Following a survey of Polaris and Arctic Cat dealers, Longbow Research analyst James Hardiman reported there has been little pickup in Q2 ORV sales.
Hardiman reported that second-quarter Polaris ATV and side-by-sides sales are up 4-5 percent to date, with 2 percent growth in April and 6 percent in May.
“It is encouraging that we did see an improvement in the month of May, although we are trending worse in 2Q than was the case in 1Q. Management did warn that 2Q growth would be the worst of the year, and so we could argue that expectations have been sufficiently lowered. However, given the 14% May run that PII shares had, the tepid 2Q results are somewhat disconcerting,” he wrote.
Arctic Cat has had positive sell-through trends, with 16 percent growth in March, however the Wildcat X and Wildcat 4 are not performing as well as expected, in part because dealers and consumers seem to be balking at the Wildcat X’s $1,500 price increase from the base model, Hardiman reported.
“Although ACAT sell-in trends appear to be quite healthy (following 16% March- quarter growth) we believe there is a disconnect with retail, where we are seeing lackluster sales for the segment, especially as we have now lapped the initial introduction of the Wildcat and are now shipping in Wildcat X and Wildcat 4 models that appear to be sparking meaningfully less interest,” he wrote.
Can-Am dealers reported increased sales of the Maverick side-by-side over the past few months, which is good news for BRP’s recent IPO.
“The news is not universally positive for BRP, however, in that many of these sales appear to be at the expense of the company’s own Commander side-by-side. Although it is somewhat difficult to diagnose, our dealer contacts believe that the Japanese players (Kawasaki, Yamaha, etc.) are the biggest share donors to the Maverick. However, it is difficult to envision a scenario in which this new entry is not at least limiting the growth of both the Polaris and Arctic Cat high-end recreational side-by-side offerings,” Hardiman wrote.