Continued weak ATV and snowmobile sales by Polaris Industries Inc. led to a drop in the Minnesota manufacturer’s third-quarter sales and net income.
Polaris reported a 12 percent decline in net income and a 10 percent drop in sales in this year’s third quarter compared to the previous year’s third quarter. The third-quarter findings led the company to increase its expected shortfall in sales of ’06 vs. ’05 to 11 or 12 percent. Polaris, in its second quarter report, expected that sales decline to be closer to 3 to 5 percent.
“Although we are currently working through some near-term challenges in our core business, we remain confident in our value proposition and committed to building quality products that best serve customers’ needs,” Polaris CEO Tom Tiller said in a released statement. “2006 has been a year of inventory rebalancing for both Polaris and our dealers and we are focused on taking the necessary steps now to become more competitive.”
In fact, Polaris cited dealers’ inventory concerns as part of the reason for its reduced ATV sales. Overall, the company reported a 12 percent decline in third-quarter ATV sales as North American dealers’ inventories lowered slightly. Polaris also said a sluggish international market, particularly in southern Europe, has impacted sales.
“In light of (reduced orders) and the overall economic uncertainty surrounding consumer spending, going forward we will continue to reduce ATV production and shipments, continue aggressive promotional spending in addition to incremental advertising to help drive ATV retail sales,” Tiller said.
On a brighter note, Polaris said some of its newer ATV products, including the entry-level Hawkeye and two-up Sportsman X2, did well in the third quarter. The company also saw double-digit sales growth in the third quarter with its UTV line, the Ranger.
The company’s motorcycle line, Victory, also is performing well. Sales of Victory motorcycles shot up 60 percent in the third quarter of ’06 compared to the previous year’s third quarter. Year-to-date, the company’s motorcycle sales are up 28 percent to a total of $78.9 million. psb
Copyright 2006 Powersports Business