Monday, June 24, 2024

GRIM FIGURES FOR POLARIS but bikes do well

Latest financial results from US powersports manufacturer Polaris Industries illustrate just how much damage product defects can do to an otherwise healthy business, after a series of ruinous ATV recalls.

During its third quarter to 30 September, total revenue fell by 19% to £971.5m. Principal culprit was the core off-road vehicle (ORV) operation — quadbike and side-by-side ATVs plus snowmobiles — which plunged by 23% to £757m. Motorcycles — Indian and Victory bikes plus Slingshot trikes — were 3% down at £150.2m. But that reflected late Slingshot wholesale shipments. Bikes, particularly Indian, actually performed well at both wholesale and retail levels.

Quarterly operating profit fell off a cliff, 76.3% down to £47m. Net profit was even worse, declining by 79.2% to £26.5m.

Polaris chief executive Scott Wine said: “Third-quarter results, while discouraging, were in line with revised guidance and reflect our ongoing execution of the RZR recalls. In addition to these recall challenges, we continued to face a weak overall powersports industry but were encouraged by retail strength for Indian and our overall motorcycle business, and the return to growth for side-by-sides in September.”

For the nine months of 2016 to date, Total revenue was 9% down at £2.7bn. ORVs dropped by 14% to £2.01bn. However, motorcycles were 13% up to £494.1m. Operating profit sank by 54.8% to £206.2m. Net profit was 56.4% down at £123.3m. 


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