SSV sales, up 20 percent, keep Polaris on a tear in 2012

Publish Date: 
Jan 29, 2013

MINNEAPOLIS, Minn. – SSVs and ATVs continue to propel profits at Polaris Industries Inc., with North American sales of SSVs up more than 20 percent and ATVs up in the “high single digits” percent in the fourth quarter of 2012, even as foreign sales slipped 9 percent.

“In 2012, Polaris exceeded $3 billion in sales for the first time and operational improvements drove net income margin above 9.7 percent, even as we continued to invest in numerous diversification and growth opportunities,” said CEO Scott Wine. He also hinted that better logistics this year will benefit the company and dealers.

“We cannot realize the promise of [our] products unless we efficiently bring them to market,” he said. “Between the Max Velocity Program for off-road vehicles and the Retail Flow Management process we are implementing for motorcycles, we foresee logistics becoming another vehicle driving us towards our sales and earnings goals.”

For the 2012 fourth quarter, North American ORV unit sales were up by a mid-teens percentage from the fourth quarter last year, against Polaris’ estimates that North American industry ORV retail sales rose mid-single digits percent from the fourth quarter of 2011. The company saw ORV sales of $567.1 million in the fourth quarter of 2012, a 22 percent increase from the 2011 quarter.

Foreign businesses continued to gain market share, but sales of ORVs outside of North America decreased 9 percent in the fourth quarter, primarily due to weaker demand in Europe.

On-road vehicles, mainly Victory motorcycles but also including a limited run of Indian motorcycles and GEM and Goupil electric vehicles, increased 36 percent in the 2012 fourth quarter to $47.4 million.

The company reported strong consumer demand for Victory motorcycles across global markets, partly because of improved distribution. Victory North American consumer unit sales increased in the fourth quarter and increased more than 10 times the industry percentage growth rate for the full year 2012. Abroad, on-road vehicle sales increased more than 50 percent during the 2012 fourth quarter. For the full year 2012, Polaris on-road vehicle sales increased 64 percent compared to the prior year.

PG&A sales increased 17 percent during the fourth quarter compared to the same period last year. Foreign PG&A sales increased 16 percent during the 2012 fourth quarter. For the full year PG&A sales increased 13 percent compared to the prior year.

International sales totaled $138.9 million for the 2012 fourth quarter, up 6 percent over the same period in 2011. The bump in fourth quarter sales resulted from a 19 percent combined increase in sales to customers in the Asia/Pacific and Latin American regions, along with higher sales of snowmobiles and Victory motorcycles and incremental sales from the Goupil acquisition. That was largely offset by lower ORV sales, primarily in Europe, due to sluggish economic conditions

Snowmobile sales decreased 9 percent to $154.6 million for the fourth quarter of 2012, compared to $169.2 million for the fourth quarter of 2011. The company attributed the decrease to its decision to escalate early season snowmobile shipments into the 2012 third quarter to coincide with the start of the consumer snowmobile selling period. Polaris season-to-date market share through December 2012 increased in an industry it says is down less than 5 percent season-to-date in North America. Sales of snowmobiles outside of North America, principally in the Scandinavian region and in Russia, increased 15 percent over the 2011 period in the fourth quarter of 2012. Full-year sales of snowmobiles increased 1 percent compared to the prior year. During the quarter Polaris acquired KLIM.

“Between the Indian launch and the much-anticipated release of our jointly developed product with Bobcat, 2013 will be an exciting year for new vehicles,” Wine said. “We are also enthusiastic about the potential KLIM, which we acquired in the fourth quarter, brings to our PG&A offering, providing both additional growth opportunities and attractive margin characteristics through its strong apparel brand.” (continued)