Wednesday, June 19, 2024
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WEAK SHOW FROM POLARIS

Substantial revenue improvement concealed a challenging first quarter for US powersports manufacturer Polaris, writes BDN financial editor Roger Willis.

During the opening three months of its 2019 fiscal year, turnover grew by 15.3% to £1.156bn. But operating profit was 1.6% down to £63.3m and net profit slumped by 13.2% to just £37.4m.

Revenue in the company’s core off-road vehicle (ORV) and snowmobile division was 4.2% up to £670.6m, driven primarily by an increase in ORV wholesale pricing. But as usual, Polaris obfuscated the detail and avoided revealing product volume figures.

Total North American ORV retail sales dropped by a “mid-single-digit” percentage, which presumably means about 5%. Within that, side-by-side ATVs were down by a “low-single-digit” percentage and quadbikes fell by a “low-double-digit” percentage. Being kind to under-educated accountants in the wilds of Minnesota, we assume they think that represents around 12%. But it might not, considering 99% is a “high-double-digit” percentage.

The smaller motorcycle division suffered greater woes. Quarterly revenue was 10.3% down to £91.2m. Declining Slingshot trike sales were held largely responsible but Indian cruisers also took part of the blame.

In North America’s struggling bike market, combined retail sales of the two brands were described as shrinking by a “high-single-digit” percentage. Indian was assaulted by a “mid-single-digit” percentage fall while Slingshot went backwards by a “low-double-digit” percentage.

Polaris actually trousered better revenue from its recently acquired boat business in the period — £142.9m — than it did from bikes. And boats were five times more profitable at gross level.    
 

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