Polaris Industries Inc. released first quarter 2019 results with sales of $1,496 million on a reported and adjusted basis, up 15 percent from $1,297 million for the first quarter of 2018.
“Polaris’ 65th anniversary year is off to a solid start, as we delivered sound results and finished the quarter with strong momentum,” said Scott Wine, chairman and chief executive officer of Polaris Industries Inc. “The team executed well, providing quality products to our customers while navigating a dynamic trade environment. Retail sales results were somewhat mixed, with greater than 20 percent snowmobile growth helping to offset modest weather-related declines in ORV, motorcycles and boats, although all three of these segments came on strong at the end of March. Our product lineup has never been stronger, our boat brands fared well during the recent boat shows, dealer inventory levels are well-positioned to support the peak spring retail selling season, and our strategic sourcing program is accelerating savings and value enhancement. We remain steadfastly committed to enhancing our customer-centric culture, which amplifies our investments in innovation and operational prowess, and as we look to the balance of 2019, we are confident about gaining market share as we continue bringing innovative products to our customers and solidifying our position as the leader in powersports.”
Highlights from the first quarter include:
- Reported and adjusted sales for the first quarter of 2019 increased 15% to $1,496 million
- Reported net income was $0.78 per diluted share, down 8% over the prior year; adjusted net income for the same period was $1.08 per diluted share, down 4% over the prior year, ahead of company expectations
- North American retail sales decreased 3% for the quarter compared to last year; ORV N.A. retail sales were down mid-single digits percent and motorcycle sales were down high-single digits percent, both negatively impacted by weather
- Gained market share in snowmobiles for the season ending March 2019; maintained market share in Indian motorcycles in a challenging industry environment
- Dealer inventory was down 1% year-over-year for the first quarter 2019, in-line with expectations
- Polaris increased its full year 2019 earnings guidance and now expects earnings to be in the $6.05 to $6.30 per diluted share, which includes the absorption of $80 to $90 million of additional tariff costs anticipated in 2019 over 2018. Full year 2019 adjusted sales growth guidance remains unchanged at up 11% to 13% over the prior year.
2019 Business Outlook
Given the 2019 first quarter results, the company is increasing its full year earnings guidance and now expects adjusted net income to be in the range of $6.05 to $6.30 per diluted share, compared with adjusted net income of $6.56 per diluted share for 2018. Full year 2019 sales expectation remains unchanged at up 11 to 13%. The full year earnings guidance is inclusive of the company’s expectations related to the negative impact of external factors such as the annualized impact of tariffs, adverse foreign exchange impacts and higher interest rates, totaling approximately $1.50 per diluted share, on a combined basis. Absent these items, the company is expected to generate positive earnings growth on a year-over-year basis.