An "unprecedented" demand for off-road vehicles is helping Polaris crawl back from a near-complete shutdown of dealers and temporary suspension of production in the spring, said CEO Scott Wine.
Polaris recovering from shutdown with 'unprecedented' demand for off-road vehicles
Dealership closures led to big losses, but company said it has good inventory for rest of year.
July 28, 2020 at 11:58PM
Despite the uptick, Medina-based Polaris on Tuesday said sales for the second quarter were $1.5 billion, down 15% from the same period last year. The company has a net loss of $88 million, or $1.42 per diluted share.
"Our broad array of best-in-class products provided an attractive social-distancing solution for both existing, and encouragingly, a wide range of new Powersports customers," Wine said in a statement. "During the quarter, we navigated a level of uncertainty and unrest that is unparalleled in our nation's history, beginning with rapidly and successfully restarting our production facilities, while protecting the health and safety of our employees."
Retail sales from dealers were driven by an influx of new customers with greater than 100% increases to new customers in both May and June.
To help new riders and its existing owners, Polaris announced a new digital strategy this week to make vehicle ownership easier. The company's RideReady program through participating dealers makes ownership easier through online scheduling of service and maintenance.
Owners can set up a "virtual garage" and have the option of scheduling service appointments online or request pickup services or remote-service options from participating dealerships. Do-it-yourself owners get online access to parts catalogs, service manuals, maintenance calendars and access to a how-to library among other services.
The company has been successfully testing the program in markets in Texas and Minnesota and is ready to roll it out more widely. It is a new initiative lead by Vic Koelsch, the company's first digital officer.
"Whether you are a do-it-yourselfer, have a curious mind or prefer to have a certified professional service your vehicle, RideReady was designed with powersports owners in mind," Koelsch said in a statement.
Polaris temporarily shut down plants, and dealers were required to close because of stay-at-home orders to stem the spread of the coronavirus. But North American consumers searching for family friendly outdoor activities proved eager buyers. The company reported that both off-road and motorcycle sales increased in the quarter with North American retail sales up 57% in the second quarter, compared to second quarter last year.
Demand for off-road vehicles and motorcycles continued into July, Wine said.
The company went into July with historically low dealer inventory, which along with the continued demand leaves the company well-positioned for the rest of the year, he said.
The results gave the company enough confidence, officials said, to reinstitute guidance for the rest of the year.
Full-year 2020 adjusted earnings are expected to be $6.40 to $6.60, which is up from the $6.32 per diluted share for 2019. Sales are expected to be flat to down 2% at a range of $6.65 billion to $6.75 billion, because of the second-quarter shutdowns.
Shares of Polaris closed at $105.26 per share, up 7.4% on the day. The move put Polaris shares in positive territory for the year, up 5% year-to-date.
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