Minneapolis based Polaris Industries, owner of Indian Motorcycle and the market-leading ATV, SxS and snowmobile manufacturer, reported Q2 sales of +10% to $1,503 million; net income +47% at $1.43 per diluted share; north American retail sales of +6% for the quarter; and north American ORV (ATV and SxS) retail up mid-single digits % with market share gains for both.
Taking into account improved volume expectations and the acquisition of Boat Holdings, LLC (its first venture into the marine sector), Polaris increased full year 2018 sales guidance to be up between 11 and 12% and adjusted its full year earnings per share expectations downwards to allow for the absorption of an estimated additional $40 million of tariff and related commodity cost increases for 2018.
Motorcycle segment sales, including PG&A, totalled $171 million, down by -13 percent compared to $198 million reported in the second quarter of 2017 due to a weak domestic U.S. motorcycle industry and timing of shipments for Indian motorcycles year-over-year; Slingshot sales were also down. Segment gross profit was up at $25 million, but down when adjusted for Victory wind-down costs.
North American Indian Motorcycle retail sales increased mid-single digit percent; Slingshot's retail sales were down mid-single digit. Domestic U.S. motorcycle industry retail sales of 900 cc and above were down mid-single digit percent in the 2018 second quarter, meaning Indian gained share in a declining market.
International sales, including PG&A, were +7% at $204 million due to foreign exchange movements and “strong sales in the company's EMEA business for ORV and motorcycles”.
Scott Wine, Chairman and Chief Executive Officer of Polaris Industries Inc, stated: “I am very pleased with the Polaris team and the strong execution they delivered across the business during the second Quarter. With solid retail growth and market share gains in both our Off-Road Vehicle business and Indian Motorcycle, we are clearly reaping the benefits of our safety and quality investments, new product innovations and improved delivery performance. Consumer sentiment and dealer traffic improved throughout the Quarter, building momentum, which will help offset the rising risk of tariffs in the second half”.
