesale sales were strong worldwide
- ORV retail sales in North America were up mid-teens percent with both side-by-sides and ATVs up mid-teens
- Management reports gaining market share in RZR, Ranger and ATV segments
- ORV industry sales in North America increased high single digits percent for the quarter
- The oil & gas and farm markets improved but are neither a drag or driving industry growth
- ORV retail was up double digits in September as momentum carried through the quarter
- RZR retail sales were very strong in the quarter as well as ATV sales
- The Ranger XP 1000 was launched during the quarter
- Strong promotional spending helped drive sales during the quarter but Polaris performed well relative to other manufacturers with similar spending.
- Promotional spending was also used to help clear out inventory before new model year arrivals.
- Management reports strong dealer orders for the Ranger XP 1000 and the RZR Dynamics products
- In Europe Aixam quadricycles and Goupil light utility vehicles grew 17% for the quarter at the wholesale level
- Total company sales are expected to be up in the range of 18% to 19% with increased guidance for ORV/Snowmobile sales, which are now expected to increase in the mid-single digit range year-over-year
- Global Adjacent Markets guidance is increased to low double digits due to strong sales across the portfolio
- Lower promotional spending is expected in the 4th quarter compared to previous year and quarter
Learn more: Seekingalpha.com (Earnings call transcript)
Marc Cesare, Smallvehicleresource.com