This morning Thursday April 23, 2015 Polaris Industries Inc. (PII) reported first-quarter earnings beating Wall Street expectations.
Polaris reported record first quarter net income of $88.6 million, or $1.30 per diluted share, for the quarter ended March 31, 2015, an increase of nine percent from the 2014 first quarter net income of $80.9 million, or $1.19 per diluted share. Sales for the first quarter 2015 totaled $1,033.3 million, which represents an increase of 16 percent from last year’s first quarter sales of $888.3 million. Before Wall Street opening, at 8.30 a.m. ET, Polaris stock (PII) jumped 3.74%.
“I am pleased to report record sales and earnings for our 2015 first quarter, with sales up 16 percent, operating income up 19 percent and net income up nine percent, our 22nd consecutive quarter of record earnings performance,” commented Scott Wine, Polaris’ chairman and chief executive officer. “We outperformed the market again in most of our businesses in spite of increased competitive promotional pressures, weakening global markets and the corresponding negative effect from currencies. While we are justifiably proud of these accomplishments, we remain focused on seizing the numerous opportunities we missed to perform better. From factory inventory being too high to ongoing production inefficiencies, particularly in motorcycles, we did not perform to our capabilities or our expectations. However, we are making great strides towards addressing these issues, and I am confident those efforts will allow us to continue outperforming our markets.”
Motorcycle Sales increased 74 percent in the 2015 first quarter to $137.4 million. All three brands, Victory, Indian Motorcycle® and Slingshot, increased sales in the first quarter. Consumer retail demand for Victory and Indian Motorcycles during the 2015 first quarter, was up nearly 40 percent over last year’s first quarter, driven primarily by strong Indian Motorcycle retail sales, while first quarter North American industry heavyweight cruiser and touring motorcycle retail sales were up low-single digits percent from 2014.
Slingshot Retail Sales were ahead of expectations. All three brands added to their product portfolios during the quarter with Indian Motorcycle introducing the Indian Chief Dark Horse, which is built upon the successful and award-winning Indian Chief® platform with only a flash of chrome and a heavy dose of matte black paint; Victory showcased the new Magnum X-1, a new bagger with a 200-watt, 10 speaker audio system and custom factory paint; and Slingshot adding a limited edition model packed with head-turning features, including striking Nuclear Sunset Orange coloring, dual windscreens and an interior LED lighting package. Sales of Polaris motorcycles outside of North America decreased 12 percent in the first quarter of 2015 as compared to a year ago due to the currency impact of a strengthening U.S. dollar.
For the full year 2015, the Company is narrowing its guidance range and now expects earnings to be in the range of $7.27 to $7.42 per diluted share, an increase of 9 to 12 percent over full year 2014 earnings of $6.65 per diluted share. Full year 2015 sales are expected to grow in the range of 9 to 12 percent over full year 2014 sales, unchanged from previous issued sales guidance.
Polaris is a recognized leader in the powersports industry with annual 2014 sales of $4.5 billion. Polaris designs, engineers, manufactures and markets innovative, high quality off-road consumer and military vehicles, including all-terrain vehicles (ATVs) and the Polaris RANGER® and RZR® side-by-side vehicles, snowmobiles, motorcycles and on-road electric/hybrid powered vehicles.
So here then is the bookend to the losses in the first quarter for the mock. Qu’elle surprise.
Yeah yeah …. all the detractors are cheering the rumors of the motor company’s impending demise .
Thing is … if those detractors would bother to compare the combined totals of P-V-I / Triumph’s Heavy Weights / AND the Japanese cruiser sales [ heck … toss in the Ducati Diavel’s sales in for the sake of argument as well ] to the M-C’s … they’d see … those rumors are nothing more than a lot of wishful thinking that once the ( current ) cruiser sales trend falls off [ … and like all trends … it has in the past and it will again ] will prove to be … nothing more than just that …. wishful thinking
Fact is …. once the trend wanes … the boss will still be ruling the roost … while the others will be fighting for the scraps …. just to survive … Just like in the past !
Full discloser ; I do not and have not owned a motor company bike [ nor has my family for over five years despite us having had them since 1921 ] .. don’t own any stock … nothing . Its simply a case of my seeing things for what they really are … rather than what I or anyone else might wish they could be 😉
J Martin. You’re a tool. You invent comments that don’t exist and make answers to them! Nobody has predicted here the demise of Harley. Everybody just agreeing that Victory & Indian take from Harley sales. Just competition. The funny part of your comment is your prediction that the sales of cruisers is going to fall, like in the past. Really? Where? Where? LOL. Sorry, you demonstrate again (in terrible English) that you understand zip about the motorcycle market.
Numbers don’t lie. Decreases in sales in a market that is seeing across the board decreases may not be indicative of loss of market share, just market.
Decreases in unit sales against increases in unit sales elsewhere is.
Harleys longtime marketing strategy of faux exclusivity worked for decades. That dog don’t just don’t hunt anymore. Be American, Buy American is anachronistic and impossible to sustain. Even if that old saw could be propped up, Polaris is just as domestic and has deep enough pockets to slug it out with the moco.
I proudly own Harley and Polaris and am hopeful that some humility in Milwaukee will result in less parquet floors and more quality and choice.
If I were a wealthy man Polaris would be up at least 6 more sales to add to those numbers. =)
Visited an Indian dealer last week. They are still miniscule in comparison to HD, but had some nice looking machines…the line could use some fleshing out; ie a Dyna equivilant
Now with harley putting 120 motors in there bikes and Jim’s coming out with 133 makes me think they will increase their sales and Polaris will fall behind.
I can understand how Polaris shows a profit with 125% market up on there parts.
If we were more money wise/smart we would run away from Polaris and have money in our pockets instead of theirs
Now how did I know TJ would be among the first to pronounce this means little to nothing and sing the MoCo’s praises? I see Harley is selling about 55 thousand bikes this quarter compared to Polaris’ 135 million dollars worth. Guesstimating wholesale costs and doing the math that’s approximated 20% of HD, or 10-12 thousand units. If HD is only making single digit gains or losses while Victory and Indian are making 50-60-74% increases then reality disagrees with TJ’s prediction.
Sharkey, I agree, a sportster equivalent would help bring folks into the fold also.. they are doing it right with Indian , but it makes me wonder what the deal is with VIC
Bob S, I could really care less, but how do you compare 55,000 bikes to 135 million dollars worth? At least compare the same figures.
Great news for us and PII
I would assume the meeting room at the Mo Co was full this morning.
Many questions would be answered if polaris would publish UNITS sold for indian and victory. Robert Padaya (Spelling?) …can you help?
As I have said. “Competition will, over the long run be good for polaris and harley and for CUSTOMERS.
WTF……….WHO SAID THAT
Yeah yeah …. all the detractors are cheering the rumors of the motor company’s impending demise –
HD is going F KING no where……….. put the crack pipe down and step away from your screen or get a bag Cheetos and go over to red tube dot cum 🙂
Iam no Harvard MBA grad!!!!!!! but please look up……… oligopoly
SYF, since you clearly care enough to ask. MSRP on Vic’s and Indian’s is about 11 – 22 grand. So wholesale, which is Polaris’ sales, so range is probably 7 – 18k, so an avg per unit would be in the 13k ballpark. So total sales divided by 13k. It’s a guess but probably a pretty good one.
I’ll repeat what I said:
H-D is the King of heavyweight cycles
and because of the mystique/marketing or whatever you want to call it
they will be, for a while longer.
But as the story (& the comments) show
& what has been said by me & others on this very blog,
every single time these reports come out, the market IS changing.
And both Polaris brands ARE having an effect .
H-D buyers/ loyalists ARE getting older & that share of the U.S. market is shrinking
with everyone who says “I’m done” or “I can’t hold it up anymore” or “I’m too old” or just dies off
Hence the push at minorities, women & overseas
Personally, I think H-D’s best days are behind them
& if they don;t come up with some serious tech innovations,
they will lose more market share to the Polaris brands.
(My next, and probably last bike, will either be a Vic. XC Tour or an Indian Roadmaster
I just have not decided on which one, yet )
Very true Blackmax. I know some revel in the presumed demise of the bar and sheild. I do not. They aren’t my current preffered ride but I still like them. I don’t think the rise of one equals the fall of the other. H-D isn’t going anywhere. I like to look at trends. H-D for several years now has been selling about 250k bikes a year. If that trend continues in five years they will still be number 1 selling about 250k bikes a year. For the past few years the Polaris brands have been making tremendous growth. Over the last few year’s quarterly and annual reports we’ve seen increases from 50 to over 100%. So if my guesstimate is correct and 138 million in sales equals 10-12k units (Q1) then annual sales in 5 years would be pushing 200k units. In any event Polaris has moved beyond a niche bike, albeit an awesome come-see-conquer best riding kick ass bikes on the market niche, and are now a major player in the motorcycle market. All I see in the future is the enveloped pushed to the benefit of all us riders.
In the 2015 annual report Polaris shows motorcycles as being a very small percent of overall sales volume if memory serves me it was 8% of total sales on the other hand clothing made up 17%.
They just picked up Timber Sled a Snow bike company this week to add to there snow machine product line.
Honda juts launched their jet liner. Polaris and Honda have much more in common than H-D and Polaris in my estimations, since they both rely on multiple platforms and not a single platform.
Polaris purchasing the rights to Indian and manufacturing motorcycles under said name is great for consumers that want to purchase an American made motorcycle. This makes Harley try harder to keep their base from defecting by introducing an improved touring platform (Mount Rushmore Project) and smaller water cooled bikes. By Polaris reintroducing the Indian brand to consumers, the American consumer is the winner because there is now a choice, (sorry Victory). If you haven’t seen the new Indians in person I can tell you this. The quality of build is far better than Harley and they know it as they are about 3-4K more expensive for a comparative HD model. I purchased my first Harley at the age of 20 and have bought 3 more since then. My next bike will be an Indian.