A survey of more than 230 dealers from 45 states and Canada by Powersports Business and RBC Capital Markets points to first quarter momentum.
RBC Capital Markets analyst Ed Aaron released his research note on the survey Thursday morning and points to first-quarter "sales trends that appear broadly favorable. Responses skewed positively in each of the eight categories we track with the exception of snowmobiles. Side-by-sides continue to lead the way, with Polaris outperforming. Significant outperformance among larger dealers also suggests that our survey results understate current trends."
Aaron goes on to write that there's "little evidence to suggest that competitive dynamics in side-by-side are beginning to move against Polaris, as some investors fear. Polaris dealers are in fact slightly less concerned about side-by-side competition than they were six months ago. While Arctic Cat's new Wildcat product is gaining recognition, Polaris dealers still overwhelming view Can-Am as the No. 1 challenger to Polaris in side-by-side."
Aaron expects Polaris to report another quarter of strong growth in North America retail sales during its April 18 earnings release. "We believe accelerating trends in ORVs and motorcycles should more than offset the impact of weak snowmobile P&A sales. While still early in the year, we do not see evidence to suggest that ORV retail sales will decelerate to the extent that guidance currently reflects."
In addition, the survey found that nearly half of all Polaris dealers reported double-digit sales increases for Ranger/RZR products compared to the first quarter of 2011.
Aaron notes that the "difference in performance between smaller and larger dealers is striking. There seems to be a very clear positive relationship between dealer size and performance level. Large dealers were significantly more satisfied with Q1 sales performance than were smaller dealers. For perspective, 55 percent of dealers with annual sales of at least $10 million reported that Q1 sales exceeded their expectations, while only 9 percent reported below-plan sales. At the other end of the spectrum, only 21 percent of dealers with sales under $1 million annually reported above-plan sales in Q1, vs. 56 percent reporting below-plan sales."
Look for more analysis and dealer insight into the survey in the April 30 edition of i>Powersports Business. Thanks to the dealers who made the Q1 2012 survey the most comprehensive report in the industry about the current state of the industry. Dealers who want to join future quarterly surveys can send their name, email and dealership name to firstname.lastname@example.org.