Polaris’ sales for the first quarter, ended March 31, totaled $312.0 million, down 20 percent compared to sales of $388.7 million for the 2008 first quarter.
Off-road vehicle sales during the first quarter 2009, which included sales of both core ATV and Ranger side-by-side vehicles, decreased 19 percent from the first quarter 2008; snowmobile sales decreased 13 percent; sales of Victory motorcycles decreased 49 percent; and sales of parts, garments, and accessories decreased 15 percent, due primarily to lower retail sales of Polaris vehicles.
The OEM says ATV dealer inventory levels in North America finished 18 percent lower at the end of the first quarter 2009 than at the end of the first quarter 2008; Victory motorcycle dealer inventory was 24 percent lower; and the company says snowmobile and side-by-side vehicle inventories remain at “acceptable” levels.
Scott Wine, CEO, Polaris Industries, says the company has continued to adjust production levels to match retail demand. Still, “Both our dealers and Polaris believe dealer inventory is still too high,” Wine says, “and we are committed to working with them to further reduce inventories throughout the year.”
Polaris’ income from financial services decreased 41 percent to $4.4 million in the first quarter 2009 from $7.5 million in the first quarter of 2008. The company says the decrease was primarily due to revolving retail credit provider HSBC eliminating the volume-based fee income payment as of March 1, 2008.
Polaris has relationships with HSBC Bank, GE Money Bank and Sheffield Financial to provide retail revolving and installment financing credit to consumers. The OEM says 44 percent of first quarter consumer retail credit loan applications were approved by either HSBC, GE or Sheffield, below the fourth quarter 2008 approval rate of 51 percent. Thirty-one percent of Polaris retail customers in the United States financed their Polaris product purchases through HSBC, GE or Sheffield, which the OEM says is “consistent” with the fourth quarter 2008 penetration rate.
Polaris expects sales in the second quarter to be down 25 to 30 percent compared to the second quarter of 2008, and expects full year sales to be down 15 to 23 percent compared to 2008. Full year off-road vehicle sales are expected to be down 17 to 25 percent, snowmobile sales are expected to be down 10 to 20 percent, Victory sales are expected to be down 25 to 40 percent, and PG&A sales are expected to be down nine to 13 percent.
Polaris expects to lose approximately 5 percent of its dealers this year. The OEM lost 13, or less than 1 percent, of its dealers in the first quarter.
“While the outlook for the remainder of 2009 remains challenging, we continue to proactively take steps to streamline our business and optimize our cost structure,” Wine says. “Going forward, our strategy remains unchanged; we will continue to leverage our innovation, speed to market and flexible manufacturing capabilities to gain market share while focusing on improving our operating margins. The economic climate remains uncertain and we are cautious about the near-term demand environment.”
- Submitted by Guido Ebert