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POLARIS LOOKS ON THE BRIGHT SIDE OF LIFE

Half-yearly and Q2 figures for Indian Motorcycle parent Polaris were inevitably a tale of coronavirus-afflicted woe. But strong resurgence for its US domestic retail sales of off-road vehicles (ORVs) and bikes helped to lift the gloom. BDN financial editor Roger Willis reports.

In the first half, total Polaris revenue declined by 10.9% to £2.249bn. An operating loss of £223.5m ensued, against an operating profit of £167.3m in the equivalent six months of 2019. Last year’s £105.2m net profit turned into a net loss of £185.6m this time around.  

Core ORV (quadbike, side-by-side and snowmobile) divisional turnover was 7.3% down at £1.37bn. Revenue from motorcycle operations (Indian bikes and Slingshot trikes) fell by 14.9% to £206.6m.

However, poor second-quarter performance concealed a silver lining. Production and wholesale shipments to dealers from both divisions had been heavily disrupted by plant shutdowns in April and to a lesser extent May. Therefore Q2 revenue from ORVs dropped by 9.2% to £734.7m and motorcycles were 28.2% down to £108.9m. But Polaris ORV quarterly retail sales across North America went ballistic, more than 60% up. And the Indian bike brand added about 15%. Once Slingshot was factored in, the motorcycle segment boasted retail growth of more than 20%. Combined with reduced shipments, US dealer inventory levels were slashed by 47%.

Waxing lyrical on this good fortune, Polaris chairman and chief executive Scott Wine said: “We overcame a near complete shutdown of both our dealers and the US economy early in the quarter to capitalise on unprecedented retail demand for our off-road vehicles and motorcycles through May, June and now July. Our broad array of best-in-class products provided an attractive social-distancing solution for both existing, and encouragingly, a wide range of new powersports customers.” 

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