International Dealer News IDN 143 June/July 2018 - Page 22

THE AMERICAN REPORT Polaris reports +12 percent sales for Q1 Polaris Industries reported first quarter 2018 sales of $1,297 million, up +12 percent from $1,154 million for the first quarter of 2017, with first quarter 2018 net income of $56 million ($0.85 per diluted share) compared with a net loss of $3 million ($0.05 per diluted share) for the 2017 first quarter. “We delivered record first quarter Off- Road Vehicle retail sales to begin the year, driven by innovation and improved dealer engagement. This translated into strong revenue and earnings growth for the quarter,” commented Scott Wine, Chairman and Chief Executive Officer of Polaris Industries. Polaris increased its full year 2018 sales guidance to up 4% to 6% and narrowed its full year earnings expectations by raising the lower end of its earnings per share range, and now expects adjusted net income to be in the range of $6.05 to $6.20 per diluted share, which includes the absorption of an additional approximately $15 million of commodity, freight and tariff costs anticipated in 2018. “We are fully prepared to build upon this early success and deliver solid growth for the full year. Our production flow improved steadily throughout the quarter and inventory, snow notwithstanding, is in great shape. With the recent introduction of the all new RANGER XP 1000 and the 72- inch RZR XP Turbo S, and a robust innovation pipeline, we are exceptionally well positioned to bring more customers into Polaris dealers. While we must overcome significant commodity, freight and tariff headwinds throughout the remainder CONSOLIDATED STATEMENTS OF INCOME (LOSS) (in thousands US $) THREE MONTHS ENDED MARCH 31 of the year, I am confident Polaris is taking the necessary steps towards becoming a customer-centric, highly efficient growth company,” Wine concluded. North American retail sales increased 3% for the quarter; ORV N.A. retail sales were up mid-single digits %, with side-by-side vehicles up high- single digits %. Gained market share in RANGER, RZR and Sportsman ORV brands during the quarter along with share gains in both Indian and Slingshot motorcycle brands. Total first quarter 2018 dealer inventory was up 6% year-over-year; ORV dealer inventory was flat. Motorcycle segment sales, including PG&A, totalled $132 million, an increase of nine percent compared to $120 million reported in the first quarter of 2017. I ndian Motorcycles wholegood sales increased in the low- double digits percent range in the first quarter of 2018, while Slingshot sales were down low-double digits percent. Gross profit for the first quarter of 2018 was a positive $17 million compared to a loss of $20 million in the first quarter of 2017. Adjusted for the Victory wind-down costs recorded in both the 2018 and 2017 first quarters, motorcycle gross profit was $17 million, or 13 percent of sales in the 2018 first quarter compared to $19 million, or 15 percent of sales for the 2017 first quarter, down on a dollar and percent of sales basis due to higher warranty expense for Slingshot. North American consumer retail demand for the Polaris motorcycle Sales Cost of sales Gross profit Operating expenses: Selling and marketing Research and development General and administrative Total operating expenses Income from financial services Operating income Net income (loss) segment, including Indian Motorcycle and Slingshot, increased low-single digit percent during the 2018 first quarter. Indian Motorcycle retail sales increased low-single digits percent. Slingshot’s retail sales were down mid- single digits percent during the quarter. Motorcycle industry retail sales, 900 cc and above, were down mid-teens percent in the 2018 first quarter. Both Indian Motorcycle and Slingshot gained market share for the 2018 first quarter on a year-over-year basis, in spite of unusually cold and wet weather in March and an overall weak N.A. industry motorcycle market in the first quarter. International sales to customers outside of North America, including PG&A, totalled $211 million for the first quarter of 2018, up 27 percent from the same period in 2017. Foreign exchange movements represented 11 2018 2017 1,297,473 973,992 323,481 1,153,782 911,291 242,491 117,707 65,230 78,693 261,630 21,425 83,276 114,313 52,005 75,514 241,832 20,430 21,089 55,714 (2,911) percent of the sales increase for the quarter. The remaining increase was driven by strong sales in the company’s EMEA business. Gross profit increased 33 percent to $323 million for the first quarter of 2018 from $242 million in the first quarter of 2017. Reported gross profit margin was 25 percent of sales for the first quarter of 2018 compared to 21 percent of sales for the first quarter of 2017. During the quarter, Polaris recorded charges of $20 million, including the impairment of the company’s equity investment in the Eicher-Polaris joint venture in India. The two partners have ended their relationship and ceased production of the ‘Multix’ personal utility vehicle. Eicher Motors is the parent company of Royal Enfield. Motorcycle Storehouse is exclusive UK distributor for RSD California based Roland Sands Design has announced that Motorcycle Storehouse UK has been named the exclusive distributor of its apparel brand in the UK. “The UK market is vital to our brand,” states Brand Director Rob Ramlose. “Having a dynamic partner like Motorcycle Storehouse UK gives us the bandwidth to grow the Roland Sands Apparel brand in a positive, upward direction.” “We are proud and excited at this opportunity to represent Roland Sands Design in the UK 22 market,” said Michael Oldekamp, Apparel Manager at Motorcycle Storehouse. “Roland is one of the industry’s most gifted and innovative customisers, inspiring motorcycle enthusiasts all over the world.” Roland Sands has stated that the transition should be seamless and wants to thank all their retailers for their support of the brand over the years and to assure them of their support through this transition. Any retailer with questions may contact the apparel group INTERNATIONAL DEALER NEWS - JUNE/JULY 2018 directly via Recent additions to the RSD apparel programme, ‘Launch’, ‘Truman’ and ‘Strand’ gloves, merge “the best performance, comfort and style”