In a research note titled “1Q17: Gaining Traction in a Muddy Environment,” BMO Capital Markets analyst Gerrick Johnson that while Polaris “EPS came in better than estimates, North American ORV retail sales were disappointing, declining ‘mid-single-digits’ percent. Despite the miss on retail, which we thought was trending positive earlier in the quarter before the onset of poor March weather, we believe the business is headed in the right direction.”
Johnson goes on to report that retail sales for Polaris in North America “decreased -6% in the quarter on a year-over-year basis, with North American ORV retail sales declining by mid-single-digits percent (SxSs down -LSD and ATVs down -LDD). However, we suspect that many bears were looking for worse. Despite claiming that 1Q was ahead of its internal expectations, including retail sales, Polaris maintained its 2017 full-year guidance. The company still expects adjusted EPS to be in the range of $4.25 to $4.50, midpoint of $4.38.
Johnson adds that BMO Capital Markets was “mildly encouraged by the company's financials as well as commentary on its conference call. We upgraded shares in mid-January on the belief that business is (slowly) improving. We believe that continues to be the case.”
Dealers who completed the Q1 2017 Powersports Business/BMO Capital Markets Dealer Survey will be receiving their 26-page analysis of the survey results this week. Dealers interested in being added to the Q2 survey list should send a note to PSB editor Dave McMahon at firstname.lastname@example.org.