Polaris Industries reported record earnings for its first quarter after seeing U.S. retail sales increase in nearly every one of its product categories.
Driven by increasing ATV, UTV and on-road bike sales, Polaris recorded a 16 percent increase in revenue, totaling $361.7 million, and more than doubled its net income from the year-ago quarter.
“We actually expected to return to growth in the first quarter,” Polaris CEO Scott Wine said during the company’s earnings report, “but I’m quite pleased the team exceeded our expectations and delivered a strong 16 percent top-line growth number.”
Polaris also has increased its sales and net income expectations for the full year as its
U.S. retail sales grew 9 percent in its first quarter.
The only area the Minnesota manufacturer saw a falloff was in snowmobiles, which was hurt by a poor weather month in March. The company’s snowmobile retail sales were off around 20 percent, company officials said.
However, the company’s largest segment — UTVs and ATVs — saw healthy sales jumps. Bennett Morgan, Polaris’ president and chief operating officer, said the company’s U.S. retail sales for this overall category increased 20 percent over a year ago. That included a flat quarter for core ATVs but a considerable rise for its side-by-sides. Morgan said the UTV sales growth has included the company’s new RZR 4, its first four-seat sport UTV, and its value-priced Ranger 400.
Victory Motorcycles also has seen retail sales and market share gains. Polaris officials said the new touring bike models, the Cross Roads and Cross Country, helped the company raise its retail sales in the mid-teens percentage-wise.
Another growth area for Polaris is its international sales, which grew 41 percent over a year ago. Part of that increase was attributed to positive currency effects.
International sales figure to only grow in the future as Polaris CEO Wine said the company is working with a distributor partner in China to open up its first dealership this month.
“We have a great distribution partner, a very, very large Chinese automotive company that has significant off-road experience,” said Wine, who visited China in early April. “They will open their first showroom in early May and we really like the potential there to go after the middle-class market. I think the sales will be well below $10 million for 2010, but with significant upside potential over the next several years.”
Polaris Chief Financial Officer Mike Malone noted the company continues to see stabilization in the retail lending market. Through its retail lending partners — Sheffield Financial, HSBC and GE Money — the approval rate for retail loans is at 53 percent, nearly the same as last quarter but a significant 9 percentage points higher than a year ago.
Dealer losses for the company declined to four in the past quarter. In contrast, Polaris had 12 closures in the fourth quarter of 2009. Polaris has had 70 dealer closures since the fourth quarter of 2008.
Copyright 2010 Powersports Business