Polaris Sees Strong Q1 With Indian Motorcycle Sales Up Over 60%
Polaris has announced its Q1 financial results with North American consumer retail sales for Indian Motorcycles having increased low sixty percent during the first quarter of 2021 in a mid-to-heavy-weight two-wheel motorcycle industry that was up mid thirty percent.
Motorcycles segment sales, including PG&A, totaled $166m, up 31% compared to the first quarter of 2020, driven primarily from increased sales of Slingshot, Indian motorcycles and related PG&A. Gross profit for the first quarter of 2021 was $8m compared to a $1m loss in the first quarter of 2020.
The increase in gross profit margin was driven by volume and lower promotional costs offset somewhat by increased costs from supply chain constraints and negative product mix.
Including both Indian Motorcycle and Slingshot, sales in the motorcycle segment increased low-seventies percent during the first quarter of 2021 in a market for two and three-wheel vehicles that increased high thirties percent during the first quarter of 2021.
Mike Speetzen, Interim Chief Executive Officer of Polaris Inc., is quoted as saying: "The strength of our brands and the agility and dedication of the global Polaris team were on full display yet again this quarter, building on our incredible momentum from 2020 and delivering results that exceeded our expectations.
"Despite pandemic-related supply chain constraints, logistical challenges and North American weather-related disruptions, sales across our business grew double-digits as we leveraged our capabilities and scale as the industry leader in powersports to deliver for our customers and dealers.
"Industry-leading innovation remains core to who we are, which was evident by the introduction of over 40 new or limited edition models during the quarter, including 22 new snowmobiles and a new turbo-charged engine, 15 new and limited edition ORV models and three all-new Indian Chief motorcycles, celebrating 100 years of one of the most historic and influential motorcycles of all time.
'sales across our business grew double-digits'
"We also announced plans to launch an all-new full-size electric RANGER by year-end, which further positions us to be the leader in powersports electrification. We will continue to swiftly navigate the challenges that may present themselves in the coming quarters, while positioning Polaris for long-term growth and value creation for all our stakeholders."
First quarter reported and adjusted sales increased 39% to $1,951m from reported sales of $1,405m for the first quarter of 2020. The company reported net income of $134m, or $2.11 per diluted share, compared with a net loss of $5m, or $(0.09) per diluted share, for the 2020 first quarter. Adjusted net income was $146m, or $2.30 per diluted share compared to $14m, or $0.22 per diluted share in the 2020 first quarter.
The company stated that "retail demand and industry tailwinds continued to be strong during the quarter, driving higher company performance as both new and existing customer growth accelerated across all segments and regions of the company."
Gross profit increased 64% to $481m for the first quarter of 2021 from $293m in the first quarter of 2020. Reported gross profit margin was 24.6% of sales for the first quarter of 2021, up 378 basis points compared to 20.8% of sales for the first quarter of 2020.
The improvement in gross profit was driven primarily by higher volumes and lower promotional costs during the quarter, partially offset by higher logistical costs and plant inefficiencies related to the supply-chain constraints. Adjusted gross profit for the first quarter 2021 was $483m, or 24.7% of adjusted sales compared to the first quarter of 2020 adjusted gross profit of $298m, or 21.2% of sales. Adjusted gross profit for the first quarter of 2021 and 2020 excludes the negative impact of $2m and $5m of restructuring and realignment costs, respectively.
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| 2021 Limited Edition Chieftain Elite |
North American retail sales increased 70% for the quarter compared to last year, driven by broad-based strength across the business. Market share improved for all segments during the quarter; ORV, snowmobiles, motorcycles and boats.
Polaris repurchased approximately 2.5 million shares of Polaris stock during the quarter for $299.1m.
Polaris has increased its full year 2021 sales and earnings guidance and now expects earnings to be in the range of $9.00 to $9.25 per diluted share. Full year 2021 adjusted sales are now expected to be up 18% to 21% over the prior year.
Off-Road Vehicles ("ORV") and Snowmobiles segment sales, including PG&A, totaled $1,232m for the first quarter of 2021, up 50% compared to $824m for the first quarter of 2020, driven by broad- based strength across ATVs, side-by-sides and snowmobile sales.
ORV wholegood sales for the first quarter of 2021 increased 39%. Polaris North American ORV retail sales increased approximately 80% for the quarter, with side-by-side vehicles up high sixty percent and ATV vehicles up about 100 percent. The North American ORV industry was up about sixty percent compared to the first quarter last year.
Snowmobile wholegood sales in the first quarter of 2021 were $75m compared to $6m in the first quarter last year. Polaris snowmobile retail sales were up low-twenty percent and up mid-twenty percent for the twelve-month season ending March 2021. North American industry retail was up mid-single digits percent for the first quarter and up mid-teens percent for the season ending March 2021.
And example of the 2022 Indian Chief Big Twin line-up
Global Adjacent Markets segment sales, including PG&A, increased 27% to $125m in the 2021 first quarter compared to $98m in the 2020 first quarter, driven by increases in demand in North America and EMEA. Aftermarket segment sales of $230m in the 2021 first quarter increased 14% compared to $202m in the 2020 first quarter. Transamerican Auto Parts (TAP) sales of $193m in the first quarter of 2021 increased nine percent compared to $177m in the first quarter of 2020. The company's other aftermarket brands sales were up 45% compared to the first quarter of 2020. Boats segment sales increased 29% to $199m in the 2021 first quarter compared to $155m in the 2020 first quarter.
Parts, Garments and Accessories ("PG&A") sales increased 49% for the 2021 first quarter, with all categories and business segments growing sales during the quarter.
International sales to customers outside of North America, including PG&A, totaled $288m for the first quarter of 2021, up 59% from the same period in 2020. All regions realized significant sales increases year over year.