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Nov. 12, 2007 – Improved UTV sales boost Polaris’ 3Q revenue

November 12, 2007
Filed under Features

Strong side-by-side sales coupled with a healthier inventory have Polaris Industries forecasting a better-than-expected year-end.
The Minnesota OEM reported a record third quarter in sales — $544 million — as its ATV sales grew by 15 percent over the same period a year ago. The $353 million in ATV sales includes the company’s UTV units, including the newly introduced RZR. The retail demand for that UTV plus the Ranger led in part to the increased quad sales, the company reported, noting it gained market share in the third quarter.
“Demand continues to outpace supply for our new Ranger RZR model, and the overall side-by-side market continues to expand,” Polaris CEO Tom Tiller said in a press release.
Tiller also noted the company’s dealer inventories are “much lower” than a year ago as a result of increased retail sales and the company’s reduction in ATV shipments.
Even with economic conditions that have “caused some concern,” Tiller reported Polaris is raising its expectations for the year-end, predicting sales will rise 5-6 percent vs. the past year.
“We expect fourth quarter 2007 sales growth in the range of 12-15 percent,” Tiller said.
Part of the confidence lies in its motorcycle segment as Polaris will ship more Victory Visions in the fourth quarter. The new touring models, the company reported, have received “very positive reviews by the motorcycle enthusiast magazines and from consumers that have ridden the bike during demonstration rides.”
Polaris did cut back Victory shipments in the third quarter, resulting in reduced sales vs. the same period last year. Victory sales of $21 million were 17 percent below last year. For the nine-month period, Victory is 2 percent below last year’s levels, which Polaris said remains better than the industry as a whole.
In other news from its third-quarter report, Polaris announced:

  • its PG&A sales increased 13 percent, thanks primarily to increased ATV and side-by-side accessory sales;
  • as expected, its financial service income dropped — by 28 percent — as HSBC discontinued financing non-Polaris products at Polaris dealerships;
  • snowmobile sales rose 5 percent due partly to the positive impact of currency movements and improved product mix.
  • the company’s operating expenses grew nearly 30 percent due partly to increased marketing and increased research and development costs. psb
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