MEDINA, Minn. – SSVs have been the star this year as Polaris Industries Inc. tallied a record $755.4 million in second quarter sales, an increase of 24 percent over last year’s second quarter sales of $607.9 million, the company reported today.
“While the weak U.S. economy and likely recession in Europe are concerning, we continue to see strength in our core North American Powersports business,” said Polaris CEO Scott Wine. “Our investments in adjacent markets and international expansion are paying dividends, and we are excited to have Eicher Motors Limited as a joint venture partner to aggressively pursue growth in India. The strong second quarter results were driven by solid strategic execution combined with end-market demand that is healthier than a year ago.”
North American retail sales to consumers were up 17 percent during the quarter.
North American ORV dealer inventories were up a low double-digit percentage from the second quarter of 2011 to keep up with demand for SSVs.
Off-Road Vehicle (ORV) sales increased 20 percent from the second quarter 2011 to $581.1 million on market share gains in ATVs and SSVs. Polaris North American ORV unit retail sales were up more than 15 percent from the second quarter last year, with consumer purchases of SSVs climbing more than 20 percent and ATV retail sales up nearly 10 percent. The company estimates the North American industry ORV retail sales increased by a low double digit percentage from the second quarter of 2011.
The weak international economy drove down sales of ORVs outside of North America by 8 percent compared to the second quarter 2011.
Sales in the On-Road Vehicles division, comprising mainly Victory motorcycles but also including Indian motorcycles and GEM and Goupil electric vehicles, increased 110 percent over the same period last year to $64.7 million.
North American industry heavyweight cruiser and touring motorcycle retail sales increased by low single digits compared to the prior year’s second quarter. Over the same period, Victory North American consumer unit retail sales increased more than 10 percent. North American Victory dealer inventory increased over 2011 levels to support the retail sales increases, market share gains and new product launches of the Victory Judge and Victory Hard-Ball.
Polaris sales of On-Road Vehicles to customers outside of North America, now including Goupil, increased more than 130 percent during the 2012 second quarter compared to same period last year. The 2011 acquisitions of Indian, GEM and Goupil contributed more than a third of On-Road Vehicles’ second quarter sales growth.
PG&A sales increased 15 percent compared to the same period last year. The increase was primarily driven by higher ORV and Victory motorcycle-related PG&A sales.
The company credited a mix of higher-priced products shipped during the 2012 second quarter for snowmobile sales totaling $8.9 million, up from $6.8 million for the second quarter of 2011.
Foreign sales totaled $111.5 million for the 2012 second quarter, a 7 percent increase over the same period in 2011. Unfavorable currency fluctuations negatively impacted sales outside North America by 5 percent during the 2012 second quarter. The increase in the second quarter sales was driven by the additional sales from the Goupil acquisition as well as higher sales of Victory motorcycles and a 38 percent increase in Asia/Pacific region sales, offset by lower ORV sales, primarily in Europe, due to sluggish economic conditions and the weak currencies.
Income from financial services was up 49 percent to $8.2 million during second quarter 2012 compared to $5.5 million in the second quarter of 2011, attributed to increased profitability generated from retail credit portfolios with GE, Capital One and Sheffield and higher income from the dealer inventory financing through Polaris Acceptance.
“We are extremely pleased with our success during the second quarter, but we remain mindful of the uncertainty surrounding the overall economic environment in Europe and North America. As we continue investing in our future growth, such as the recently announced joint venture with Eicher, we are prepared to react quickly to sales velocity changes in our businesses,” Wine said. “Given the ongoing strength in our overall business as well as the anticipated success of several new model year 2013 vehicles to be unveiled next week at our dealer meeting, we are raising our expectations for sales and earnings for the full year 2012.”
Based on performance in the first half of 2012 and projections for the remainder of the year, the company increased its 2012 full year guidance to sales growth of 14 percent to 17 percent over 2011, with earnings in the range of $4.05 to $4.15 per share, up from $3.20 per share for 2011.
Posted by Holly Wagner