Polaris has released its third quarter 2022 earnings results which ended Sept. 30, 2022. The company reported worldwide sales of $2,341 million, up 32 percent versus the third quarter of 2021. Sales in the third quarter of 2022 were propelled by accelerated shipments towards the latter part of the quarter, as well as higher pricing and favorable mix.
North America sales of $2,069 million represented 88 percent of total company sales and increased 35 percent from $1,532 million in 2021. International sales of $272 million represented 12 percent of total company sales and increased 10 percent versus the third quarter in 2021.
As reported, third quarter net income from continuing operations attributable to Polaris of $190 million increased 63 percent and diluted earnings per share from continuing operations (“EPS”) of $3.17 increased 69 percent compared to the third quarter of 2021. Adjusted net income from continuing operations attributable to Polaris for the quarter was $195 million, up 58 percent and adjusted EPS was $3.25, up 64 percent, in each case as compared to the third quarter of 2021.
Gross profit margin increased 26 basis points to 23.9 percent. Adjusted gross profit margin of 23.9 percent increased 15 basis points driven by higher pricing.
Operating expenses were $317 million in the third quarter of 2022 compared to $273 million in the third quarter of 2021 due to higher sales and marketing and R&D expense. Operating expenses, as a percentage of sales, of 13.5 percent were down in the third quarter of 2022 compared to the third quarter of 2021.
“We maintained our focus on executing for customers, dealers and shareholders,” said Mike Speetzen, chief executive officer of Polaris Inc. “Our results were bolstered by easing supply chain headwinds that enabled us to increase ship volumes and take advantage of our strong pricing strategy, resulting in record sales in the quarter. We believe we are well positioned to meet our commitments for the year, while our team remains highly vigilant and agile should indicators point to shifts in consumer behavior or new market dynamics. Looking forward, our diverse portfolio, commitment to innovation, strong financial position and track record of successfully navigating in various operating environments gives me incredible confidence in Polaris’ ability to deliver long-term profitable growth and shareholder value.”
Off-Road segment results were primarily driven by these factors:
- Sales were driven by accelerated shipment volume, higher pricing and favorable product mix.
- Parts, Garments and Accessories (PG&A) sales increased 18 percent.
- Gross profit margin performance was driven by favorable pricing and higher volumes.
- Polaris North America ORV unit retail sales were down high-single digits percent. Estimated North America industry ORV unit retail sales were up low-single digits percent.
On-Road segment results were primarily driven by these factors:
- Sales were bolstered by sequential improvement in component availability driving increased shipments, stable demand, and higher pricing.
- PG&A sales increased 17 percent.
- Gross profit margin performance was driven by favorable product mix and higher volumes, which more than offset higher input costs and FX headwinds.
- North America unit retail sales for Indian Motorcycle were up high-single digits percent. North America unit retail sales for the comparable motorcycle industry were down low-single digits percent.
Marine segment results were primarily driven by these factors:
- Sales results were driven by accelerated shipment volume, higher pricing and favorable product mix.
- Gross profit margin performance was driven by higher input costs offset by favorable product mix.
2022 Business Outlook
The Company now expects 2022 sales to increase 15 percent to 16 percent versus prior guidance of 13 percent to 16 percent. The Company expects adjusted diluted EPS from continuing operations attributed to Polaris Inc. common shareholders to be in the range of $10.10 to $10.30 for the full year 2022, unchanged from prior guidance.