Polaris Q4 Sales Plunge 23% As Low Shipment Volume Bites; Stock Slumps

Polaris Inc PII reported a fourth-quarter sales decline of 23% year-on-year to $1.75 billion, beating the analyst consensus estimate of $1.69 billion.

Total Company sales in the fourth quarter of 2024 were negatively impacted by lower volume due to planned reductions in shipments to manage dealer inventory in a subdued retail environment.

Sales from Off-Road segment plunged 25%, On Road segment dropped 21%, and Marine slumped 4%.

Adjusted EPS of $0.92 beat the analyst consensus estimate of $0.89.

Gross profit for the quarter decreased 24.9% Y/Y to $357.9 million, and the margin contracted by 44 basis points to 20.4%.

The operating expenses decreased 10.9% to $318 million. The operating income for the quarter crashed 53.8% to $65.8 million, with the operating margin contracting 249 basis points to 3.74%

The company held $287.8 million in cash and equivalents as of December 31, 2024. The company’s operating cash flow for the twelve months totaled $268.2 million.

Adjusted EBITDA margin for the quarter contracted nearly 70 basis points to 9.6%.

“Polaris has weathered storms before, and we believe we are positioning our organization to emerge from this downcycle even stronger,” said Polaris CEO Mike Speetzen.

“While I anticipate challenging headwinds will carry forward into 2025, we will remain focused on being a strong partner to our dealers, providing our riders with high quality products and working to deliver long-term value to shareholders.”

Outlook: Polaris sees FY25 sales to be down one to four percent versus 2024. The company expects adjusted EPS to be down 65%.

The company also expects margin headwinds from negative mix, planned reductions in production leading to negative absorption in addition to the restoration of employee profit-sharing program.

Price Action: PII shares are trading lower by 6.23% at $53.00 in premarket at the last check Tuesday.

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