Second Quarter Highlights:
- Sales increased 11% year-over-year to a record $1,124.3 million
- North American retail sales increased 11% year-over-year
- Net income increased 4% to $100.9 million. Gross profit margin declined 166 basis points due to currency impacts and incremental manufacturing costs of $9 million related to motorcycle paint constraints
- Motorcycle demand remained strong throughout the second quarter
- Maintaining and narrowing full year 2015 earnings guidance range to $7.32 to $7.42 per diluted share, an increase of 10% to 12% year-over-year based on full year 2015 sales growth guidance of 10% to 12%
Polaris Industries Inc. (NYSE:PII) today reported record second quarter net income of $100.9 million for the quarter ended June 30, 2015, an increase of four percent from the prior year’s second quarter net income of $96.9 million. Earnings per share were a record $1.49 per diluted share for the second quarter of 2015 compared to $1.42 per diluted share for the second quarter of 2014. Second quarter results included additional manufacturing costs and inefficiencies approximating $9.0 million, as the Company worked to scale-up production and add capacity to the paint system at the Company’s motorcycle facility in Spirit Lake, Iowa. Sales for the second quarter 2015 totaled a record $1,124.3 million, an increase of 11 percent over last year’s second quarter sales of $1,014.0 million.
“In addition to reporting record second quarter sales and earnings, there are numerous positive undertones to our results this quarter. Motorcycle demand, notably including Slingshot, remains exceptionally high. Our Asia Pacific/Latin America business continues to grow and we are encouraged by the favorable response to the Multix launch in India last month. Between ongoing improvements in our inventory management systems and North American retail sales growing 11 percent, dealer inventory growth moderately decelerated in the second quarter,” stated Scott Wine, Polaris’ Chairman and Chief Executive Officer. “However, earnings were dampened by significant cost pressures, and delayed shipments, related to continued difficulties with our new motorcycle paint system in Spirit Lake, Iowa. We pulled out all the stops to increase throughput in an effort to meet the growing demand for our Indian, Victory and Slingshot customers, accepting the substantial costs commensurate with that push. Although production still cannot keep pace with demand, we are confident in our plans to further increase our motorcycle throughput in the second half of the year, and as such, are maintaining and narrowing full year guidance for sales and earnings per share.”
Wine continued, “Innovation remains a cornerstone of Polaris’ success, and at our dealer show next week we will introduce our model year 2016 powersports lineup that will further extend our market leadership. In spite of the short-term headwinds we are facing, both external and of our own making, I am confident this strong and talented Polaris team can continue to deliver industry-leading returns for our shareholders.”
2015 Business Outlook
For the full year 2015, the Company is narrowing its earnings guidance range to $7.32 to $7.42 per diluted share, an increase of 10 to 12 percent over full year 2014 earnings of $6.65 per diluted share. Full year 2015 sales are now expected to grow in the range of 10 to 12 percent when compared to 2014, narrowed slightly from previously issued sales guidance.
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