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Jun 30, 2020
Polaris Q2 2020 Earnings Report
Polaris' second quarter results were released with reported sales down 15 percent and a net loss of $235 million, impacted by a $379 million pre-tax impairment charge in the Aftermarket business.
Key Takeaways
Polaris Inc. reported a decrease in sales by 15% to $1,512 million, and a net loss of $235 million, or $(3.82) per diluted share, for the second quarter of 2020. The results were impacted by a $379 million pre-tax, non-cash impairment charge related to the Aftermarket business. However, adjusted net income was $81 million, or $1.30 per diluted share, as retail demand benefited from new and existing customers seeking outdoor activities while social distancing.
Second quarter reported and adjusted sales decreased 15% to $1,512 million and $1,510 million, respectively
Second quarter reported net loss was $3.82 per share; adjusted net income for the same period was $1.30 per share
North American retail sales increased 57% for the quarter compared to last year with both ORV and Motorcycle retail sales up significantly
Dealer inventory levels decreased 47% given the strong retail sales growth and lower shipments resulting from the COVID-19 related temporary suspension of production during the quarter
Polaris
Polaris
Polaris Revenue by Segment
Polaris Revenue by Geographic Location
Revenue by Segment
Off-Road Revenue
CapyFin.comMotorcycles Revenue
CapyFin.comRevenue by Geographic Location
International Revenue
CapyFin.com Forward Guidance
The Company re-initiated its sales and adjusted earnings guidance for the full year 2020. Adjusted net income is expected to be in the range of $6.40 to $6.60 per diluted share for the full year 2020 compared to adjusted net income of $6.32 per diluted share for 2019. Sales are now expected to be in the range of $6.650 billion to $6.750 billion, flat to down two percent compared to 2019 adjusted sales of $6,783 million, due to the pandemic driven plant shut-down in the second quarter 2020.
Positive Outlook
- Adjusted net income is expected to be in the range of $6.40 to $6.60 per diluted share for the full year 2020 compared to adjusted net income of $6.32 per diluted share for 2019.
- Sales are now expected to be in the range of $6.650 billion to $6.750 billion.
- Ongoing strong consumer demand
- Historically low dealer inventory levels
- Well-positioned for the second half of the year
Challenges Ahead
- Pandemic driven plant shut-down in the second quarter 2020.
- The Company has not provided reconciliations of guidance for adjusted diluted net income per share, in reliance on the unreasonable efforts exception provided under Item 10(e)(1)(i)(B) of Regulation S-K.
- The Company is unable, without unreasonable efforts, to forecast certain items required to develop meaningful comparable GAAP financial measures.
- These items include restructuring and realignment costs and acquisition integration costs that are difficult to predict in advance in order to include in a GAAP estimate.
- Severity and duration of the COVID-19 pandemic and the resulting impact on the Company’s business and the global economy
Revenue & Expenses
Visualization of income flow from segment revenue to net income