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How Did Polaris Industries’ Segments Fare in 1Q16?

Gabriel Kane

How Did Polaris Industries Perform in 1Q16?

(Continued from Prior Part)

Total sales

Polaris Industries (PII) reported sales of $983.0 million in 1Q16, a fall of 4.9% compared to 1Q15 sales.

1Q16 results

Sales for the off-road vehicle/snowmobile segment fell 9.5% to $720.6 million compared to 1Q15. Off-road vehicle sales fell 12% due to weak retail sales in North American oil markets and tough comparables in 1Q15. Polaris Industries’ off-road vehicle dealer inventory fell 10%, and its North American off-road vehicle unit retail sales were flat compared to 1Q15. Snowmobiles sales rose 2% due to the acquisition of Timbersled.

Sales in the motorcycle segment rose 18% to $188.2 million compared to 1Q15 due to strong retail sales for Indian motorcycles, Slingshot, and Victory.

Sales in the global adjacent markets segment fell 4.5% to $74.1 million compared to 1Q15.

The Work and Transportation group’s whole good sales rose by low single digits as a result of growth in the Aixam business.

The company’s defense business sales fell due to US military budget spending patterns pushing orders into the future.

Polaris Industries’ competitors

Harley-Davidson (HOG) reported 1Q16 motorcycles and related products revenue and EPS (earnings per share) of $1,576.6 million and $1.36, respectively. These were increases of 4.4% and 7.1%, respectively, compared to 1Q15.

In 1Q16, Textron (TXT) saw its total revenues and EPS rise 4.2% and 19.6% to $3,201.0 million and $0.55, respectively, as compared to 1Q15.

Polaris Industries’ key activities in 1Q16 and 2Q16

Below are some of Polaris Industries’ key announcements in 1Q16:

  • Polaris Industries acquired 509, a company of snowmobile helmets and goggles. 509 will join PII’s portfolio of aftermarket apparel and accessories brands, which includes Klim, Kolpin, and Pro-Armor. The terms of this acquisition haven’t been disclosed.
  • Todd Balan, vice president of corporate development, has left Polaris Industries. Guido Neizert, managing director of adjacent-market development, will serve as interim leader.
  • Lawrence D. Kingsley was appointed to the board of directors on January 28.
  • Polaris Industries has acquired Taylor-Dunn, a provider of industrial vehicles. Taylor-Dunn will continue to operate as a distinct brand and will become a wholly owned subsidiary of Polaris Industries.
  • Bob Mack has joined Polaris Industries as senior vice president of corporate development and strategy and president of adjacent markets.

Below are some of Polaris Industries’ key activities so far in 2Q16:

  • After reports of thermal incidents, including fires, Polaris Industries is voluntarily recalling certain RZR 900 and 1000 off-road vehicles manufactured since the model year 2013.
  • R.M. (Mark) Schreck has announced he will retire from Polaris Industries’ board of directors immediately after the 2016 annual shareholders meeting.

The Vanguard S&P Mid-Cap 400 Growth ETF (IVOG) invests 0.84% of its holdings in Polaris Industries. The Guggenheim Raymond James SB-1 Equity ETF (RYJ) invests 0.73% of its holdings in PII.

In the next part of this series, we’ll compare Polaris Industries with its peers and ETFs.

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