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Arctic Cat fiscal quarter sales likely up 10 percent, analyst says

Expect Arctic Cat to report fiscal quarter sales growth of 10 percent, according to a research note from BMO Capital Markets analyst Gerrick Johnson that was provided to Powersports Business.

Arctic Cat’s fiscal 2Q2104 results are anticipated to show “75 percent growth in side-by-side vehicle sales, benefitting from growth in core Wildcat vehicles and incremental sales from the Wildcat four-seater,” Johnson reports. “We are looking for 6% growth in ATV sales, which could end up being too optimistic. We think good side-by-side sales should help generate 7% growth in parts and accessories.”

Sales in the quarter of Arctic Cat snowmobiles could be a “potential area of weakness, where we expect 2Q14 sales to decline 3.6%. Snowmobiles represent almost 50% of Q2 sales,” Johnson writes. “While ACAT snowmobile dealers seem optimistic about the new ‘Yama-Cat’ ACAT snowmobiles that incorporate Yamaha’s high quality four-stroke engines, most also complain about very high inventory levels. We also believe ACAT shipped some ‘sleds’ early, which helped grow that business by 25% in 1Q and ended up being the difference in achieve 1Q sales estimates despite lower-than-expected sales of off-road vehicles. This additional channel fill, after a lackluster MY2013, could put pressure on the company’s ability to meet 2Q snowmobile expectations.”

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