International Dealer News IDN 144 August/September 2018 | Page 23

THE AMERICAN REPORT
Polaris reports 2018
second quarter results
Minneapolis based Polaris Industries,
owner of Indian Motorcycle and the
market-leading ATV, SxS and
snowmobile manufacturer, reported
Q2 sales of +10% to $1,503 million;
net income +47% at $1.43 per diluted
share; north American retail sales of
+6% for the quarter; and north
American ORV (ATV and SxS) retail up
mid-single digits % with market share
gains for both.
Taking into account improved volume
expectations and the acquisition of
Boat Holdings, LLC (its first venture
into the marine sector), Polaris
increased full year 2018 sales
guidance to be up between 11 and
12% and adjusted its full year
earnings per share expectations
downwards to allow for the
absorption of an estimated additional
$40 million of tariff and related
commodity cost increases for 2018.
Motorcycle segment sales, including
PG&A, totalled $171 million, down by
-13 percent compared to $198 million
reported in the second quarter of 2017
due to a weak domestic U.S.
motorcycle industry and timing of
shipments for Indian motorcycles year-
over-year; Slingshot sales were also
down. Segment gross profit was up at
$25 million, but down when adjusted
for Victory wind-down costs.
North American Indian Motorcycle
retail sales increased mid-single digit
percent; Slingshot's retail sales were
down mid-single digit. Domestic U.S.
motorcycle industry retail sales of 900
cc and above were down mid-single
digit percent in the 2018 second
quarter, meaning Indian gained share
in a declining market.
International sales, including PG&A,
were +7% at $204 million due to
foreign exchange movements and
“strong sales in the company's EMEA
business for ORV and motorcycles”.
Scott Wine, Chairman and Chief
Executive Officer of Polaris Industries
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(in thousands US $)
Three months ended June 30 Six months ended June 30
2018 2017 2018
Sales
Cost of sales
Gross profit 1,502,532
1,117,356
385,176 1,364,920
1,014,534
350,386 2,800,005 2,518,702
2,091,348 1,925,825
708,657
592,877
Operating expenses:
Selling and marketing
Research and development
General and administrative
Total operating expenses
Income from financial services
Operating income
Net income 122,859
68,330
92,874
284,063
21,344
122,457
92,540 118,531
60,753
91,063
270,347
19,143
99,182
62,041 240,566
133,560
171,567
545,693
42,769
205,733
148,254
232,844
112,758
166,577
512,179
39,573
120,271
59,130
$0.97 $2.28
$0.92
Diluted Net income per share: $1.43
Scott Wine, Chairman and Chief
Executive Officer of Polaris, stated
that “consumer sentiment and
dealer traffic improved throughout
the Quarter, building momentum,
which will help offset the rising risk
of tariffs in the second half”
2017
Inc, stated: “I am very pleased with the
Polaris team and the strong execution
they delivered across the business
during the second Quarter. With solid
retail growth and market share gains
in both our Off-Road Vehicle business
and Indian Motorcycle, we are clearly
reaping the benefits of our safety and
quality investments, new product
innovations and improved delivery
performance. Consumer sentiment
and dealer traffic improved
throughout the Quarter, building
momentum, which will help offset the
rising risk of tariffs in the second half”.