Polaris First Quarter Results. Indian Motorcycle® Market Share Gains. ORV market Share Stabilizing.

Retail Sales Performance Exceeded Company expectations in the first quarter. Overall Sales Increased 17% to $1,153.8 million.Adjusted Sales Increased 18% to $1,158.9 million. (Note: the results and guidance in this release, including the highlights above, include references to non-GAAP operating measures, which are identified by the word “adjusted” preceding the measure. A reconciliation of GAAP to non-GAAP measures can be found at Polaris website.)

Polaris N.A. retail sales performance exceeded Company expectations in the first quarter; ORV market share stabilizing; Indian Motorcycle® market share gains continued during the quarter. First quarter 2017 reported net loss was $0.05 per diluted share; adjusted net income for the same period was $0.75 per diluted share, slightly ahead of expectations. Total dealer inventory was down 8% year-over-year; ORV dealer inventory was down 9%

Polaris reiterated its full year 2017 outlook with adjusted net income expected to be in the range of $4.25 to $4.50 per diluted share with adjusted sales for the full year 2017 expected in the range of up 10% to 13%.

Adjusted sales, which excludes the impact from Victory Motorcycles® net sales for the first quarter of 2017, were $1,158.9 million compared to $983.0 million in the prior year period. The Company reported a first quarter 2017 net loss of $2.9 million, or $0.05 per diluted share, compared with net income of $46.9 million, or $0.71 per diluted share, for the 2016 first quarter. The reported net loss included costs related to the wind down of Victory Motorcycles and certain TAP integration and inventory step up costs taken in the first quarter. Adjusted net income for the quarter ended March 31, 2017, excluding these costs, was $48.3 million, or $0.75 per diluted share.

“We saw continued strong performance from Indian Motorcycle and our ORV business improved its performance in the face of heavy competitive activity and a sluggish powersports environment. Overall, our dealer channel remains healthy with inventories down eight percent, and we continue to diligently work to enhance our dealer engagement,” commented Scott Wine, Chairman and Chief Executive Officer of Polaris Industries.”

Motorcycle segment sales, including its PG&A related sales in the first quarter of 2017, was $120.3 million, a decrease of 35 percent compared to $185.3 million reported in the first quarter of 2016 which included $46.3 million of Victory Motorcycles wholegood, accessory and apparel sales. Indian Motorcycle wholegood sales increased in the first quarter driven by strong retail sales, offset by lower Slingshot® sales which were negatively impacted by low availability of salable product due to quality holds during the quarter. Gross profit for the first quarter of 2017 was a negative $19.9 million compared to positive $27.3 million in the first quarter of 2016. Adjusted for the Victory wind down costs of $38.6 million, motorcycle gross profit was a positive $18.7 million, down from the first quarter last year due to product mix and lower Slingshot volume.

North American consumer retail demand for the Polaris motorcycle segment, including Indian Motorcycle and Slingshot, was down mid-single digits percent during the 2017 first quarter, while the overall motorcycle industry retail sales, 900cc and above, was down mid-single digits percent in the 2017 first quarter. Indian Motorcycle retail sales increased low double-digits percent and continued to gain market share, partly driven by sales of the Company’s new highly customizable, split-screen Ride Command™ touchscreen infotainment system available on Indian Chieftain® and Roadmaster® models. Additionally, during the quarter, the Company added its 10th model to the line-up with the introduction of the Roadmaster Classic with genuine leather saddlebags and trunk, giving it distinctive vintage styling. Slingshot retail sales were down significantly due to low product availability and a more difficult comparable as the Company released its top of the line Slingshot SLR model in the first quarter last year.

Global Adjacent Markets segment sales along with its PG&A related sales, increased 24 percent to $91.6 million in the 2017 first quarter compared to $74.1 million in the 2016 first quarter. Gross profit increased 38 percent to $28.1 million, or 30.7 percent of sales, in the first quarter of 2017, compared to $20.4 million, or 27.5 percent of sales, in the first quarter of 2016. Sales and gross profit were up primarily due to increased sales in the Company’s Government and Defense business in the 2017 first quarter which more than doubled from the previous year’s quarter sales. Work and Transportation group wholegood sales were up 12 percent during the first quarter of 2017 primarily due to increased Aixam® sales and a full quarter of Taylor-Dunn® sales compared to last year.

International sales to customers outside of North America totaled $166.2 million for the first quarter of 2017, including PG&A, up two percent, from the same period in 2016.

16 Responses to “Polaris First Quarter Results. Indian Motorcycle® Market Share Gains. ORV market Share Stabilizing.”

  1. 1 JohnnySpeed Apr 26th, 2017 at 9:22 am

    But how many units did they actually sell? Percentages don’t mean much without the core data to explain them.

  2. 2 BobS Apr 26th, 2017 at 10:02 am

    Well this puts an end to those BS speculations about Indian outselling Victory 10-1. Polaris cancels Victory and motorcycle sales are down 35% even though Indian sales are up 11-12%. Take into account they still sold 46 million dollars worth of heavily discounted Victory and without that their motorcycle sales would’ve been down by more than half. Indian got off to a great start with rapid growth, and the idiots in charge falsely believed that meant nobody cares about power, handling, and comfort. They think we’re all stupid and all we care about is heritage and retro fake old styling. They thought Victory was competing with Indian and by cancelling Victory we would all just go buy an uncomfortable, underpowered, poor handling Harley wannabe. Ever since Scott Wine replaced Mark Blackwell with Steve Menneto shits been going downhill. The Board needs to fire both of them quick before it’s too late.

  3. 3 blu dog Apr 26th, 2017 at 10:37 am

    I’ll give you Harley wannabe because every business would love to have the brand identification that Harley has, but underpowered, uncomfortable and poor handling? I’ve got saddle time on a variety of Harley’s, victorys and Indians, own a Harley and an Indian, and in the bagger category, Indian leads in handling and comfort and the power of all three is comparable. While the relative merit is subject to subjective preferences, a vast majority of objective, knowledgeable folks would find or have found Indians to be tremendously comfortable with excellent handling characteristics and more than adequate power.

  4. 4 ChadBroChill Apr 26th, 2017 at 11:13 am

    did anyone else who listened the investor call to the end hear one of the presenters mention something about killing the stock price?

  5. 5 BobS Apr 26th, 2017 at 11:17 am

    Blu your points are valid from certain perspectives, obviously not all of them. Indian isn’t a Harley wannabe just because everybody (rightfully so) would like to be in Harley’s position. It’s a wanna be because they, Polaris copied the much more cramped riding position, imitated the antique era when it came to styling, and erroneously portray themselves to be a 118 year old company. As for the power, I’m not satisfied with stock power out of any of the three. While the Indian has nice low end torque, it runs out of balls by 3500 rpm. Victory makes power to 5k, 6.5k with cams, and with simple mods makes power that requires much more than simple mods to get from HD and is just simply unavailable for Indian. Comfort, previously mentioned riding position. HD and Indian are the same, Vic’s have room to slide your feet back for aggressive riding or stretch out forward for comfort. Handling same story. The FL chassis is much improved and the Indian is adequate, but having considerable seat time with all three myself and speaking for myself I can ride a Cross Country. With more lean angle faster through tighter corners than either the Chieftain or Street Glide. Regardless of perspective we riders do not all place nostalgia and retro looks at a higher priority than the ride. Polaris brass doesn’t get that and that has led them to bad decisions.

  6. 6 Mdkuder Apr 26th, 2017 at 4:36 pm

    Bad decisions is what they have made as the Victory line may have just needed down sizing to meet it’s market interest. Focusing on building less similar models and adding a couple performance units like the 156 concept now that was sweet and not what we got, don’t get me wrong I like the Octane. The Starwars styling on the baggers isn’t very appealing to many that I’ve talked to an may have ultimately lead to their sales figures.

  7. 7 Chris G Apr 27th, 2017 at 12:32 am

    Bob S We all get it you hate Indian, just say it!

  8. 8 highrpm Apr 27th, 2017 at 9:08 am

    I don’t care for overpaid/bonused execs making short-sided decisions while cloaking the longer-term impacts of such in the usual wall street quarterly/annual report lingo.

  9. 9 BobS Apr 27th, 2017 at 9:23 am

    Chris I’ll admit I post too much on articles that interest me, I own that, so be it. It’s not Indian that I hate. I ripped the former CEO of Harley when he made bad decisions and Levitich isn’t much more than Wandell Light. When these guys get 10 million dollar bonuses I hold them to high standards of decision making. When they make bad ones and then try and BS their way around it I post up my thoughts.

  10. 10 Jim Tom Apr 27th, 2017 at 1:50 pm

    I have both a Roadmaster and a Vision. 50 miles on the Indian feels like 100. 100 miles on the Vision feels like 50. It can’t match the Vision for comfort. If I never owned a Vision, I would think the Indian was comfortable, I wouldn’t know any better. The Indian does handle adequately. Not quite as good as the Vision at speed, better than the Vision at parking lot speed maneuvers. Gas mileage is sub par compared to the Vision. Indian easily beats Vision on storage. Indian is grossly underpowered. Indian is pretty to look at but if I’m picking a traveler , it’s easy, The Vision.

  11. 11 Chris Apr 27th, 2017 at 6:18 pm

    Happy to be riding my Victory.

  12. 12 1550tc Apr 27th, 2017 at 7:15 pm

    bob s

    please call a dual line indian dealer and ask them the scout to octane sales ratio

    yeah the % increases of what ………….its like some niche car guy selling 100 units then selling 250 and bragging about the 250% increase

    1/2 of F-ALL is still F-all

    indian will nibble away at HD just like polaris has done for over 50 years against its many competitors

    sled head guys probably remember when there were 200 guys making sleds

    now there is what 4?? and Polaris dominates that market same with quads and side by sides…….so why dick around with 3000 victories a year ??

  13. 13 BobS Apr 27th, 2017 at 7:32 pm

    1550 I have multiple Vic & Indian combo dealers within riding distance. We could throw anecdotal claims back and forth or we could look at the numbers. DOWN 35% even with 46 million dollars of Victory sales. Minus the Victory dollars sales are DOWN over 50%. Indian outselling Victory 10-1 was a lie. Dicking around with 3000 Vic sales a year is a lie. Unless Indian too is selling only 3000 bikes a year because otherwise we wouldn’t be looking at sales down over 50% without Victory. Truth is Wine looks at the cost of redesigning the next bagger and concludes if he puts an Indian badge on it he will get more sales than if he puts a Victory badge on it so he let Victory dwindle with no updates just different paint for a few years then kills it while falsely assuming he can market his way out of giving 100,000 Victory riders the middle finger. It’s short sighted and such thinking will be the demise of Indian. We’re not all bagger buyers you know.There may have been 200 guys making sleds at one point and Scott Wine wasn’t one of them. Completely irrelevant to if this company is now being run competently. If it was being run competently they wouldn’t be losing almost half their motorcycle sales, that’s a fact.

  14. 14 Roberto Apr 28th, 2017 at 1:07 pm

    Indian needs to go after the police market,lol.

  15. 15 Matt May 1st, 2017 at 1:13 pm

    Bought a Indian Chieftain after my dissatisfaction with a HD Street Glide. Rode a buddies Victory Magnum, blew me away!!! Bought a Victory Magnum X 1 the next week, I was one of the lucky ones that discovered Vic before they were gone. I will ride the Victory until the wheels fall off, it will likely outlast me. Unfortunately
    The executives at Polaris are so out of touch with the motorcycle market, good luck with that Scott Whine.

  16. 16 Highrider May 3rd, 2017 at 12:18 am

    I don’t see anybody resembling this add riding an Indian, mostly old wing riders

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Cyril Huze