Polaris CEO Scott Wine said he expects a "no drama" 2020.
Polaris CEO says company has become more 'nimble' setting up a better 2020
January 29, 2020 at 3:26AM
Wine said the company has become more "nimble" with its sales organization, and trade-tariff effects — while still unpredictable — are smoothing out and new products are taking hold.
The company's stock increased nearly 6% Tuesday after reporting fourth-quarter results that beat Wall Street expectations.
While the motorcycle division's sales were up 37% with the introduction of the new Indian Challenger — as rival Harley-Davidson continued to struggle — snowmobile sales were down 10% as Polaris continued to adjust inventory for dealers.
Wine said during a conference call with analysts that the company has corrected its inventory issue and taken steps to prevent another. It also lowered prices on some all-terrain vehicles, correcting for price increases earlier in the year that affected sales, and the company lost some market share in the sector last year.
The ATV market continues to be a highly competitive area. "It always has been, and it probably always will be," Wine said.
Meanwhile, side-by-side sales are on the upswing, and the Medina-based company has plans in place to take advantage of the move.
Overall, the company reported net income of $98.9 million, or $1.58 a share, for the fourth quarter, up from $91.4 million, or $1.47 a share, in the same period a year ago. Adjusted for one-time items, income was $1.83 a share, beating Wall Street estimates of $1.79 a share. Overall sales were up 7% to $1.73 billion.
Innovation will continue to drive strategy for the company, Wine said, including the new Slingshot three-wheeled cycle and the Challenger.
The company has made adjustments to safety and quality in response to several flaws that led to fires and recalls, has put in place a new inventory control system, has worked on branding and has improved customer engagement, Wine said.
"But make no mistake, we still plan to win on product," he said.
With progress on tariff talks between the U.S. and China, no increases in retaliatory tariffs and some exemptions that resulted in $10 million and probably another $10 million for retroactive levies, Wine said the company has a bit more of a line on operational costs and plans to keep production where it is right now. The company, though, will re-evaluate that decision should the tariff situation change again.
Catherine Roberts • 612-673-4292
Companies are weighing the pros and cons of increasing inventory from overseas sources as in-coming president Trump pledges more tariffs, second U.S. port strike looms.
