Polaris and Indian 2017 Financial Report
A rosier outlook than Harley's
A couple of days ago we reported on the somewhat gloomy news from Harley-Davidson about its year-end financial statement, in which it announced a downturn in sales and the upcoming closure of its Kansas City, MO, factory.
Meanwhile, Polaris (parent company of Indian Motorcycles and Slingshots) is painting a rosier picture with its financial statement released this week. Overall sales revenue in 2017 was up from $4.516 billion to $5.428 billion. Motorcycle sales made up 11% of Polaris’ sales income, and they were up 7% for the year (excluding Victory).
Year over year, in terms of retail sales, Indian is up in the mid-teens, percentage-wise, while Slingshot numbers have nearly doubled. Polaris notes 900cc-plus motorbike sales are down in the high single-digits, but its motorcycles (including Slingshot) are up around 30%. Another bright spot is international motorcycle sales, which are up 14%.
Polaris’ motorcycle segment sales in Q4, including PG&A, totaled $103 million, a decrease of 2% compared to the fourth quarter of 2016, but 2016 included $25 million of Victory Motorcycle wholegood, accessory and apparel sales. Indian Motorcycles wholegood sales increased in the high-single-digit percent range in the fourth quarter, while Slingshot sales more than doubled.
When Q4 results are adjusted for the Victory Motorcycles wind-down costs of $3 million, motorcycle gross profit was $8 million, up from the fourth quarter last year due to higher sales volume for both Indian Motorcycles and Slingshot, as well as lower warranty costs.
For 2018, Polaris expects its motorcycle sales to be up in the high single-digits, percentage-wise, from $574 million.
“I am proud of the Polaris team and excited to see their dedication and hard work pay off as we returned the company to sustainable profitable growth in 2017,” commented Scott Wine, Chairman and Chief Executive Officer of Polaris Industries. “Indian Motorcycles massively outperformed the motorcycle industry, building on its existing momentum with a flood of product news and a very successful year on the race track.”
Regarding Victory in particular, which was axed in January 2017, Polaris says the closure “is expected to improve the long-term profitability of Polaris and its global motorcycle business, while materially improving the Company’s competitive position in the industry. The Company will record costs, anticipated to be in the range of $80 million to $90 million through 2018, associated with supporting Victory dealers in selling their remaining inventory, the disposal of factory inventory, tooling, and other physical assets, and the cancellation of various supplier arrangements.”
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