Analyst: Polaris off-road selling season ‘somewhat slow’
Based on “further adverse changes in foreign currency, poor Q1 weather conditions, and what appears to be a somewhat slow start to the off-road selling season for the company,” BMO Capital Markets analyst Gerrick Johnson has moderated BMO’s Polaris sales and earnings estimates for the quarter, Johnson writes in a research note provided to Powersports Business.
In addition, Johnson adds that BMO thinks “increased competition and lower capital spending in agriculture and energy sectors could also adversely affect demand for Polaris off-road products.”
Johnson continues to rate Polaris stock as “Market Perform.”
Further, Johnson adds that Polaris Q1 off-road vehicle sales have likely been impacted by weather, leading BMO to lower its “outlook for North American ORV retail sales to +8% in the quarter, down from a prior estimate of +16%. Because of slower retail, we are also reducing our outlook for ORV and parts, garments, and accessories revenue in 1Q. We now estimate that ORV revenue to Polaris will grow in 1Q by +6%, down from a prior estimate of +15%.”
In addition, Johnson writes that “the bright spot in Polaris’s 1Q performance is its motorcycle division. … However, supply has been an issue for Polaris. The Scout, which began retailing in December, represented 40 percent of all Indian bikes registered in the U.S. in December and January, and dealers say they could sell more if they had more. We expect Polaris to work through supply constraints at its Iowa facility quickly.”
