Overall numbers for US powersports giant Polaris Industries still looked quite good nine months into 2021, with an apparently consistent growth trajectory for its minority motorcycle business at least. But recovery for the company’s key off-road vehicle (ORV) sector began to unravel drastically in Q3, as component shortages struck hard. BDN financial editor Roger Willis reports.
Three-quarterly revenue across all Polaris divisions climbed by 23.7% to £4.382bn. Operating profit reached £403m, bouncing back from an operating loss of £36.7m in the same period last year. Net profit recovered to £296.3m, from a net loss of £53.7m. ORV sales, including snowmobiles, rose by 22.5% to £2.732bn. Revenue from motorcycles, encompassing the Indian and Slingshot brands, was 31.5% up to £415.9m.
But Q3 results told a different story. Total group revenue flatlined, rising by just 0.3% to £1.425bn. The quarterly motorcycle contribution had maintained firm wholesale positivity, adding 16.5% to £141.3m, although retail sales had evidently dropped by 12%. However, ORV turnover also based on wholesale shipments sank by 6.2% to £878.4m.
Worse, Polaris admitted that North American ORV retail sales had decreased during the quarter by about 24%, Side-by-side vehicles had taken the brunt of this decline, with quadbikes losing around 20%. The excuse for both motorcycles and ORVs was lack of product availability in dealerships due to parts supply-chain issues. Â
And given these constraints, the company announced reductions in its full-year 2021 adjusted earnings and sales guidance. That went down like a lead balloon on Wall Street, where investors wiped 7.9% off Polaris shares on the day these results were published.
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