Polaris Reports Record First Quarter 2014 Results. Motorcycle Sales Up 52%

PolarisPolaris Industries Inc. (NYSE:PII) this morning reported record first quarter net income of $80.9 million, or $1.19 per diluted share, for the quarter ended March 31, 2014. By comparison, 2013 first quarter net income was $75.5 million, or $1.07 per diluted share. Net sales for the first quarter 2014 totaled $888.3 million, which represents an increase of 19 percent from last year’s first quarter sales of $745.9 million.

“I am extremely pleased to report record sales and earnings for our 2014 first quarter, which represents the 18th consecutive quarter of record earnings performance. Our broad and diversified product and brand portfolio has Polaris off to yet another strong start, with first quarter sales up 19 percent led by continued excellent performance from our Off-Road Vehicles (“ORV”) business and rapid growth within our motorcycle, small vehicle and PG&A b2014 Business Outlook
For the full year 2014, the Company now expects earnings to be in the range of $6.30 to $6.45 per diluted share from continuing operations, an increase of 17 to 19 percent over full year 2013 earnings of $5.40 per diluted share from continuing operations. Full year 2014 sales are expected to grow in the range of 14 to 16 percent over full year 2013 sales.

First Quarter Performance Summary (in thousands except per share data)

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Motorcycle division sales increased 52 percent in the 2014 first quarter to $78.9 million due to the shipments of the new model year 2014 Indian motorcycles. Consumer retail demand for Polaris Motorcycles, driven by strong Indian Motorcycle retail sales, was up about 50 percent during the 2014 first quarter, while first quarter North American industry heavyweight cruiser and touring motorcycle retail sales were up low-single digits percent from 2013. The re-launch of Indian Motorcycle continued during the 2014 first quarter as more dealers began retailing the brand and the product line received high visibility from both motorcycle shows and an aggressive marketing campaign. While Indian received the lion’s share of the press from the media during the quarter, Victory continues to market innovative, high performance products with the recent introduction of the Victory Gunner, an urban cruiser with a combination of bobber style, performance and power. Sales of Polaris motorcycles outside of North America increased 140 percent in the first quarter of 2014 as compared to a year ago driven by strong shipments of Indian motorcycles.

Off-Road Vehicle (“ORV”) sales increased 11 percent from the first quarter 2013 to $602.8 million. This increase reflects continued market share gains for ORV, aided by the all-new 2014 RZR XP1000 high performance recreation vehicle introduced in the third quarter 2013 and the new Sportsman ACE™, a single-seat sit-in off-road vehicle introduced in January. Polaris’ North American ORV unit retail sales were up high single digits percent from the first quarter of 2013, with consumer purchases of ATVs.

Snowmobile sales totaled $15.6 million for the 2014 first quarter compared to $14.7 million for the first quarter of 2013. The North American snowmobile industry finished the season strong with industry retail sales up just over ten percent for the entire season ending March 31, 2014 due to favorable snowfall levels in most of the North American snowmobile riding areas. Polaris’ North American retail snowmobile sales were up mid-single digits percent for the full 2013-2014 season, but were lower than the industry primarily due to a slow start to the Company’s pre-season orders from consumers last spring.

Small Vehicles division, which is comprised of Aixam, GEM and Goupil, increased 248 percent to $38.5 million compared to the first quarter of 2013. All three businesses experienced sales growth during the 2014 first quarter with incremental sales from the Aixam acquisition in April, 2013 representing the most significant portion of the 2014 first quarter sales growth.

Parts, Garments and Accessories (“PG&A”) sales increased 20 percent during the first quarter 2014 to $152.6 million compared to the same period last year. The growth was driven by double digit sales increases in ORV, motorcycles and small vehicles resulting from product innovation, increased integration of accessories and a greater focus on apparel sales through the Klim business.

International sales to customers outside of North America totaled $165.1 million for the 2014 first quarter, up 44 percent over the same period in 2013. The increase in first quarter sales resulted from strong sales growth in the Europe, Middle East and Africa (“EMEA”) region with sales up about 50 percent; over two-thirds coming from the April 2013 acquisition of Aixam, and a 28 percent combined increase in sales to customers in the Asia/Pacific and Latin America regions. Both ORV and motorcycles gained market share outside of North America during the 2014 first quarter.

18 Responses to “Polaris Reports Record First Quarter 2014 Results. Motorcycle Sales Up 52%”


  1. 1 BobS Apr 23rd, 2014 at 1:48 pm

    A second good news report from the second US motorcycle manufacturer. Must be some sun shiny days for those in the bike biz. I see Victory has applied for registration of a water cooled V-twin in Europe, I wonder if that will be the new Street fighter? Double entendre intended…

  2. 2 Grant Trent Apr 23rd, 2014 at 2:22 pm

    Great news. If you want to know the number of Indian sales. Take the average price of an Indian (20K) Consider that 70% of sales were Indian (I guess pretty close, I think). Take total motorcycle sales in dollars. Do 70%. Divide by $20,000. And the result is…

  3. 3 BigWave916 Apr 23rd, 2014 at 2:31 pm

    Grant Trent…..you’d have to know the invoice price to the dealer, not MSRP. Their total revenue in the financial statement is what they were paid for all motorcycles and it doesn’t include dealer mark up.

    I doubt 70% of sales were Indian. If total sales are up by 52%, Victory sales would have had to drop to make Indian more than about 30% of the total sales. I haven’t heard any news of a slow down in Victory sales.

  4. 4 BobS Apr 23rd, 2014 at 2:38 pm

    Grant this is a Polaris report, 70% and 20k are way off. 20k may be close to average retail price of Indian, but that’s dealers not Polaris and 70% Indian is nothing but a wild guess. I would guess at minimum Victory accounts for half of Polaris’ motorcycle sales, probably even more. And average wholesale price on a Victory would be even less than avg. price on an Indian. They have several popular cruisers that retail for around 13k, so wholesale…probably more like sub 10k.

  5. 5 Grant Trent Apr 23rd, 2014 at 4:14 pm

    BigWave916. You are not very good with math. Victory can sell as many bikes, or even more than before and have its percentage of total Polaris motorcycles sales go down. I know a dealer who sold 11 Indians for 1 High Ball Victory. Evidently Polaris sells many times more Indians than Victorys. I would agree with 7 bikes out of 10 being an Indian. And if you take the average dealer price of an Indian at $18,000. It’s 70% of 79 million = about 55.3 million : 18,000 = 3072 Indians sold during the 1st quarter. Not bad for only 1 model in 3 versions. And probably 90% of Indian buyers were taken from Harley. Let’s say that Indian sells 12,000 to 14,000 Indians in 2014. Add the new 2015 Indian models announced in Sturgis. It is reasonable to think Indian will sell an additional 5000 bikes. Total 17,000 to 19,000 motorcycles in 2014. This year, Harley expects to ship about 210,000 motorcycles worldwide. It would mean that at the end of 2014 Indians would own about 8% to 9% of the heavyweight cruisers market. It would be remarkable…and would bother Harley a lot.

  6. 6 Bruce Reynard Apr 23rd, 2014 at 4:35 pm

    I would lean on the side of Grant demonstration. The Indian/Harley war just got started.

  7. 7 Bruce Apr 23rd, 2014 at 4:41 pm

    Bravo Polaris. Indian has a past and a future…

  8. 8 BobS Apr 23rd, 2014 at 7:26 pm

    Grant even if I agreed with your 70% figure ( I do not ) just how do you think Polaris actually makes any money? Chief Classic MSRP = 18,999, Vintage which is just a Classic with bags and a shield MSRP = 21,999 and Cheitain which is just a Classic with hard bags and a fairing MSRP = 23,999. So all start off as a bike that retails for 19 grand. Indian also offers a military discount of 1000 dollars so now we’re talking about a bike that retails for 18 grand. Don’t the dealers make any money? Indian has to sell the bike to the dealers for less than 18 if they’re to make any profit. Have you worked at a dealer? Any idea of what their margin is? Assuming that full MSRP is a nice margin and after the first year or so dealers have some room of their own to discount. I think you need to knock some more off your average wholesale price guess.
    With regard to your 70%…last year’s Q1 motorcycle sales was 52 million, that was all Victory. If we go by your figures of Indian accounting for 55 million of this years sales that leaves 24 million left for Victory. Are you saying Victory’s sales have dropped by over half?

  9. 9 Rodent Apr 23rd, 2014 at 8:30 pm

    Whatever Indian and Victory sold ain’t making for rejoicing in Milwaukee !

  10. 10 Rick Lossner Apr 24th, 2014 at 6:11 am

    Validation that Indian Motorcycles is to be reckoned with. Those sales were in the middle of the worst winter in quite some time for many.

    Less than 4 months, the new 2015s will be introduced. Watch the stock price then

    Question becomes…. what will SL ship? New paint schemes to refresh the current 3 only options? More Options for the Chieftain ? New Scout that is highly anticipated? A more full blown tourer?

    Good times ahead! The aftermarket jumping on board after less than 9 mos of shipping has proven that

    Morale of the Story : Buy PII

  11. 11 vrat Apr 24th, 2014 at 9:11 am

    Its good news all round when we see sales numbers like this. Interesting comment from our local Indian/Victory dealer. His Victory sales have increased over last year due to an increase of foot traffic in the show room. Great move by Polaris.

  12. 12 18Bravo Apr 24th, 2014 at 10:29 am

    And the moral of this story, which I posted the last time a Polaris story came up: Glad I own it.
    Wait for a bad day on the stock market. My wife likes to call those “buying opportunities.”

  13. 13 richard Apr 24th, 2014 at 3:01 pm

    I wonder why Polaris does not report units for Indian and Victory as Harley does? Maybe Robert Pandya can shed some light on this…..as in the past, he’s been quite helpful in keeping us informed about a variety of items.

  14. 14 Steve The Hog Radio Show Producer Apr 24th, 2014 at 3:57 pm

    Great news for both Polaris and H-D.

    I read in another industry blog Polaris admitted Victory numbers was down that Indian sales were the main reason for sales increases.

    Indian stated that they hoped the new Victory Gunner model priced at the $13,000 (rounded up numbers) would increase interest and sales in their Victory line.

  15. 15 Brett Wagner Apr 24th, 2014 at 6:58 pm

    Make your profit on Harley (HOG). Then buy Polaris (PII)

  16. 16 Robert Pandya Apr 28th, 2014 at 12:38 pm

    Hello all –

    We do keep as many numbers private for competitive reasons – now what you want to hear I know, but we disclose what we must being a public company, but no more than we must to maintain privacy.

    I think that riders are really starting to get how diverse and strong PII is – A garage full of PII built products is a varied and exciting thought. With more to come and the support we are seeing from new dealers, customers and the industry in general, one would be foolish to underestimate our potential.

    Thus the desire to keep as much private as is possible…

    Have a smooth week all,

    Robert Pandya
    External Relations Manager
    Indian Motorcycle

  17. 17 Blackmax Apr 28th, 2014 at 6:31 pm

    I’m glad the Mo-Co is doing well
    Competition works for EVERYONE !!!!
    2 of my riding buddies are brothers,
    one has a 2013 Vic Cross Country with accessories & Loves It !!!!
    Says it rides lie a dream….
    His brother on the other hand goes & buys a brand new 2014 H-D Street Glide
    with accessories & he loves it !!!!
    To see them both go at it is Hilarious
    The numbers are the numbers are the numbers don’t sweat it unless you own stock
    & really would not worry too much about it even then.
    Thank you Robert as always for injecting common sense and levity into the conversation
    And now, onto the next article about Polaris’ earnings

  18. 18 Stan Hilton Jun 23rd, 2014 at 7:49 am

    My new black Indian Chieftain is number 6626, if that helps with the numbers guessing game. The dealership I bought mine from sells multiple lines and the salesman told me they are selling more Indians than all the others, including Victory.

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