Consumer caution and backed up inventory hit Polaris hard in the third quarter, resulting in an 80% drop in profits.
Company leaders said Tuesday that consumers continue to put off buying larger discretionary items, hitting the largest powersports manufacturer.
CEO Mike Speetzen said while the Federal Reserve’s interest rate cut in September (a greater-than-expected half a percentage point) helps, there will have to be more action to convince a majority of consumers to buy items that most likely need to be financed.
Speetzen told analysts Tuesday he believes the remainder of 2024 will be challenging and the conditions will continue into 2025.
The Medina-based maker of all-terrain and utility vehicles, motorcycles, snowmobiles and pontoon boats said Tuesday it earned $27.7 million, or 49 cents a share. Sales were down 23% to $1.7 billion.
Shares of Polaris ended the day at $72.21, down nearly 10%.
The company also lost market share as dealers more deeply discount older models from competitors that have been on the lot for a year or two, executives said. Dealers have been willing to take losses on those older models so they no longer have to pay interest on aging inventory.
That level of inventory backup surprised Polaris officials, but they said they are not going to follow suit in most cases. While the company will need to protect market share in some instances, Speetzen said it doesn’t make sense to match the discounts when the Polaris vehicles on the lots are newer.
