Polaris Industries Inc. (NYSE:PII) today reported second quarter net income of $71.2 million, or $1.09 per diluted share, for the quarter ended June 30, 2016 compared to $100.9 million, or $1.49 per diluted share reported in the second quarter of 2015. Sales for the second quarter of 2016 totaled $1,130.8 million, up one percent from last year’s second quarter sales of $1,124.3 million. Motorcycle sales increased 23% during the quarter. Global Adjacent Markets sales increased 14%. ORV/Snowmobiles sales were down 6%, slightly better than expectations.
Motorcycle segment sales, including its respective PG&A sales, increased 23 percent in the 2016 second quarter to $231.3 million. All brands grew sales during the quarter. Gross profit increased 63 percent to $39.8 million or 17.2 percent of sales in the second quarter of 2016, compared to $24.5 million or 13.1 percent of sales in the second quarter of 2015. North American consumer retail demand for the Polaris motorcycle segment, including Victory®, Indian Motorcycle® and Slingshot®, was up mid-teens percent during the 2016 second quarter while overall motorcycle industry retail sales 900cc and above were down mid-single digits percent in the 2016 second quarter. Product availability for all three motorcycle brands remained adequate throughout the quarter as year-over-year paint capacity at the Company’s Spirit Lake, Iowa motorcycle plant has significantly improved.
Off-Road Vehicle (“ORV”) and Snowmobile segment sales, including its respective PG&A sales, decreased six percent from the second quarter of 2015 to $808.5 million. Gross profit decreased 17 percent to $230.6 million or 28.5 percent of sales in the second quarter of 2016, compared to $278.9 million or 32.5 percent of sales in the second quarter of 2015. ORV wholegood sales decreased six percent to $645.4 million reflecting ongoing softness in retail sales in North American oil markets and tough comparables from the second quarter of last year. Snowmobile wholegood sales decreased 55 percent to $8.6 million due to the timing of shipments year-over-year. Snowmobile sales in the Company’s second quarter are routinely low as it is the off-season for snowmobile retail sales and shipments.
Polaris 2nd Quarter 2016 Segment Results (in thousands) Includes respective parts, garments and accessories (PG&A) related sales.
Solid. All three brands up while the market overall is down, impressive.
Snow mobiles are overrated…. 🙂
-nicker-
Wow
While Polaris’s numbers are impressive, and I hope they continue to grow. It is still a very small segment. Their recent recall covered most of the Big Twins the Indian brand has produced thus far, less than 30k units in three model years. While that is impressive for a new launch. But, it’s going to take a few more years for Victory and Indian to get to a full fledged threat to HD and the big four. That being said, I actually believe Polaris Industries has the talent in all areas of the business to pull it off. Don’t classify me a hater, I’m actually a believers! Scott Wines and crew are well on their way to becoming a force to be reckoned with in the motorcycle industry and I salute them!
Deadwood1783. Yes, but you have to realize that since the launch, 8 to 9 out of 10 Indian sales are made to former Harley riders or as a second bike to a Harley rider. So, Polaris already hurts Harley and is a serious threat. And Harley has an image problem, not Indian and Victory. Harley loose more baby boomers every day than the number of new young bikers it can acquire. Let’s see the Harley 2nd quarter results n a few days. In the US I bet they will be quite bad.
Sure Paul. Hamilton. HD is the target. But total production at this point is less than one model of Sportster! So saying they are a real threat to Milwaukee today is a massive overstatement! Saying they are an up and coming player with awesome potential is much more realistic. Surely you don’t think the mighty Harley-Davidson is going to roll over! No way! And when you are on top of a market, you are the target! Nobody try’s to emulate a loser! Challenging HD is tough, just ask the metric manufacturers! In time, Polaris very well may get to a point to challenge HD’s market supremacy. Point being, that is a few years down the road. Competition is a great thing! And make no mistake Harley-Davidson will compete!
Deadwood- Bingo.
I love reading all the comments on the quarterly reports
Snowmobile is where they made all for the $$$ they get to put back in on cycles,
I hope that it come back for them…
As far as the cycles numbers go, yes H-D is still the “Big Kid” on the block.
but every time I see one of these, Polaris with Indian (& a little help from Victory)
just keep taking bigger & bigger bites of H-D’s pie !!
But I do agree with Deadwood 100%
I agree with nicker – particularly in Florida…
in the long run, it’s all going to boil down to who makes the best bike. The good thing about Polaris is that Harley can no longer assume that people will buy anything they put out regardless of how reliable it is.
While Rushmore was a big deal for HD, it was released later than it should have been. Harley has been lax in following trends when it should have been leading trends. The radio being the most annoying. Make no mistake, I’ve been an HD buyer for 50 years and have owned and built as many HD based bikes. Yet the depth of Polaris’ technical Indian and Victory designs is really impressive. Take a cutaway look at the 111 engine and compare that to the Twin Cam. And the aesthetics of the bikes are awesome. Growth in sales is impressive. No doubt HD is taking notice. I predict a completely new engine design in the next 1 to 2 years that will help HD get some momentum going now that the Rushmore chest beating is getting a little stale. The history of big twin engine turn over is about 15 to 18 years since the panhead. The Twin Cam is 18 years old with the 2017 models. It will be interesting to see what that engine borrows from the Indian/Polaris mix and adds as unique to HD (maybe unitized construction). And how that’s packaged with a new chassis and aesthetics.