Polaris Reports Record Second Quarter Sales
Polaris Inc. has reported Q2 sales increased +40% to $2,117m - reported gross profit margin was 26.0%, up by 403 basis points over the prior year. The company states that the increase was primarily due to lower promotional costs and increased pricing, partially offset by increased input costs including supply chain constraints, logistic, labor and commodity prices.
North American retail sales decreased -28% for the quarter compared to uncharacteristically strong retail sales in the year-ago period, driven largely by low product availability due to supply chain constraints limiting production. On a two-year basis, retail sales were up +14% over second quarter 2019 pre-COVID levels and market share improved during the quarter for its ORV and boat sector operations.
Motorcycles segment sales, including PG&A, totaled $212m, up +50 percent compared to the second quarter of 2020, driven by increased sales of Slingshot, Indian Motorcycles and related PG&A. Gross profit for the second quarter of 2021 was $24m compared to $4m in the second quarter of 2020. As with the overall corporate performance, the increase in gross profit margin was driven by increased volume and lower promotional costs, partially offset by increased input costs from supply chain constraints.
North American consumer retail sales for Indian Motorcycles increased high-twenties percent during the second quarter of 2021 in a mid-to-heavyweight two-wheel motorcycle industry that was up mid-thirties percent. North American consumer retail sales for Polaris' motorcycle segment, including both Indian Motorcycle and Slingshot, increased low-twenties percent during the second quarter of 2021. North American consumer retail sales for the motorcycle industry, including both two-wheel and three-wheel, increased mid-thirties percent during the second quarter of 2021.
Polaris Inc. CEO Mike Speetzen: "We
delivered double digit sales and earnings increases compared to our
pre-Covid results from the second quarter and first half of 2019."
Indian and Slingshot market share losses were driven by a lack of product availability during the quarter driven by supply chain challenges.
Polaris Inc. CEO Mike Speetzen is quoted as saying: "'Think Outside' is resonating with new and current customers alike, with continued strong demand and second quarter results that beat last year's COVID-impacted quarter, as anticipated.
"Even more notable, we delivered double digit sales and earnings increases compared to our pre-COVID results from the second quarter and first half of 2019. All of our segments performed extremely well, posting strong increases in both sales and profitability in the face of a challenging supply chain and increasing input cost environment.
"While supply chain-related headwinds and higher input costs will continue into the second half of the year, the Polaris team's operational dexterity and nimble approach has been nothing short of spectacular. I remain confident in our ability to meet the product demands of our dealers and consumers and deliver value for our shareholders."
Aftermarket segment sales of $240m in the 2021 second quarter increased 15% compared to $208m in the 2020 second quarter. Transamerican Auto Parts (TAP) sales of $206m in the second quarter of 2021 increased 9% compared to $189m in the second quarter of 2020.
The company's other aftermarket brands sales were up +80% compared to the second quarter of 2020. Gross profit increased 32% to $63m or 26.2% of sales in the second quarter of 2021, compared to $48m or 22.9% of sales in the second quarter of 2020. Gross profit percentage improved during the quarter due to higher volume and increased pricing.
Parts, Garments and Accessories ("PG&A") sales increased 35% for the 2021 second quarter, with all categories and business segments growing sales during the quarter.
International sales to customers outside of North America, including PG&A, totaled $311m for the second quarter of 2021, up 64% from the same period in 2020. All regions realized significant sales increases year over year.
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| North American consumer retail sales for Indian Motorcycles increased high-twenties percent during the second quarter of 2021 in a mid-to-heavyweight two-wheel motorcycle industry that was up mid-thirties percent. |
2021 Business Outlook - Given the 2021 first half results, and the expected continued solid retail demand and current dealer pre-order sales from consumers, the Company is increasing its full year earnings guidance and now expects adjusted net income to be in the range of $9.35 to $9.60 per diluted share, compared with adjusted net income of $7.74 per diluted share for 2020.
Full year 2021 sales guidance was narrowed and is now expected to be in the range of $8,375 to $8,500m, up 19 to 21%.