Polaris points to 'unexpected operational challenges' amid earnings miss

By James Rogers

Polaris shares are down in premarket trades

Polaris Inc. shares fell 5.1% in premarket trades Tuesday after the maker of all-terrain vehicles reported fourth-quarter earnings that missed expectations.

The company (PII) said its fourth-quarter net income fell to $103.4 million, or $1.81 a share, from $195.5 million, or $3.36 a share, in the prior year's quarter. Adjusted earnings per share was $1.98. Fourth-quarter revenue was $2.289 billion, down from $2.404 billion in the prior year's quarter. Analysts surveyed by FactSet were looking for earnings of $2.57 a share and sales of $2.245 billion.

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Polaris said that fourth-quarter sales were impacted by lower volume, net pricing driven by higher promotional spend and higher finance interest. "Earnings per share performance came in below our expectations due to unexpected operational challenges," said Polaris CEO Mike Speetzen, in a statement. "However, the team has identified and has already begun making meaningful progress on our efficiency and margin initiatives for 2024 and beyond."

Polaris said it expects 2024 sales of $8.309 billion to $8.488 billion, a 5% to 7% decrease from 2023. Analysts surveyed by FactSet are looking for 2024 sales of $8.495 billion. The Medina, Minn.-based company expects 2024 adjusted EPS to be $7.79 a share to $8.24 a share, a 10% to 15% decrease from 2024, below the FactSet estimate of $8.83 a share.

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"As reflected in our outlook, segments of our industry are expected to remain challenged in 2024, but we believe we will continue to capture market share with our robust lineup and new products coming later this year," said Speetzen, in the statement.

Polaris shares have fallen 19.3% in the last 52 weeks, compared with the S&P 500 index's SPX gain of 20.9%.

-James Rogers

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01-30-24 0822ET

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