Polaris CEO gives strategy overview in Capital Markets Day report

Polaris Inc. hosted its 2025 Capital Markets Day meeting on Wednesday, March 12. During the event, Polaris provided an overview of the powersports industry and the company’s long-term strategy to remain an industry leader while executing a number of initiatives to meet its mid-cycle financial targets. During the two-hour-long briefing, Polaris’ leadership also discussed its commitment to dealers, innovation, and customers.

“The actions we are taking today give me confidence we will emerge stronger when the powersports market returns to growth,” comments Mike Speetzen, Polaris CEO. “Our teams are focused in the right areas to not only continue our leadership in powersports but also to improve the financial strength of Polaris, which I believe will ultimately lead to creating shareholder value.”

Speetzen says the current market environment needs some context. He thought it was a good opportunity to provide an update on the market conditions, which weren’t at the top of his mind when the meeting invites were sent out in September. “We weren’t necessarily thinking about the current environment [in September]. The point of this discussion is to reinforce the strategy and talk more long-term about the setup that we’ve got going for the company, which we think is strong when we talk about this down cycle that we’re in.”

According to Speetzen, a recession is defined as two successive down quarters. “You look at each one of our segments, and we’re well past that. That’s no surprise to most of you; there’s been a lot of fallout from this. It’s a bit staggering when you look at the number of competitors who are either exiting categories, shutting down completely, or have filed for bankruptcy and gone through that process.

Speetzen says Polaris is the best house in a recovering neighborhood. “We’re trying to work on ensuring that this company is positioned incredibly well so that when the recovery comes, we will be positioned better than anybody else to take advantage of that and grow the company.”

Promos

Speetzen acknowledges they’ve fielded a lot of questions about promotions. “Yes, it is elevated,” he says flatly. “We’ve got consumers who are stressed. From a debt perspective, interest rates are high, but we also have a lot of competitors who haven’t managed their inventory with our level of discipline, which puts a lot of pressure on the market.”

Speetzen says they won’t respond to all of the channel’s promotional activity and that Polaris will not discount its newer technology. “Quite frankly, that’s not sustainable share, so we’re trying to be as disciplined as we can and make sure that we’re pointing promo in the right areas, whether that’s targeted offers to specific consumers, broad offer categories getting aggressive around financing, given that interest rates are likely to stay high for longer.”

Speetzen also discussed the EV category and its expanded relationship with Zero Motorcycles. “We talked about EV at our last Capital Markets Day. I still feel good about the positioning that we took. If you remember, I said I didn’t think EVs would move rapidly through powersports. There are a lot more challenges within the powersports category. And in fact, that’s what made us different than most. We listened to customers and let that guide where we went…”

Polaris is not investing in electric vehicles at the same levels they thought they would previously. “At this point, just given how much slower that market has developed, we are continuing to make advancements. And I’ll be honest with you: we learned a lot through this relative to connected vehicles; we’ve been able to watch and see how consumers are using that, and that’s feeding back into how we’re thinking about the development of the next generation of vehicles. And we also partnered with Zero Motorcycles to get our powertrain up and running quickly. We’ve since modified the relationship with them.”

Speetzen remarks that they reduced their salaried workforce by about 10%, many of which were at the vice president level. “That shows how we’ve flattened the organization, and it will allow us, as the recovery comes, to keep our operating expenses down and put ourselves in a position to leverage that as we go into the future.”

Dealers

The Polaris CEO continues to highlight its commitment to dealers. “[We’re] going to be with dealers in Nashville in a couple of weeks for a dealer council meeting. We will take them to our Huntsville plant and walk them through what we’re doing with Lean. They have a lot of curiosity around that, and we are listening to what they’re talking about. We take it seriously. Given how rapidly the market moved down, it was about getting the dealer inventory down. That was a challenging thing for us to accomplish.

Dealers have pushed back on inventory to keep them at acceptable levels for the market conditions. Speetzen says that is a priority, but Polaris is a huge company. “We’ve got supply chains that are in motion. We had materials on the ocean four weeks out, and we’ve got factories that we’ve got to manage. We’ve got employees to contend with in terms of ensuring we’re managing that system. We downshifted through the course of the year (2024).”

The CEO says Polaris helped dealers during that transition period by providing things like extended flooring. “We did things like providing additional promo to help dealers navigate through that challenging time period, and I’m proud that we got inventory down 16%. We led the industry and made sure that we held firm to that commitment. We’ve had a lot of questions about inventory in 2025, and there are still pockets that we have to make adjustments to.”

The lack of snowfall during the season and in the flatlands has put a lot of pressure on Polaris’ snowmobile business, Speetzen notes. “We’ve cut the [snowmobile] builds to get our inventory down. And we’re making a few minor tweaks in the marine segment. Then, within off-road, we’re bringing the recreation side down a bit more, given the persistent weakness in that category, and pulling the utility side up, given it remains stronger year-over-year than the recreational side of the business.”

R&D

When asked about cutting some of the R&D budget, Speetzen says firmly they won’t do that. “We learned a lot through the last down cycle. Polaris became number one because we kept investing, outpaced the Japanese, and overtook them all. And we’re not going to back off of that. The products we’ve come out with over the past four years is pretty impressive, but it’s not going to stop.”

Speetzen outlines that innovation will be the key for Polaris to gain market share in the future. “Once this starts to recover, we want the right products that customers will want, and we think we got ourselves well positioned to do that.”

Ridership

Speetzen emphasizes Polaris’s partnership with its dealers and how they’ve been able to grow the sport. “We’ve brought in over 1 million new customers. Powersports is a business that has many recurring, repeat customers. The fact that we’ve brought in over a million new customers, I think, speaks to the strength of the brand.”

Ridership is up 10% compared to the time period before Covid, Speetzen notes. “It’s a great indicator for us now, and a lot happened from pre-Covid to where we are today. We saw a surge in demand in 2021-’22. We also saw a surge in ridership during that time period, starting in ’23 and tailing off. And that correlates pretty heavily with people returning to the office.”

Interest Rates

With interest rates still high, Speetzen says it has created some fatigue and a lot of pressure in the market. “The tariff situation makes that worse. People are worried because they’re unsure if daily life will return to being more expensive. The report that inflation came down a tick and was slightly better than people expected at 2.8, but every article I read said this has no impact. And I think you have consumers stepping back on big-ticket items.

Speetzen says that dealer inventory will continue to be a big focus in 2025 as Polaris navigates this promo environment. “Just yesterday, we rolled out some promos for finance interest. My message to the team has been that we have to remain agile. We can’t put a promo plan together once a quarter and then look at it. This is a daily thing that we’ve got to manage. And from a tariff standpoint, it changes by the hour, and anything that we would say today will probably be wrong tomorrow.”