Polaris Q1 Revenue and Unit Volumes Down Overall, with Indian Units and Domestic Market Share Up
Against a background of an overall 20% year-on-year decline in total all-segments sales revenue ($1,736m), Polaris has reported North America unit retail sales of Indian Motorcycles "up low-teens percent" in a market where estimated North America unit retail sales for the comparable motorcycle industry were up low-single digits percent."
This resulted in an increased motorcycle market share "at home" despite lower total volumes of its on-road range (international motorcycle sales and domestic 'Slingshot' sales included).
On-Road segment results were primarily driven by the lower overall volumes and an 8% decline in PG&A sales. Segment gross profit margin performance was driven by favorable product mix, partially offset by higher warranty expense with lower net pricing, driven by higher promotional activity.
Mike Speetzen, Chief Executive Officer of Polaris Inc., is quoted as stating: "Our sales results for the first quarter were in line with our expectations and adjusted EPS came in above plan.
"With our competitive product portfolio, we gained share in ORV, motorcycles and Marine, and the recent launches in our best-selling full-size RANGER and Indian Scout lineups reflect our strategic focus on Rider-Driven Innovation.
"While we continue to see strength within our Off-Road Utility business, Snow was particularly challenging given poor winter conditions and trends in more recreational categories continued to be soft.
"Looking forward in the year, our focus remains on sound execution in spite of the uncertain macro environment, from managing dealer inventory and delivering for customers, to making continued progress with operational improvements and driving profitable growth."
North America sales of $1,444m represented 83% of total company sales and decreased 22% from $1,842m in 2023. International sales of $292m represented 17% of total company sales and decreased 13% versus the first quarter of 2023.
'Indian home market unit volume up low-teens percent'
First quarter net income attributable to Polaris of $4m decreased 97% and diluted earnings per share ("EPS") of $0.07 decreased 96% compared to the first quarter of 2023. Adjusted net income attributable to Polaris for the quarter was $13m, down 89%, and adjusted EPS was $0.23, down 89%, in each case as compared to the first quarter of 2023.
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| "Polaris reported an overall 20% year-on-year decline in total all-segments sales revenue ($1,736m) for Q1." |
Gross profit margin decreased 250 basis points to 19.0% for the first quarter, as compared to the first quarter of 2023. Adjusted gross profit margin of 19.0% decreased 248 basis points, primarily driven by higher promotional activity and higher warranty expense, partially offset by favorable operational costs, as compared to the first quarter of 2023.
Operating expenses were $313m in the first quarter of 2024 compared to $325m in the first quarter of 2023 due to lower selling and marketing expenses. Operating expenses, as a percentage of sales, of 18.0% were up 314 basis points in the first quarter of 2024 compared to the first quarter of 2023.
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| Mike Speetzen, Chief Executive Officer of Polaris Inc., is quoted as stating that "our sales results for the first quarter were in line with our expectations." |
Off-Road segment results were primarily driven by lower volume in snow and off-road vehicles, partially offset by increased PG&A sales (increased by 5%). Segment gross profit margin performance was driven by lower net pricing, driven by higher promotional activity and higher warranty expense, partially offset by operational improvements.
Polaris North America ORV unit retail sales were up 3%. Estimated North America industry ORV unit retail sales were up low-single digits percent.
Marine segment results were primarily driven by lower volumes. Segment gross profit margin performance was impacted by a decrease in sales volumes and lower net pricing.
The company continues to expect 2024 sales to be down 5 to 7% versus 2023.