Polaris Industries (PII -1.62%) announced first-quarter 2019 results on Tuesday morning, including solid revenue growth and a smaller-than-expected profit decline as it works to mitigate the impact of tariffs and foreign currencies on its bottom line.

With shares of the motorcycle and off-road vehicle (ORV) specialist down slightly in response as of this writing, let's dig deeper to better understand how Polaris kicked off the new year.

Man sitting in a meadow on his maroon Indian Motorcycle


Polaris Industries results: The raw numbers

Metric Q1 2019 Q1 2018 Year-Over-Year Growth


$1.496 billion

$1.297 billion


GAAP net income (loss)

$48.4 million

$55.7 million


GAAP earnings per diluted share





What happened with Polaris this quarter?

  • On an adjusted (non-GAAP) basis, which excludes items like restructuring and acquisition expenses, Polaris' net income declined a more modest 9% to $66.9 million, or down 4% on a per-share basis to $1.08.
  • Polaris doesn't provide specific quarterly guidance. So, while we don't usually pay close attention to Wall Street's demands, consensus estimates called for lower adjusted earnings of $0.91 per share on slightly higher revenue of $1.50 billion.
  • Parts, garments, and accessories (PG&A) sales grew 8% year over year, driven by growth in both off-road vehicle and snowmobile PG&A revenue.
  • International sales (including PG&A) fell 4% to $203 million, as higher Indian Motorcycle sales were more than offset by a 7% headwind from foreign currency exchange.
  • Off-road vehicle (ORV) and snowmobiles segment sales grew 4% to $867 million, driven by strength in side-by-sides. Within that total:
    • ORV wholegood sales climbed 4%, driven by higher average selling prices (ASPs) as North American ORV retail sales declined in the mid-single-digit range.
    • Snowmobile wholegood sales fell 28% to $13 million, though snowmobile retail sales increased in the high single-digit range, and Polaris says it "gained significant market share for the season."
  • ORV gross profit dropped 20 basis points as higher ASPs and favorable mix were more than offset by the cost of tariffs.
  • Motorcycle sales went down 10% to $118 million, driven by lower Slingshot and Indian Motorcycle revenue given a "challenging motorcycle market."
  • Motorcycle segment gross profit tumbled by $10 million to $7 million, due to lower volumes and tariff costs.
  • Global adjacent market sales decreased 7% to $105 million.
  • Aftermarket segment sales rose slightly to $221 million, including a 2% dip from Transamerican Auto Parts to $197 million and 20% growth from Polaris' other aftermarket brands. 
  • Boats segment sales (from last year's acquisition of pontoon boat company Boat Holdings) were $185 million.

What management had to say

Polaris CEO Scott Wine said the company's results were "sound" and demonstrated "strong momentum" to start the year, adding that the ORV, motorcycles, and boats segments each endured weather-related weakness.

Wine elaborated:

Our product lineup has never been stronger, our Boat brands fared well during the recent boat shows, dealer inventory levels are well-positioned to support the peak spring retail selling season, and our strategic sourcing program is accelerating savings and value enhancement. We remain steadfastly committed to enhancing our customer-centric culture, which amplifies our investments in innovation and operational prowess, and as we look to the balance of 2019, we are confident about gaining market share as we continue bringing innovative products to our customers and solidifying our position as the leader in Powersports.

Looking forward

Polaris reiterated its full-year outlook for sales to increase 11% to 13%. But it also raised its guidance for adjusted net income per share to be $6.05 to $6.30, up a nickel per share from both ends of its previous target range. Polaris continues to expect a negative impact of $1.50 per share to earnings from the combined effects of tariffs, foreign currency exchange, and higher interest rates.

In the end, Polaris' headline numbers might not drop any jaws. But the company is performing admirably in the face of a bevy of headwinds outside its control.