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Polaris Industries Nets Record Q1 Results

Friday, April 26, 2013
Polaris Industries has reported its best quarter on record. Powered by the continued success of its side-by-side division, the Minnesota-based powersports company recorded net sales of $745.9 million for the quarter, an 11% increase from $673.8 million last year. Net income rose to $75.5 million ($1.07 per share), up from $60.1 million (0.85 per share) in 2012.

“We are pleased that consumers and enthusiasts around the world continued to make Polaris their brand and product of choice during the first quarter of 2013,” said Polaris’ Chairman and CEO Scott Wine in a company press statement. “While Off-Road Vehicles and motorcycles faced challenging 2012 comparisons, we were again able to outpace the industry and increase market share in both product lines. Our snowmobile business also generated strong retail sales and market share growth during the first quarter.”

The 2013 BRUTUS is ready to work when you are.
The side-by-side boom continues to fuel Polaris Industries, which expands its UTV lineup with the new BRUTUS.

Driven by ORV Sales

The Polaris cash cow continues to be its side-by-side models. Polaris dubs its popular Ranger and RZR models “Off-Road Vehicles” and the ORV division grew 7% year-over-year. Polaris ORV sales accounted for $541.3 million of the $745.9 million in total Q1 sales. The fact is made more impressive by the fact that Q1 in 2012 was a banner year for Polaris side-by-sides, up 20% that season.

ATV sales are down, though Polaris doesn’t specify the percentage decline. It does claim, however, that despite the slight dip its market share increased, as the overall ATV market has slumped compared to the bullish 2012 Q1. Polaris claims increased market share in the side-by-side market as well, which it already dominates. It reckons that industry ORV sales have declined single digits from 2012, with ATV down double digits.

Polaris will look to capitalize on its ORV success with the debut of its BRUTUS commercial utility vehicles. A co-developed product with Bobcat, the BRUTUS side-by-side line resembles the popular Ranger UTV models – but features multiple tool attachments.

Future ORV plans include the creation of a production facility in Opole, Poland. The location will enhance Polaris’ ability to meet demand in the European market. The facility will have broken ground in Q2 with plans to be fully operational by 2014.

Motorcycle Sales Down

The company’s On-Road Vehicle sales tallied $62.9 million for the quarter, a 3% drop compared to 2012. Victory and Indian models make up the On-Road Vehicle sales, along with Polaris’ electric vehicle brand acquisitions – GEM and Goupil.

Polaris cites the decline of Victory sales in Q1 as symptomatic of the particularly strong quarter last year, with unseasonably warm weather driving brisk sales. The company claims that Victory sales decreased in Q1 “albeit less than the overall industry, resulting in continued market share gains.”

The company also touts its new launch of the Indian brand. Polaris revealed an all-new powerplant for the iconic American brand, the Thunder Stroke 111.

As for the aforementioned GEM and Goupil electric vehicle brands, Polaris claims double digit percentage increase in sales thanks to improved distribution in Q1.

PG&A Pays Out

Polaris hauled in $127 million from its Parts, Garments and Accessories (PG&A) division – more than double the On-Road Vehicle sales and 27% increase year-over-year. The company credits across the board double-digit growth in all divisions, with the increased snowfall this year boosting exceptional success for snowmobile PG&A. Polaris also benefitted from the additional sales of one of its most recent acquisitions, powersports apparel company KLIM.

Snowmobiles Boom

First quarter snowmobiles sales of $14.7 million more than tripled last year’s $4.6 million – up 217%. In its domestic North American market sales are up 20%, credited to new model releases and late snowfall. The company also attributes the spike to strong performances in key international markets in Scandinavia and Russia.
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