Polaris

Market headwinds or not, are consumers responding well to Polaris' 2016 lineup? Image source: Polaris Industries.

Polaris Industries (NYSE:PII) is scheduled to release fourth-quarter 2015 earnings next Tuesday, but the market already expects the off-road vehicle specialist to remain stuck in the mud.

After all, Polaris stock crashed nearly 10% in a single day last month after the company preemptively reduced full-year 2015 revenue and earnings guidance. As it stands, it now anticipates 2015 revenue to increase just 4% to 5% over 2015, compared to previous guidance for 10% to 11% growth. That should translate to 1% to 2% growth in earnings per share over 2014, which is also well below Polaris' old guidance for EPS growth of 11% to 12%.

A bumpy road
To be fair, last quarter CEO Scott Wine did offer words of caution ahead of the 2016 calendar year, saying, "I'm not yet willing to predict the U.S. or global recession in the next 15 months, but there is ample evidence of an economic and market slowdown." As a result, Wine warned investors should expect "slightly slower growth in the powersports industry in general," especially from its core off-road vehicle and snowmobile segments.

Unfortunately as Polaris' latest quarter wore on and the economic slowdown reared its ugly head, Wine lamented last month that "consumer traffic and retail sales have slowed beyond previous expectations."

Polaris isn't alone
But that's not to say Polaris won't offer investors any valuable new information next week. So what else should investors be watching when Polaris' official fourth-quarter report hits the wires?

For one, keep in mind these should be industrywide challenges, so listen closely for management to confirm whether Polaris continues to lead its core markets. In particular -- and regardless of industry headwinds -- I'd like to know how consumers are responding to Polaris' model year 2016 off-road vehicle and motorcycle product lines, which it initially unveiled late last summer.

Accessorizing the future
We can also expect some additional detail surrounding Polaris' recent acquisition of 509, a privately held aftermarket snowmobile apparel and accessories specialist, and so named for the area code of its Spokane, Washington, headquarters. More specifically, 509 owns well-known aftermarket brands including Klim, Kolpin, and Pro-Armor, and will continue to operate as a distinct brand under its current management team.

But financial terms of the 509 transaction also weren't disclosed. Apart from helping diversify its offerings, then, I'm not holding my breath for the acquisition to have an enormous positive impact on Polaris' existing parts, garments and accessories segment, sales from which increased 3% year over year last quarter to just over $226 million. That said, I should hope management will clarify whether 509 will be accretive to earnings in 2016 and whether the purchase is expected to result in any significant one-time expenses.

Finally, if its fourth-quarter 2014 report last year is any indication, expect the company to give investors their first look at financial expectations for full-year 2016 -- that is, assuming management is brave enough to do so given the macroeconomic uncertainty it faces right now. For perspective, the bar isn't set terribly high; Wall Street's consensus estimates predict Polaris will grow revenue a modest 2.9% in 2016 to $4.83 billion, while earnings are expected to fare slightly better with growth of 4% to $7.00 per share.

Over the long term, however, these headwinds should prove temporary in nature. So arguably most important to Polaris' future is its ability to continue leading its core markets by consistently introducing innovative new products in the segments it serves. If Polaris indicates it is still succeeding on that front next week -- and regardless of whether the market's reaction reflects that success -- long-term investors should be able to buckle up and enjoy the ride.

Steve Symington has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Polaris Industries. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.