Issue link: http://read.dmtmag.com/i/511164
10 • May 25, 2015 • Powersports Business FINANCIAL www.PowersportsBusiness.com Polaris sees sales increase, while Harley experiences a dip in Q1 sales Polaris Industries Inc.'s first quarter was another record period for the OEM, as it racked up a 16 percent sales increase from Q1 2014. Polaris reported record first quarter net income of $88.6 million, or $1.30 per diluted share, for the quarter ended March 31, an increase of 9 percent from the 2014 first quarter net income of $80.9 million, or $1.19 per diluted share. North American retail sales increased 8 percent in the first quar- ter. Sales for the first quarter 2015 totaled $1.03 billion, which represents an increase of 16 percent from last year's first quarter sales of $888.3 million. "I am pleased to report record sales a n d e a r n i n g s f o r our 2015 first quarter, with sales up 16 percent, operating income up 19 percent and net income up 9 percent, our 22nd consecutive quarter of record earnings performance," commented Scott Wine, Polaris' chairman and CEO. "We outperformed the market again in most of our businesses in spite of increased competi- tive promotional pressures, weakening global markets and the corresponding negative effect from currencies. While we are justifiably proud of these accomplishments, we remain focused on seizing the numerous opportuni- ties we missed to perform better. From factory inventory being too high to ongoing produc- tion inefficiencies, particularly in motorcycles, we did not perform to our capabilities or our expectations. However, we are making great strides towards addressing these issues, and I am confident those efforts will allow us to continue outperforming our markets." Wine continued, "My confidence comes first and foremost from the skill and passion of Polaris' 8,000 team members. Our team has never been stronger or deeper, demonstrated by the recent internal promotions of Chris Wolf and Craig Scanlon, both 10-plus- year Polaris veterans, to run our Snow- mobile and Slingshot businesses, respectively, following Mike Joni- kas's retirement. Second, product innovation remains a significant growth driver. During the quarter, we added to our stable of innova- tive motorcycles with the introduc- tion of the Indian Chief Dark Horse, the Victory Magnum X-1 and a limited edition Slingshot SL. Additionally, we unveiled seven new mountain snowmobiles incorporating our award-winning Axys chassis, making the best mountain sled, the Polaris RMK, even better. And we expanded our manufacturing footprint to China, while extending the breadth and reach of our ORV business, with the acquisition of Hammerhead Off-Road, which produces light gas and electric utility vehicles and gaso- line powered go-karts." For the quarter, off-road vehicle sales increased 11 percent to $645.4 million; snow- mobile sales totaled $14.5 million for the 2015 first quarter compared to $15.6 million for the first quarter of 2014, and motorcycle sales increased 74 percent to $137.4 million. WORLDWIDE, U.S. RETAIL SALES DOWN FOR H-D In the first quarter of 2015, worldwide retail sales of new Harley-Davidson motorcycles decreased 1.3 percent compared to last year's first quarter. Dealers worldwide sold 56,661 new Harley-Davidson motorcycles in the first quarter of 2015 compared to 57,415 motorcycles in the year-ago quarter. In the U.S., dealers sold 35,488 new motor- cycles in the quarter, down 0.7 percent com- pared to sales of 35,730 motorcycles from Q1 2014. The company believes increased, aggressive competitive motorcycle discounting was among the factors adversely affecting first- quarter U.S. retail Harley-Davidson sales. In international markets, dealers sold 21,173 new Harley-Davidson motorcycles during the quarter compared to 21,685 motor- cycles in the year-ago period. Unit sales were up 5.7 percent in Canada. "Given the first-quarter retail results and ongoing, increased levels of aggressive compet- itive discounting in the U.S., which we expect will continue, we are taking the precautionary step of lowering our estimated growth rate for full-year motorcycle shipments in order to manage supply in line with demand and protect the premium nature of our brand," said Keith Wandell, chairman, president and CEO of Harley-Davidson, Inc. Harley-Davidson Q1 2015 diluted earnings per share increased 5.0 percent to $1.27 com- pared to diluted EPS of $1.21 in the year-ago period. Net income was $269.9 million on con- solidated revenue of $1.67 billion compared to net income of $265.9 million on consolidated revenue of $1.73 billion in last year's first quar- ter. Revenue in this year's first quarter was down from the year-ago period primarily on unfavorable foreign currency exchange and slightly lower motorcycle shipments. "While the first quarter had its share of headwinds, our business is strong, and we remain clearly focused on executing Harley- Davidson's strategy to be customer-led in everything we do, grow our reach among new customers in the U.S., grow internationally and continuously improve every aspect of our oper- ations," Wandell said. "We continue to manage Harley-Davidson for long-term performance from a position of great strength." PSB Polaris reports another record quarter of $888.3 million. "I am pleased to report record sales a n d e a r n i n g s f o r our 2015 first continue outperforming our markets." Wine continued, "My confidence comes first and foremost from the skill and passion of Polaris' 8,000 team members. Our team has never been stronger or deeper, demonstrated by the recent internal promotions of Chris Wolf and Craig Scanlon, both 10-plus- year Polaris veterans, to run our Snow- mobile and Slingshot businesses, respectively, following Mike Joni- we added to our stable of innova- tive motorcycles with the introduc- tion of the Indian Chief Dark Horse, Polaris motorcycle sales grew 74 percent in the 2015 first quarter.