Polaris Reports Total Sales Revenue +22%, with Domestic Indian Motorcycle Unit Retail Flat in a Down Market
Polaris has reported Q1 sales up by +22% compared to the year ago at $2,180m, with market share gains across all segments - "strong performance in Snow, as well as sustained demand in utility Off Road and Indian Motorcycle more than offset softness in recreational Off Road."
Retail sales for the quarter were down 5% versus Q1, 2022, but +14% versus Q1, 2019. Primary sales drivers in the quarter were said to be favorable unit ship volumes, product mix and net pricing, partially offset by higher finance interest.
North America unit retail sales for Indian Motorcycle were flat. North America unit retail sales for the comparable motorcycle industry were down low-double digits percent.
On Road segment results were bolstered by better product availability, given an improving supply chain environment, as well as the improved product mix. Segment PG&A sales increased +19%. Segment gross profit margin performance was driven by favorable product mix and higher volumes.
CEO Mike Speetzen is quoted as saying: "We started the year off strong, delivering on our sales, margin and EPS expectations, as well as share gains across the portfolio. In January, we promised 2023 would bring industry-leading vehicle news, and with the recent launch of our fully redesigned RZR XP and production underway of our all-electric RANGER XP Kinetic, we are just getting started on that commitment and believe we will continue this momentum throughout the year.
"While retail remains mixed, we are seeing good signs within the business as we enter the spring selling season. We remain agile and confident in our ability to execute against our plans, drive profitable growth and bring compelling offerings to dealers and customers in 2023."
Polaris North America ORV unit retail sales were down -10%. Estimated North America industry ORV unit retail sales were down low-double digits percent.
Segment Parts, Garments and Accessories (PG&A) sales were flat. Segment gross profit margin performance was driven by favorable net pricing and lower cost premiums, more than offsetting higher finance interest. Snow season-end retail was up low-single digits percent versus the industry estimate of down low-single digits percent.
Total North America sales of $1,842m represented 85% of total company sales and increased 24% from $1,491m in 2022. International sales of $338m represented 15% of total company sales and increased +16% versus the first quarter of 2022.
Q1 net income from continuing operations attributable to Polaris of $113m increased 53% and diluted earnings per share (EPS) was up by +61% at $1.95 versus last year; adjusted diluted earnings per share from continuing operations was $2.05, up 55% versus last year.
Gross profit margin increased 172 basis points to 21.5% for the first quarter. Adjusted gross profit margin of 21.5% increased 170 basis points. Q1 operating expenses were $325m compared to $264m in the first quarter of 2022 due to higher marketing, general and administrative expenses. At 14.9%, operating expenses, as a percentage of sales, were up slightly in 2023 Q1 compared to the year-ago.
In terms of continuing 2023 business outlook, Polaris says it "continues to expect 2023 sales to be flat to up 5% versus 2022. The company continues to expect adjusted diluted EPS from continuing operations attributed to Polaris Inc. common shareholders to be down 3% to up 3% versus 2022.