Folks who have been bearish on consumer spending have been having a rough go of it here and there. While the RV market has been rather weak of late, that could have as much to do with demographic saturation as economic conditions -- especially when you see plenty of high-end merchandise flying out of Best Buy (NYSE:BBY), Coach (NYSE:COH), and Nordstrom (NYSE:JWN).

So the question then becomes this: Are the problems at Polaris (NYSE:PII) due to broader issues with consumer discretionary spending, problems specific to the ATV market, or company-specific issues relating to product quality and/or popularity?

Whatever the answer, this quarter was pretty unpleasant. Sales were down 7% and declines in gross profitability fed down to the operating income line where results were down 42% from last year. Likewise at the level of income from continuing operations -- results this quarter were less than two-thirds that of the year-ago period.

When roughly three-quarters of your revenue comes from a particular segment, that's where you generally want to look first. The ATV business is still spinning its wheels -- sales were down 8% this quarter. Making matters worse, dealer inventories are still too high, even though the company reduced shipments this quarter. Unfortunately, in the absence of information from Honda (NYSE:HMC) or Yamaha, it's not easy to say whether this is an industry problem or a Polaris problem.

It would be unfair to say that there's nothing good about this story. The Victory motorcycle business is growing and is likely to be the fastest-growing part of this business for the coming years -- particularly if the company exercises an option to buy a majority stake in Austria's KTM. Of course, this is a small sliver of the total business, and Harley-Davidson (NYSE:HDI) and Honda are still unquestionably the big fish in this pond.

Today's drop certainly makes the stock cheaper, but not nearly cheap enough to get me interested. Nevertheless, the company's high returns on capital can't just be dismissed out of hand, so value investors might want to check in on this story from time to time just in case it does slip within the vaunted "margin of safety" range.

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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).