US powersports manufacturer Arctic Cat has reported drastically worsening losses in first-quarter results to 30 June.
The Minnesota-based company, which has a wholly-owned subsidiary distributing its quadbike and side-by-side ATVs in the UK, saw global revenue for the period decline by 22% to £79.4m. ATV sales were 17.3% down to £33.1m and snowmobiles fell by 30.4% to £30.3m. Parts, apparel and accessories were 11.5% down at £15.6m.
That inflicted an operating loss of £13.1m, against a loss of £1.1m in the same period last year. Similarly, net loss grew from £832,000 in 2015’s first quarter to a painful £8m.
Arctic Cat chief executive Christopher Metz blamed this dire state of affairs on the weakening US market creating “a more competitive retail environment that led to higher promotional spending than planned” and the strong dollar undermining the value of exports.
Inevitably, though, he added a positive spin: “Importantly, we made progress on reducing dealer inventory, and further strengthened and expanded our dealer base. We continue to focus on implementing our strategies and are encouraged by the significant progress we are making to reposition the company for long-term growth. We anticipate reporting stronger financial results in the second half of this fiscal year, driven by planned new product launches and contributions from our other key strategic initiatives.”
Nevertheless, he forecast that any improvement would be in terms of a reduced annual loss, rather than a return to full-year profitability.