Net income increased 43% to $69.8 million, or $0.98 per diluted share, with sales increasing 24% to $755.4 million, setting second quarter sales and earnings records. North American retail sales sustained considerable momentum, rising 17% year-over-year in the second quarter. All product lines experienced increased sales during the 2012 second quarter. Raising guidance for full year 2012 earnings to a range of $4.05 to $4.15 per diluted share, up 27% to 30% over 2011 based on expected full year 2012 sales growth of 14% to 17%.
Sales in the On-Road Vehicles division, comprising mainly Victory motorcycles but also including Indian motorcycles and GEM and Goupil electric vehicles, increased 110 percent over the same period last year to $64.7 million. North American industry heavyweight cruiser and touring motorcycle retail sales increased by low single digits compared to the prior year’s second quarter. Over the same period, Victory North American consumer unit retail sales increased more than 10 percent.
North American Victory dealer inventory increased over 2011 levels to support the retail sales increases, market share gains and new product launches of the Victory Judge and Victory Hard-Ball. Polaris sales of On-Road Vehicles to customers outside of North America, now including Goupil, increased more than 130 percent during the 2012 second quarter compared to same period last year. The 2011 acquisitions of Indian, GEM and Goupil contributed more than a third of On-Road Vehicles’ second quarter sales growth.
Scott Wine, Polaris’ Chief Executive Officer, commented, “While the weak U.S. economy and likely recession in Europe are concerning, we continue to see strength in our core North American Powersports business. On-Road Vehicles business also experienced strong demand, up 110 percent, which reflects ongoing consumer enthusiasm for our expanding line of motorcycles worldwide and the importance of our diversification efforts. Our investments in adjacent markets and international expansion are paying dividends, and we are excited to have Eicher Motors Limited as a joint venture partner to aggressively pursue growth in India. The strong second quarter results were driven by solid strategic execution combined with end-market demand that is healthier than a year ago.”
Business Outlook. Full year 2012 sales are now expected to grow in the range of 14 percent to 17 percent from 2011.