Polaris Industries Inc. Stock price
Compare with Peer Group
📊 Peer Group
📈 What is it?
The peer group consists of the companies with the most similar business model. They serve as a benchmark for putting a stock into context.
🧮 How is it selected?
Based on similarity of business model, meaning companies from the same industry with comparable products and a similar customer base. That's the only way to compare apples to apples.
🏛️ Why does it matter?
Whether a stock is cheap or expensive is best judged by comparison. A P/E of 18 or an EV/FCF of 20 can look cheap or expensive depending on the yardstick. The peer group gives you the most accurate one: companies with a similar business model that operate under the same conditions.
🎯 What does it mean for investors?
When a metric sits below the peer average, the stock is valued more cheaply relative to its competitors, and above the average more expensively. A discount to the peer group can be an opportunity, but it can also have a reason (for example lower growth). The comparison is a starting point, not a verdict.
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👉 More detailed insights
👉 Exclusive perspectives on opportunities & risks
👉 Clear answers to your questions
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👉 More detailed insights
👉 Exclusive perspectives on opportunities & risks
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Is Polaris Industries Inc. a Top Scorer Stock based on the Dividend, High-Growth-Investing or Leverman Strategy?
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Key metrics
📘 Market Capitalization
📈 What is it?
Market capitalization shows how much a company is currently worth on the stock market.
🧮 How is it calculated?
🏛️ Why is it important?
It helps classify companies by size (Large, Mid, Small Cap) and indicates their market presence and relative stability.
🧮 Calculation
🎯 What does this mean for investors?
- Large-cap companies tend to be more stable, often pay dividends, but may grow more slowly.
- Smaller firms may offer higher growth potential but come with more volatility.
- Market capitalization is a useful indicator of company size — but not a measure of whether a stock is undervalued or overvalued.
📘 Enterprise Value (EV)
📈 What is it?
Enterprise Value represents the total cost to acquire a company — including its debt and excluding its cash reserves.
🧮 How is it calculated?
(= Market Cap + Net Debt)
🏛️ Why is it important?
EV gives a more complete picture of a company's value than market cap alone and is used in key valuation ratios like EV/FCF or EV/Sales.
🧮 Calculation
🎯 What does this mean for investors?
- Enterprise Value shows the true cost of buying a company, including all financial obligations.
- It is more accurate than just looking at market cap, especially when comparing companies with different levels of debt or cash.
- Professional investors prefer EV-based multiples because they better reflect the company’s full financial footprint.
📘 Net Debt
📈 What is it?
Net Debt shows how much debt remains after subtracting a company’s available cash reserves.
🧮 How is it calculated?
🏛️ Why is it important?
It indicates how dependent a company is on borrowed money and how easily it can service its debt in the short term.
🧮 Calculation
🎯 What does this mean for investors?
- Low or negative net debt signals financial strength and flexibility.
- Companies with strong cash positions are better positioned in crises.
- High net debt increases financial risk — especially in environments with rising interest rates or economic downturns.
📘 Cash
📈 What is it?
Cash represents all liquid assets a company can access immediately — including cash, bank deposits, and short-term investments.
🧮 How is it calculated?
🏛️ Why is it important?
It reflects a company’s financial flexibility and resilience — enabling investments, buybacks, or buffer in downturns.
🧮 Calculation
🎯 What does this mean for investors?
- A strong cash position means greater room for maneuver and crisis resistance.
- Cash-rich companies can invest, pay down debt, or repurchase shares.
- But excess idle cash might indicate a lack of growth opportunities.
📘 Shares Outstanding
📈 What is it?
Shares outstanding represent the total number of a company’s shares currently held by investors — excluding treasury stock.
🧮 How is it calculated?
🏛️ Why is it important?
It’s the basis for key metrics like Earnings Per Share (EPS), Market Capitalization, or the Price/Earnings ratio (P/E).
🧮 Calculation
🎯 What does this mean for investors?
- Fewer shares in circulation typically increase earnings per share — making each share more valuable.
- Share buybacks reduce the number of shares and boost per-share metrics.
- Issuing new shares does the opposite — diluting shareholder value and lowering per-share figures.
📘 Price-to-Earnings Ratio (P/E)
📈 What is it?
The P/E ratio shows how many times a company's earnings per share are reflected in its current share price — in other words, how "expensive" the stock appears relative to its profits.
🧮 How is it calculated?
🏛️ Why is it important?
The P/E ratio is one of the most widely used valuation metrics. It helps investors assess whether a stock appears cheap or expensive compared to its earnings power.
🧮 Calculation
📊 P/E (TTM) = Based on earnings from the last 12 months (Trailing Twelve Months):🎯 What does this mean for investors?
- A low P/E may indicate undervaluation — or signal underlying issues.
- A high P/E may reflect strong growth expectations — or an overvalued stock.
📘 Price-to-Sales Ratio (P/S)
📈 What is it?
The P/S ratio shows how much investors are paying for $1 of the company’s revenue – regardless of profitability.
🧮 How is it calculated?
🏛️ Why is it important?
P/S is especially useful for evaluating growth companies or businesses not yet profitable. It reflects how the market values the company’s sales.
🧮 Calculation
Market Cap = $3.08b | Revenue (TTM) = $7.45b
Market Cap = $3.08b | Estimated Revenue = $7.50b
🎯 What does this mean for investors?
- A low P/S may indicate undervaluation — or low profitability.
- A high P/S can reflect strong growth expectations — or excessive optimism.
- Especially helpful when evaluating companies where profits are low, volatile, or negative.
📘 Enterprise Value to Sales (EV/Sales)
📈 What is it?
EV/Sales shows how much investors are paying for $1 of revenue — considering not just equity, but also debt and cash. It’s the capital structure–adjusted version of the P/S ratio.
🧮 How is it calculated?
🏛️ Why is it important?
It’s ideal for comparing companies with different levels of debt. It reflects a company's true cost relative to its revenue.
🧮 Calculation
Enterprise Value = $4.73b | Revenue (TTM) = $7.45b
Enterprise Value = $4.73b | Forward Revenue = $7.50b
🎯 What does this mean for investors?
- EV/Sales allows for capital structure–neutral company comparisons.
- A lower ratio may indicate undervaluation; a higher one may signal strong growth expectations or overvaluation.
- Especially helpful when evaluating high-growth companies with low or negative earnings.
📘 Enterprise Value to Free Cash Flow (EV/FCF)
📈 What is it?
EV/FCF shows how many years it would take for a company to "pay back" its enterprise value using its free cash flow.
🧮 How is it calculated?
🏛️ Why is it important?
It focuses on real cash generation, ignoring accounting noise — ideal for assessing profitability and value based on liquidity, not earnings.
🧮 Calculation
🎯 What does this mean for investors?
- A low EV/FCF may signal undervaluation and strong cash generation.
- A high EV/FCF might reflect weak recent cash flow or aggressive growth expectations.
- Best suited for stable, mature businesses with predictable free cash flows.
📘 Price-to-Book Ratio (P/B)
📈 What is it?
The P/B ratio compares a company’s market value to its book value — showing how much investors are paying for each dollar of net assets.
🧮 How is it calculated?
🏛️ Why is it important?
P/B is commonly used for asset-heavy industries like banks or industrials. It helps assess whether a stock is trading above or below its net asset value.
🧮 Calculation
🎯 What does this mean for investors?
- A P/B below 1 may signal undervaluation — or weak profitability.
- A P/B above 1 implies the market expects future value creation (e.g., brand, IP, growth).
- Best used for companies with tangible assets and strong balance sheets.
📘 Dividend per Share (DPS)
📈 What is it?
Dividend per Share shows how much cash a company pays out to shareholders for each share they own – usually on an annual or quarterly basis.
🧮 How is it calculated?
🏛️ Why is it important?
DPS is the absolute value of the payout per share – crucial for income-focused investors and dividend strategies.
🧮 Calculation
🎯 What does this mean for investors?
- A stable or growing DPS often signals a strong, shareholder-friendly business.
- DPS alone doesn’t tell you how attractive the payout is – the stock price also matters (→ see Dividend Yield).
- Long-term dividend growth is often a hallmark of high-quality companies – like the dividend aristocrats.
📘 Dividend Yield
📈 What is it?
Dividend yield shows how large a company’s dividend is in relation to its current share price.
🧮 How is it calculated?
🏛️ Why is it important?
It allows investors to compare dividend payouts across stocks, regardless of price or payout size.
🧮 Calculation
🎯 What does this mean for investors?
- A stable yield can reflect reliable distributions.
- Comparing 1Y and 5Y yield shows whether dividend growth keeps pace with stock price appreciation.
- A low yield isn’t always negative – it can signal strong past performance or growth focus.
📘 Dividend Growth
📈 What is it?
Dividend growth shows how much a company has increased its dividend per share over time.
🧮 How is it calculated?
5Y: Compound Annual Growth Rate (CAGR)
🏛️ Why is it important?
Consistently rising dividends are often a sign of financial strength and shareholder orientation – especially relevant for long-term investors.
🧮 Calculation
🎯 What does this mean for investors?
- Stable dividend growth is a sign of sustainable earning power.
- High dividend growth can significantly boost your total return:
- If a company pays $1 in dividends and increases it by 15% annually over 5 years, you’ll receive $2 per share in year 5 – twice as much as at the start!
📘 Payout Ratio
📈 What is it?
The payout ratio shows what percentage of a company’s earnings (per share) is distributed to shareholders as dividends.
🧮 How is it calculated?
🏛️ Why is it important?
It helps assess whether the dividend is sustainable – especially in relation to the company’s profitability.
🧮 Calculation
🎯 What does this mean for investors?
- A low payout ratio means the company retains more earnings for reinvestment – typical for growth companies.
- A moderate payout (e.g. 25–50%) indicates a healthy balance between returns and reinvestment.
- High payout ratios may seem attractive but can carry risk if earnings decline.
📘 Consecutive Dividend Increases
📈 What is it?
This metric shows how many consecutive years a company has raised its dividend per share – without any cuts or pauses.
🧮 How is it calculated?
(Special dividends are not considered.)
🏛️ Why is it important?
A long track record of increases reflects financial strength, consistency, and shareholder commitment.
🎯 What does this mean for investors?
- A long dividend increase streak builds confidence – especially in volatile markets.
- Such companies are seen as reliable and income-friendly investments.
- The longer the streak, the stronger the company’s dividend discipline.
📘 Revenue
📈 What is it?
Revenue shows how much a company earns in total from selling its products and services – the gross income before any costs are deducted.
🧮 How is it calculated?
🏛️ Why is it important?
Revenue is one of the key figures to assess a company’s size, market position, and growth potential.
🧮 Calculation
🎯 What does this mean for investors?
- Growing revenue indicates rising demand and can be an early signal of future earnings growth.
- Comparing actual and expected revenue reveals trends in the market environment and analyst sentiment.
- Note: Strong revenue alone isn’t enough – margins and profitability matter just as much.
📘 EBITDA
📈 What is it?
EBITDA stands for “Earnings Before Interest, Taxes, Depreciation, and Amortization.” It reflects a company’s operating profit before the effects of financing, taxes, and accounting depreciation.
🧮 How is it calculated?
🏛️ Why is it important?
EBITDA is widely used to evaluate a company’s operating performance – especially across capital-intensive sectors or international comparisons.
🧮 Calculation
🎯 What does this mean for investors?
- A high or growing EBITDA indicates strong operational profitability – independent of taxes, interest, or accounting methods.
- It’s especially useful for comparing companies across sectors or geographies.
- Important: EBITDA is not a net income figure – it excludes key costs like depreciation and interest.
📘 EBIT
📈 What is it?
EBIT stands for “Earnings Before Interest and Taxes.” It reflects a company’s operating profit after depreciation, but before interest and tax expenses.
🧮 How is it calculated?
🏛️ Why is it important?
EBIT is a core profitability metric that shows how well the company performs in its main business operations – independent of capital structure and tax environment.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBIT indicates strong profitability from the company’s core business – before financial and tax effects.
- It allows better comparison between companies with different debt levels or tax structures.
- Compared to EBITDA, EBIT already accounts for depreciation and reflects capital intensity more clearly.
📘 Net Income
📈 What is it?
Net income is the company’s total profit – the amount left after all expenses, taxes, interest, and depreciation have been deducted.
🧮 How is it calculated?
🏛️ Why is it important?
Net income is the most comprehensive measure of a company’s profitability – showing how much actual profit remains after all business and financing costs.
🧮 Calculation
🎯 What does this mean for investors?
- Growing net income indicates that the company is managing all of its costs efficiently.
- It directly influences valuation metrics like P/E ratio and the company’s dividend capacity.
- Over time, net income trends reveal how resilient and profitable the business model really is.
📘 Free Cash Flow (FCF)
📈 What is it?
Free Cash Flow shows how much actual cash remains after a company covers its operating expenses and capital expenditures.
🧮 How is it calculated?
🏛️ Why is it important?
FCF reflects a company’s real financial strength – regardless of accounting profits. It shows how much flexibility a company has for dividends, share buybacks, or debt reduction.
🧮 Calculation
🎯 What does this mean for investors?
- High free cash flow means the company generates real, usable cash – independent of reported net income.
- It’s often the most reliable base for sustainable dividends and buybacks.
- Declining FCF can be an early warning sign – even when profits appear stable.
📘 Revenue Growth
📈 What is it?
Revenue growth shows how much a company’s sales have changed compared to the previous year – both on a trailing basis (TTM) and based on forward projections.
🧮 How is it calculated?
Forward = (Expected revenue ÷ Revenue in prior year − 1) × 100
Forward growth is based on analyst estimates for the current fiscal year.
🏛️ Why is it important?
Rising revenue signals growing demand, business expansion, and market share gains – especially important for growth-oriented companies.
🧮 Calculation
🎯 What does this mean for investors?
- Growth is the engine of long-term value creation – especially in tech and growth sectors.
- What matters is not just current growth, but its sustainability.
- Forward projections reflect whether analysts expect continued momentum – or a slowdown.
📘 EBITDA Growth
📈 What is it?
EBITDA growth shows how much a company’s operating profit (before interest, taxes, depreciation, and amortization) has increased or decreased compared to the previous year.
🧮 How is it calculated?
Forward = (Expected EBITDA ÷ EBITDA from prior year − 1) × 100
The forward estimate is based on analyst projections for the current fiscal year.
🏛️ Why is it important?
Growing EBITDA indicates improving operational profitability – regardless of financing or accounting effects.
🧮 Calculation
🎯 What does this mean for investors?
- Strong EBITDA growth signals operational efficiency and scalability – especially during growth phases.
- EBITDA growth can be an early indicator of margin and earnings expansion – but should be assessed alongside revenue and EBIT.
📘 EBIT Growth
📈 What is it?
EBIT growth shows how much a company’s operating profit (after depreciation, but before interest and taxes) has increased compared to the previous year.
🧮 How is it calculated?
Forward = (Expected EBIT ÷ EBIT from prior year − 1) × 100
The forward estimate is based on analyst projections for the current fiscal year.
🏛️ Why is it important?
EBIT growth is a direct indicator of a company’s business performance – taking into account capital intensity through depreciation.
🧮 Calculation
🎯 What does this mean for investors?
- Rising EBIT signals improving operating profitability – even after accounting for depreciation.
- It’s especially important for evaluating companies with significant capital expenditures.
- Combined with revenue and EBITDA growth, EBIT growth provides a well-rounded view of operational progress.
📘 Net Income Growth
📈 What is it?
Net income growth shows how much a company’s bottom-line profit has increased or decreased compared to the previous year – both on a trailing basis (TTM) and based on analyst projections.
🧮 How is it calculated?
Forward = (Expected net income ÷ Net income from prior year − 1) × 100
The forward estimate reflects analysts’ expectations for the current fiscal year.
🏛️ Why is it important?
Net income is the ultimate measure of profitability. Growing net income signals stronger efficiency, cost control, and sustainable earnings power.
🧮 Calculation
🎯 What does this mean for investors?
- Stronger net income boosts valuation, dividend potential, and investor confidence.
- If profits stall while revenue grows, it may signal margin pressure.
📘 Free Cash Flow Growth
📈 What is it?
Free cash flow (FCF) growth shows how a company’s available cash – after covering operating expenses and capital expenditures – has changed compared to the previous year.
🧮 How is it calculated?
🏛️ Why is it important?
Free cash flow reflects real financial strength. Growing FCF indicates more flexibility for dividends, share buybacks, and reinvestment.
🧮 Calculation
🎯 What does this mean for investors?
- Declining FCF may point to rising investments, increasing costs, or weaker operating performance.
- Especially for dividend investors, FCF growth is critical – since dividends are paid from actual available cash.
- A negative trend isn't always bad, but it deserves closer attention.
📘 Gross Margin
📈 What is it?
Gross margin shows how much of a company’s revenue remains after deducting the direct costs of goods sold (like materials and production). It represents the company’s “raw profit” before fixed costs, taxes, and interest.
🧮 How is it calculated?
Or simply: Gross Margin = Gross Profit ÷ Revenue × 100
🏛️ Why is it important?
Gross margin indicates how efficiently a company can produce or procure what it sells. It is a key measure of product-level profitability and pricing power.
🧮 Calculation
🎯 What does this mean for investors?
- A high gross margin suggests strong pricing power and efficient production.
- Falling margins may signal rising input costs or competitive pressure.
- Compared to peers, gross margin offers insights into the quality of a business model.
📘 EBITDA Margin
📈 What is it?
The EBITDA margin shows how much of a company’s revenue remains as operating profit before interest, taxes, depreciation, and amortization.It reflects operating efficiency without being distorted by financing or accounting factors.
🧮 How is it calculated?
🏛️ Why is it important?
The EBITDA margin reveals how much operating income a company generates per dollar of revenue – independent of capital structure and tax effects.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBITDA margin reflects strong core profitability – before accounting distortions.
- It allows for effective comparisons across companies and sectors.
- A stable or growing margin signals efficient cost control and business scalability.
📘 EBIT Margin
📈 What is it?
The EBIT margin shows what percentage of revenue remains as operating profit after depreciation but before interest and taxes.
🧮 How is it calculated?
🏛️ Why is it important?
The EBIT margin reflects a company’s core profitability while accounting for capital intensity (e.g. machinery, infrastructure). It’s especially useful for comparing businesses with different levels of depreciation.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBIT margin shows that the company remains efficient even after factoring in depreciation.
- It’s especially relevant for capital-intensive industries.
- Stable or rising EBIT margins over time are a strong indicator of pricing power and business quality.
📘 Net margin
📈 What is it?
Net margin shows how much of a company’s revenue remains as bottom-line profit after deducting all costs, interest, taxes, and depreciation.
🧮 How is it calculated?
🏛️ Why is it important?
Net margin reflects a company’s overall efficiency – across operations, financing, and taxation. It shows how much actual profit is generated from each dollar of revenue.
🧮 Calculation
🎯 What does this mean for investors?
- A high net margin means the company is not only strong operationally but also manages financing and taxes efficiently.
- Peer comparisons reveal business quality and competitiveness.
- Declining margins despite revenue growth can be a red flag for rising costs or inefficiencies.
📘 Free cash flow margin
📈 What is it?
The free cash flow (FCF) margin shows how much of a company’s revenue remains as actual free cash after covering all operating expenses and capital expenditures.
🧮 How is it calculated?
🏛️ Why is it important?
This margin reflects the true liquidity generated by the business – independent of accounting rules or depreciation. It’s especially relevant for dividends, buybacks, and reinvestment decisions.
🧮 Calculation
🎯 What does this mean for investors?
- A high FCF margin means a company consistently generates strong cash flow.
- It’s a positive signal for financial stability and shareholder returns.
- The long-term trend is key – a declining margin may indicate rising investments or weakening operating efficiency.
📘 Equity Ratio
📈 What is it?
The equity ratio indicates what portion of a company’s total assets is financed by shareholders’ equity – in other words, how much it relies on its own capital.
🧮 How is it calculated?
🏛️ Why is it important?
A high equity ratio reflects financial strength and stability, especially during downturns. It’s a key indicator of a company’s solvency and long-term risk profile.
🧮 Calculation
🎯 What does this mean for investors?
- Companies with high equity ratios are generally more resilient and less dependent on external debt.
- Low equity ratios can signal higher risk or aggressive financial strategies.
- Important: Always assess the equity ratio in combination with the return on equity (ROE). This shows not just how stable the company is – but also how efficiently it uses shareholder capital.
📘 Return on Equity (ROE)
📈 What is it?
Return on equity (ROE) shows how efficiently a company uses its shareholders’ equity to generate profit. In other words: how much net income is earned per dollar of equity.
🧮 How is it calculated?
🏛️ Why is it important?
ROE is a core profitability metric. It helps investors understand whether a company delivers attractive returns on the capital provided by its shareholders.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROE indicates that the company is using its capital efficiently and profitably.
- It’s especially meaningful for capital-intensive businesses or firms with high equity bases.
- Important: A very high ROE can also result from high debt levels – always interpret it alongside the equity ratio to assess financial health.
📘 Return on Capital Employed (ROCE)
📈 What is it?
ROCE measures how efficiently a company generates profits from its total capital – including both equity and interest-bearing debt.
🧮 How is it calculated?
It evaluates the return on all capital employed, regardless of how it’s financed.
🏛️ Why is it important?
ROCE is ideal for comparing companies with different financing structures. It shows how well management uses capital to create value for both shareholders and creditors.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROCE means the company uses its capital efficiently – regardless of whether it's funded by debt or equity.
- The higher the ROCE compared to peers, the more value the company creates with its invested capital.
- Especially relevant for capital-intensive sectors like industrials, energy, or infrastructure.
📘 Return on Invested Capital (ROIC)
📈 What is it?
ROIC measures how efficiently a company generates returns from the capital invested in its core operations – regardless of whether the capital comes from equity or debt.
🧮 How is it calculated?
- NOPAT = Net Operating Profit After Taxes
- Invested Capital = Operating assets minus non-interest-bearing liabilities
🏛️ Why is it important?
ROIC is one of the most accurate indicators of capital efficiency. Unlike return on equity, it is not distorted by leverage and shows how much value is created for all capital providers.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROIC shows how effectively a company uses the capital that is truly invested in its core operations.
- Unlike ROCE, ROIC focuses only on the capital that is actively used to run the business – and that requires a return (i.e. interest-bearing).
- Especially useful when comparing companies with large amounts of excess cash or non-interest-bearing liabilities – giving a more realistic picture of capital efficiency.
📘 Leverage Ratio (Debt-to-Equity)
📈 What is it?
The leverage ratio indicates how much a company relies on interest-bearing debt (such as loans and bonds) relative to its shareholders’ equity.
🧮 How is it calculated?
🏛️ Why is it important?
This ratio helps assess a company’s financial structure and risk profile. High leverage can enhance returns – but also increases exposure to interest rate changes and financial stress.
🧮 Calculation
🎯 What does this mean for investors?
- A low leverage ratio signals financial strength and independence.
- A higher ratio can improve returns in good times but increases risk during downturns or rising interest rate periods.
- 👉 Always interpret in the context of industry, capital intensity, and interest rate environment.
📘 Earnings per share (EPS)
📈 What is it?
Earnings per Share (EPS) shows how much profit is attributable to a single share – and is one of the most important metrics for evaluating a company's performance.
🧮 How is it calculated?
The diluted share count reflects potential new shares that could be issued through options, convertible bonds, or other rights.
🏛️ Why is it important?
EPS is the basis for many key valuation metrics like P/E ratio, PEG ratio, or payout ratio. It enables comparisons of profitability across companies, regardless of their size.
🧮 Calculation
🎯 What does this mean for investors?
- EPS captures per-share profitability and is especially useful for comparisons over time or with analyst estimates.
- Rising EPS may signal consistent growth or share buybacks.
- Important: Always use diluted EPS for more realistic valuations – especially in companies with stock-based compensation.
📘 Free cash flow per share (FCF per share)
📈 What is it?
Free Cash Flow per Share shows how much free cash flow a company generates per outstanding share – after investments, but before dividends or debt repayments.
🧮 How is it calculated?
Free cash flow is calculated as operating cash flow minus capital expenditures (CapEx).
🏛️ Why is it important?
FCF per Share reveals how much real cash is available per share – useful for dividends, buybacks, or reducing debt. Unlike net income, free cash flow is harder to manipulate and often seen as a more reliable metric.
🧮 Calculation
🎯 What does this mean for investors?
- High FCF per share signals strong financial flexibility.
- It shows how much capital the company can effectively reinvest or return to shareholders.
- Particularly relevant for dividend payers and capital-efficient businesses.
📘 Short interest
📈 What is it?
Short interest indicates how many shares of a company are currently sold short – that is, borrowed and sold by investors who expect the price to decline.
🧮 How is it calculated?
It reflects the percentage of a company’s shares that are being shorted relative to the total shares available.
🏛️ Why is it important?
Short interest serves as a sentiment indicator: A high value may signal skepticism or bearish expectations – but also increases the potential for a short squeeze if prices rise unexpectedly.
🧮 Calculation
🎯 What does this mean for investors?
- Low short interest usually indicates market confidence in the company.
- High short interest can be a warning sign – or an opportunity if sentiment shifts.
- Especially relevant in volatile markets or ahead of key earnings releases.
📘 Employees
📈 What is it?
The employee count shows how many people a company employs worldwide – offering insights into its size, structure, and business model.
🧮 How is it calculated?
🏛️ Why is it important?
It helps assess operational scale, labor intensity, and cost structure. Combined with revenue and profit, it enables key metrics like revenue per employee or productivity.
🧮 Calculation
🎯 What does this mean for investors?
- A high headcount can signal operational complexity – but also significant growth capacity.
- Revenue per employee is a key indicator of efficiency.
- Especially useful for comparing tech, industrial, or service-heavy companies.
📘 Turnover per employee
📈 What is it?
Revenue per employee indicates how much revenue a company generates on average per employee – a key measure of efficiency and productivity.
🧮 How is it calculated?
The employee count is typically taken from the most recent annual report.
🏛️ Why is it important?
This metric helps compare business models – especially between labor-intensive and technology-driven companies. A high value suggests automation, operational efficiency, or strong value creation per head.
🧮 Calculation
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Polaris Industries Inc. Stock Analysis
Analyst Opinions
22 Analysts have issued a Polaris Industries Inc. forecast:
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Polaris Industries Inc. Events
Past Events
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JUL
28
Q2 2026 Earnings Call
about 2 months ago
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APR
28
Q1 2026 Earnings Call
5 months ago
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JAN
27
Q4 2025 Earnings Call
8 months ago
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OCT
28
Q3 2025 Earnings Call
11 months ago
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Polaris Industries Inc. — Q2 2026 Earnings Call
1. Management Discussion
Good day, and welcome to the Polaris Quarter 2 2026 Earnings Call and Webcast. [Operator Instructions] Please note, this event is being recorded.
I would now like to turn the conference over to J.C. Weigelt, Vice President of Investor Relations. Please go ahead.
Thank you, Bailey, and good morning or afternoon, everyone. I'm J.C. Weigelt, Vice President of Investor Relations. Thank you for joining us for our 2026 second quarter earnings call. We will reference a slide presentation today, which is accessible on our website at ir.polaris.com.
Joining me on the call today are Mike Speetzen, our Chief Executive Officer; and Bob Mack, our Chief Financial Officer. Both have prepared remarks summarizing our 2026 second quarter results as well as our expectations for the remainder of 2026, then we'll take your questions.
During the call, we will be discussing various topics, which should be considered forward-looking for the purpose of the Private Securities Litigation Reform Act of 1995. Actual results could differ materially from those projections in the forward-looking statements. You can refer to our 2025 10-K and our other filings with the SEC for additional details regarding risks and uncertainties.
All references to 2026 second quarter actual results and future period guidance are for our continuing operations and are reported on an adjusted non-GAAP basis unless otherwise noted. Please refer to our Reg G reconciliation schedules at the end of the presentation and at the end of our earnings deck for the GAAP to non-GAAP adjustments.
Now I will turn the call over to Mike Speetzen. Go ahead, Mike.
Thanks, J.C. Good morning, everyone, and thank you for joining us.
Strong second quarter results reflect the momentum building across our business. We exceeded expectations across all key metrics, gained share in our ORV business for the fifth consecutive quarter and continued proving that the strategic actions taken over the last several years are making Polaris a stronger, more focused and more profitable company.
Second quarter reported sales increased 9%. Excluding Indian Motorcycle, sales grew 17% Sales were driven by double-digit growth in our Powersports segment, led by ORV with our utility RANGER line and our fast-growing commercial business, where growth is driven by investments in infrastructure and data center projects.
We also saw strong contributions from marine, which grew 16% in the quarter. Across our portfolio, North American retail increased 4% with ORV up 5%. Both measures exclude used vehicles. We finished the quarter with solid share gains in ORV, reinforcing our belief that our combination of innovative products and strong dealer relationships continue to differentiate Polaris in the marketplace.
From a profitability standpoint, our results include a $74 million benefit related to IEEPA refund claims. We have removed these refunds from some of our adjusted financial metrics today to provide the underlying operational performance of our business in the quarter. We refer to these as our operational adjusted results, which exclude the $74 million in tariff refunds but include ongoing tariff expense.
Operational margins expanded at both the gross profit and EBITDA levels even with -- after excluding the tariff refunds. Higher shipments, favorable mix and positive net pricing more than offset higher commodity costs and the $32 million of ongoing tariff headwind we experienced during the quarter. Importantly, we continue to realize improved operating leverage from the portfolio optimization and manufacturing efficiency work we've executed over the past several years.
We delivered adjusted earnings per share of $1.97, which included the pretax $74 million in tariff refunds. Excluding these tariff refunds, operational adjusted EPS was $1.01, well above our target range of $0.70 to $0.80. We also saw operational gross profit margin expand by 82 basis points, excluding the tariff refunds and against a second quarter 2025 margin that had little ongoing tariff impact.
These results reflect the strength of our execution, the competitiveness of our product portfolio and the discipline we've maintained across the organization. As a result of our performance and with the strong momentum we've built through the first half of the year, coupled with tariff refunds, we are raising our full year 2026 guidance.
While there remains uncertainty, we believe Polaris is operating from a position of strength, controlling what we can while navigating a dynamic environment. We have a clear strategy, the best team in powersports and a portfolio that continues to resonate with customers around the world.
We're continuing to build positive momentum. We're gaining share in our core segment through focused innovation, dealer relationships are strong and dealer inventory remains healthy, and we're beginning to see meaningful benefits from the work we've done to refine our portfolio, simplify our organization and strengthen our operational execution. Our team is aligned around a common strategy and a goal of strengthening and extending Polaris' leadership position within the powersports industry.
Moving on to our retail performance. ORV North American retail was up 5%, outperforming the industry and gaining share for the fifth consecutive quarter. Trends within ORV remain consistent with recent quarters. And despite a cautious consumer environment, we're continuing to take share through the strength and breadth of our portfolio and category-defining vehicles.
Our utility products make up over 70% of our Powersports segment and remain a clear source of momentum in this environment with retail up more than 10% and RANGER continuing to outperform the market. We believe that performance reflects both the strength of our product lineup and the value customers see in the Polaris brand.
One highlight of the quarter is that the recent industry data shows the RANGER 500 was the fastest-growing off-road vehicle in the industry. In addition, our recently launched RANGER cab units, the RANGER 1000 and the RANGER XP 1000, drove multiple points of market share gains in the utility side-by-side market, which is the largest subsector of the ORV market.
Not only that, the second quarter marked our highest share in the subsector since 2021. We continue to believe there is a long-term trend in the industry with retail demand shifting to cab units given their capability, refinement and features. The second quarter marked the first time when over half of our ORV retail was in cab units. That's proof we deliver innovation customers want and that we are winning in the largest and most important part of the market.
On the recreational ORV side of the business, we continue to see a cautious consumer due to macroeconomic factors such as inflation, higher borrowing costs and negative headlines. These negative factors have been consistent over a couple of years, and our retail outlook for the recreational ORV industry remains pressured.
Turning to marine. Our second quarter pontoon retail was down high single digits according to the May SSI data. Through May, the data reflects the pontoon industry is down approximately 9%. Our pontoon brands continue to perform well at the premium end with the Bennington QX and Godfrey Sanpan. Here, consumers are not as sensitive to macro trends and interest rates, while retail at the mid- and lower-tier pontoons continue to be soft, given a more interest rate-sensitive customer.
I think it's worth repeating what I said last quarter. What truly differentiates Polaris is the strength of our entire portfolio at the dealership. We are the global leader in powersports, and we operate like it. Look for us to strengthen this leadership position with new product launches at our upcoming dealer events in August of this year and in early 2027.
We continue to see healthy dealer inventory levels across our portfolio. During the second quarter, we strategically increased inventory in utility, given the robust growth we are experiencing in this category. At the same time, we have rightsized inventory positions in areas of the business such as ORV recreation, seasonal and marine, given weaker demand.
In aggregate, dealer inventory was down 8% in the quarter versus last year, and dealers' DSOs are slightly over 100 days, which remains well below historic levels. We remain committed to matching shipments to retail and through the first half of this year, we have successfully executed this strategy.
Improving our mix at the dealership remains a real opportunity for us, and it's an area we continue to invest in and measure progress against. Rather than a one-size-fits-all approach, we are tailoring our actions with each dealer to ensure a healthier channel and putting our dealers in the best position for success such that every dealer carries the right mix and the right number of units for their market.
We have already seen positive results with an 18% improvement in sales velocity in the first half of the year, helping our dealers navigate a choppy market. A program like this is a win-win for our dealers and Polaris and reflects our relentless focus on dealer health and stronger operational management.
I'm now going to turn it over to Bob to provide you with more details of the financials and the increase to our full year guidance. Bob?
Thanks, Mike. We delivered another strong quarter with sales and earnings both above the high end of our expectations. Sales were up 9% or up 17% organically when excluding Indian Motorcycle.
All 3 of our segments posted top line growth in the quarter, led by our core Powersports segment, where both ORV and commercial lines grew double digits. Marine continues to see a benefit from favorable mix, while PG&A achieved double-digit growth led by higher parts sales in powersports. Aixam & Goupil also grew 6% over the prior year.
The underlying performance of the business was well ahead of our expectations. Our reported results and guidance include the tariff refund claims made in the quarter that Mike spoke about. To help evaluate the underlying performance of the business, we are also providing operational margin and EPS metrics that exclude the tariff refunds.
The $74 million of tariff refunds booked in the quarter contributed $0.96 to adjusted EPS. Excluding that benefit, operational adjusted EPS was $1.01, well ahead of the $0.70 to $0.80 range we discussed heading into the quarter.
Adjusted EBITDA margin from operations, which excludes the tariff refunds, also improved meaningfully by approximately 180 basis points compared to last year, primarily due to higher volumes, positive net price and favorable mix. These positive factors were partially offset by incremental tariffs, higher commodity costs and a modest increase in operating expenses.
Adjusting EBITDA for the separation of Indian Motorcycle, tariffs and commodities, our second quarter EBITDA incrementals would have been over 32%. This rate demonstrates that our strategy to optimize our plants and organization while pruning nonprofitable businesses is having its intended outcome of increasing the profitability profile of Polaris.
Turning to our segments. Polaris Powersports sales were up 17% year-over-year. RANGER and commercial shipments were significantly above last year's levels, supported by continued strength in utility demand across a range of categories. Commercial remains a clear bright spot, delivering solid revenue growth in the quarter, driven by strong infrastructure-related demand, particularly from data center construction projects.
We believe Polaris is well positioned to capitalize on this opportunity through its dedicated commercial dealer network, focused commercial sales approach and Pro XD lineup purpose-built for demanding worksite environments. Given the level of infrastructure investment we are seeing, we believe there is a continuing runway to expand our commercial business at above current powersports industry growth rates.
Powersports PG&A sales were up 21%, driven by factory-installed accessories and parts sales. Commercial PG&A revenues were up significantly, bolstered by strategic investments we made to help maximize the uptime for our commercial customers.
Gross profit margin from operations improved 77 basis points, driven by higher net price as promotional activity remained below last year's levels and positive product mix. Adjusted gross profit margin increased 458 basis points, reflecting much of the tariff refunds being recorded in Polaris Powersports. Importantly, these improvements were achieved despite an approximate 100 basis points of commodity cost headwind.
Marine sales were up 16%, driven by higher shipments and a richer mix of pontoons led by the Bennington QX and Godfrey Sanpan, the premium lines within each brand. We also saw a modest benefit from net price. Gross profit margin improved 21 basis points year-over-year, again, reflecting favorable mix, which we expect to continue through the selling season, along with higher net price. Higher commodity costs, particularly aluminum, continue to pressure margins, and we expect that dynamic to continue until aluminum pricing retreats from current levels.
Aixam & Goupil sales were up 6% as higher Goupil sales more than offset lower shipments within Aixam. Aixam retail was up double digits, which improved dealer inventory in that business. Gross profit margin improved 242 basis points, driven by lower warranty expense and favorable leverage of fixed costs from increased sales volumes.
Our capital deployment priorities remain unchanged. First, investing in higher-margin profitable growth; second, returning capital to shareholders through our dividend; and third, paying down debt. With strong operational performance in the second quarter, combined with the $74 million of tariff refunds, our net leverage ratio improved to 2.6x from 3.6x at the end of the first quarter, moving back below 3 turns and well within our covenant requirements. We expect net leverage to continue to decrease in the second half of the year.
We remain very confident in our financial position and our approach to capital deployment is disciplined. We expect strong cash flow conversion in the second half as seasonal working capital builds unwind, and we plan to continue to strengthen the balance sheet flexibility while managing the business in line with investment-grade metrics.
Moving to guidance. We are raising our full year outlook for the second time this year, reflecting both the strong operational performance in the first half of the year and the $74 million of tariff refunds.
We now expect sales of $7.3 billion to $7.5 billion, up 2% to 5% compared with our prior guidance of flat to up 2%. Adjusting for the sale of Indian Motorcycle, organic sales are expected to be up approximately 10%. We expect a flattish retail environment in the second half of the year with a viewpoint that it could be up low single digits if demand holds in the back half. We are prepared to build and ship to those higher levels, but we'll continue to align with retail to ensure dealer inventory remains healthy.
We are also increasing our margin outlook. We now expect adjusted EBITDA margin to increase 250 to 275 basis points. Operationally, we expect adjusted EBITDA margin to increase 145 to 170 basis points compared with our prior guidance of 100 to 140 basis points. Removing the impact from the separation of Indian motorcycles, tariffs and commodities, this would translate into EBITDA incrementals of nearly 40% at the high end of our guidance.
The increase reflects the strength of our year-to-date operational performance even as we continue to manage higher commodity costs, specifically diesel, steel and aluminum. We now expect a $70 million headwind from those increased commodity costs.
The work we have done around Lean is supporting our operating model and allowing us to drive improved throughput without adding unnecessary cost into our plants. That is creating better operating leverage and underpinning the increase in our margin guidance.
On tariffs, we expect to pay approximately $215 million this year, unchanged from our prior outlook. That assumes no material change to USMCA or other tariff policies currently in place. We continue to execute against our tariff mitigation strategy with the goal of reducing our exposure to China and bringing China-sourced material cost of goods sold to below 5% by the end of 2027 from 18% in 2024. We are ahead of our internal goals today and are making progress identifying alternative suppliers in the United States and Mexico, which helps localize our supply chain.
The Indian Motorcycle separation remains on track to be accretive by approximately $50 million to adjusted EBITDA with the benefit weighted more toward the back half of the year, January 2027, due to the seasonality of motorcycle sales.
We also raised our adjusted EPS guidance. We now expect 2026 adjusted EPS of $3 to $3.10. Operationally, that translates to $2.05 to $2.15 compared with our March 3 guidance revision of $1.60 to $1.70.
While we expect the ability to recover additional tariff refunds, those are not included in our guidance today because there is not currently a formal process to apply for the next phase of expected refunds and certain amounts must be recovered from suppliers. We estimate the total potential future refund opportunity to be approximately $40 million.
For the [ third ] quarter, we expect sales to increase 4% to 5% compared to last year, with growth driven primarily by commercial, government and defense and marine. We are also factoring in higher commodity and logistics costs, with offsets from net price improvements. We expect adjusted EPS in the second half of the year to be close to $1 and the quarterly earnings forecast to be evenly weighted between the third and fourth quarters, but may shift based on timing of shipments as we enter seasonality of fall and winter products.
Stepping back, we are beginning to see the benefits of the actions we have taken to strengthen our competitive position at dealerships and improve efficiency across our plants. Our decision to raise guidance reflects the benefit from tariff refunds, but it is equally a function of strong year-to-date performance, improved operational execution and increased confidence in the earnings power of the business.
We have momentum across the segments at our dealers, in our plants, and throughout our teams. There is work ahead, but we are executing from a stronger financial position, and I am confident in our ability to keep building on this progress.
With that, I'll turn the call back over to Mike. Go ahead, Mike.
Thanks, Bob. In the second half of the year, our priorities remain consistent. We forecast a flattish retail environment for the second half of 2026 with growth in the utility category, while recreational offerings are expected to remain soft.
We're excited about the second half of the year, given the innovative product launches being announced in August, and we expect those products to have a greater impact in the fourth quarter as they arrive at dealerships. We also intend to maintain our commitment to align our build to shipments and shipments to retail to ensure dealer inventory levels remain appropriate.
Regarding our tariff mitigation strategy, we are ahead of schedule. We still await news from a broader 301 investigation and any update to USMCA, but we are taking the appropriate actions to reduce our tariff burden from China, and we expect to see meaningful savings over the coming years, should tariff policy remain consistent with where things stand today.
We're raising guidance because the business is performing better than we expected coming into the year and even relative to 3 months ago. We're gaining share, dealers are healthy, channel inventory is in the right place, and our operations continue to see efficiencies from our lean efforts. These fundamental metrics give us confidence in both the remainder of 2026 and reinforce the long-term earnings potential of Polaris.
At the halfway point of the year, it's worth stepping back to recognize what we've accomplished. The results we are reporting today were not driven by a single quarter. They reflect a clear strategy and several years of disciplined execution.
Put simply, we are doing what we said we would do. We said we would focus on innovation, we did. With that innovation, we said we would gain share, we have. We said we would improve dealer inventory, we did. We said we would simplify the portfolio and improve manufacturing efficiencies, and we have. And today, those efforts are increasingly visible in both our operating performance and financial results.
The progress we've made reinforces our confidence that Polaris can deliver on its mid-cycle targets of mid-single-digit sales growth, mid- to high-teens EBITDA margins and double-digit EPS growth. The foundation is stronger today than it was a year ago, and our team is executing well. The work we've done over the last several years is beginning to show in our results. The job isn't done, but we're building momentum, and we're well positioned for the remainder of 2026 and beyond.
Polaris is the leader in powersports, and I'm confident in our strategy to deliver higher earnings power and stronger returns for our shareholders. It's an exciting time to be a part of the Polaris story, and we appreciate your continued support.
With that, I'll turn it over to Bailey to open the line for questions.
[Operator Instructions] Our first question comes from Noah Zatzkin with KeyBanc Capital Markets.
2. Question Answer
Obviously, UTV was particularly strong in the quarter. So just wondering what drove the sequential retail acceleration there? And was data center construction a meaningful piece of that? And then how do you think about the opportunity there into the second half? And then any line of sight to improvement or green shoots you're seeing in rec?
Yes. Thanks, Noah. A couple of things. We did see retail accelerate into the second quarter. Remember that there is a level of seasonality that happens as we come out of the first few months of the year. It was also probably a little bit more exaggerated, given a late start to the marine season. We saw the retail pickup in pontoons as we came into the second quarter.
I'd point to a couple of the new products, the new cab RANGER 1000 and XP 1000 at the entry level. Those drove considerable share points. And obviously, that drove us above and beyond what the market was doing, which led to the share gains that we had coming into the first quarter. And then obviously, the continued strength around things like the RANGER 500, which was the highest-selling vehicle across the industry.
Certainly, the commercial business continues to operate strong. It is data center as well as just large mega construction projects as the firms look for more vehicles to be on site as those projects are starting to move forward. It's tough to say what that trajectory looks like.
Obviously, if you look at the broader projections, I would say those markets are going to continue to grow. We're obviously playing that a little cautious as we look forward. We've obviously built in what we're expecting in terms of higher demand relative to what they're going to need for vehicles on site, but we'll continue to learn more as we go and those projects continue to get built out.
On the rec side, look, it's been a couple of years. It feels like even longer. Just given where we're at in terms of the overall consumer, on the rec side, the vehicles are a want, not a need. And the good news is we know people are using the vehicles. It's hard to find a boat slip. You look at repair order activities for our off-road vehicle business. You look at tire consumption, oil consumption, where we can track miles ridden, we can see that it's up. It's above where we were back in 2019. So that's all good. We see it in parts coming through our PG&A business.
But the consumer remains somewhat on the sideline, especially at the low to middle of the range. The high-end customers I talked about, I don't want to say they're immune, but they tend to be more cash buyers. They've got higher disposable income and they're not being as impacted. But as you get down into the mid and definitely into the lower ranks of the customer profile, inflation is persistent.
The good news is we are seeing at least some initial signs that it's slowing, but it's still well above the Fed's target of 2%. We've moved from interest rate cuts to now a talk of interest rate increases. Oil prices are all over the place, given the conflict overseas. And that's created, I think, some concern on the macro side. And I think anything large discretionary is seeing a heavy impact. And really, that's where our rec business fits in.
So as we talked about, we've made sure we've continued to make adjustments in our inventory profiles at the dealer where we see strength in the utility side, which makes up 70% of our Powersports segment. We've leaned in heavier to make sure they've got the right inventory. And on the rec side, we've continued to pull back where appropriate to make sure that we've got the inventory sized in a good spot.
Maybe just one more. Operational ORV adjusted gross margin came in better than expected. So if you could just speak to the operational savings and efficiencies, I guess, you've seen in the quarter and then how you think about the opportunity looking ahead?
Yes. I mean the promo in the business has started to come down. We've certainly benefited from mix. Even with some of our value models selling at a higher rate, we're still doing really well at the high-end NorthStar on the utility side, which obviously brings nice margins with it.
I think the underlying work we've done in all of our factories to lean out and get the business ready for the volume to come back, and now you're seeing that as the volume ramps up both in Huntsville and in Monterrey, you're getting incremental savings. I was really happy with the performance. I mean, I talked about it in my prepared remarks.
Our overall company margins were up 82%, gross margins that is, 82 basis points. And that's with a pretty significant year-over-year increase in the ongoing tariff expense. We really hadn't incurred much of that in the second quarter of last year. Everything was still ramping into inventory and really hadn't come through the P&L.
And I think it's just a testament to the work being done inside the business. Obviously, we'll have more to say as we get through the year, but it certainly is a nice [Audio Gap] and continue to build from. And you look at the combination of the slight price increases we've had, lower promo costs and then just efficiencies of getting more volume through the factories, it's a really strong setup for the business as we move into the second half.
Our next question comes from Joe Altobello with Raymond James.
So Mike, I just want to pick up where you left off there regarding the promo environment. You mentioned that it was easing a little bit here. And obviously, tariffs are a bad guy for you guys, but they're, I think, worse of a bad guy for some of your competitors. So is that playing a role? And are you seeing any changes from a strategic standpoint from your competitive set, given those tariff pressures?
Not really. We announced this morning a factory authorized clearance. What I will tell you is our noncurrent inventory is in even a better spot than last year and last year's was in a great spot. So we don't anticipate that moving significant increase in promo. As we've talked in the past, it just becomes a really good way to drive foot traffic as well as help the dealers clear out any of the remaining 2026 vehicles they have.
We really haven't seen much broadly in the industry. I would say that we do have a couple of competitors that continue to have elevated inventory levels, but the promo activity associated with that has been a lot more surgical than broad and really hasn't had a deep impact on us and how we're moving forward. And we expect this -- when we get into the back half, promo as a percent of sales comes down slightly. Part of that is the mix of vehicles, but it's also the fact that we continue to run at really strong inventory levels and have the right mix of vehicles at the dealers.
I referenced it in my prepared remarks, sales velocity was up 18%, which essentially is us measuring how fast does it take us through our dealerships to retail vehicle. And an 18% improvement means we're paying less in floor plan. It means the dealer is able to rotate more vehicles through. It's good for them. It drives more profitability. And I think it's reflective of the fact that we're getting the right mix of vehicles into the right dealerships as we head into the back half.
Got it. Okay. And just a follow-up on that in terms of the guidance. So you raised guidance by $0.45 at the midpoint this morning, ex IEEPA refund. If I recall correctly, you beat the first quarter by $0.58, held off on raising. You beat this morning by $0.26 at the midpoint. So why the delta between the guidance raise and where you've beaten it so far in the first half?
Yes. A couple of things. One, it will be the same -- you'll hear the same thing from us that you've heard in the past, right, which is there's an awful lot of uncertainty as we head into the back half. I was encouraged with the fact that USMCA was not canceled, but they're also not done with whatever discussions are happening. We're still waiting on some 301 excess capacity investigation work. And frankly, the interest rate environment, I think, has everybody kind of stepping back.
So leaning in from that standpoint, it doesn't seem to make a lot of sense. So obviously, if things were to continue like they did in the first half, we would obviously do better, but we're trying to play that a little bit cautious. The second thing, and Bob talked about this in his prepared remarks, commodity prices are through the roof. And the good news is we're offsetting a significant portion of that and driving -- more than offsetting improvements through operations, but that has chewed away at some of the beat we would have essentially flowed through to the back half as we look at higher aluminum and steel, obviously, oil and diesel. We're hedging, but that just tends to mute and dampen the effect as opposed to eliminate it.
Yes. I mean as we look at the back half of the year, to Mike's point, with commodities, I mean it's a couple of different stories, right? With the war in Iran and the pressure on oil, we see that in diesel, plastics and other petroleum-based products. That's a decent chunk. The bigger piece is steel, aluminum, copper with steel and aluminum far and away being the leaders there.
And some of that's just driven by the tariff structure now and the push for the use of U.S. steel. We are fortunate in that, as we talked about last quarter, we use U.S. steel in all of our products that are made here in the United States and Mexico and have those contracts in place. But you've got a lot of people out there scrambling now to buy U.S. steel and puts a lot of pressure on the forward curve on steel. There's some thought that that's going to return to earth here in the second half of the year. But by the time we get to there, we'll already have bought our steel for the year. So if there's relief, we won't see much of it until next year.
And then a piece a lot of folks aren't talking about is line haul. We don't -- it's not really a commodity. We don't -- but we include it as we think about commodities. And with all the pressure on both documented drivers and the increased enforcement from the federal officials on that and then some of this activity that's been happening with these really large verdicts against all the transportation brokers, there's a tremendous amount of price pressure on the human side of trucking, not just the diesel side.
And so we've got what we can see baked in. Obviously, we're hedged. We hedge about 50% of our exposure, but we're not 100% positive where that goes in the second half of the year. It's certainly been a lot more volatile than we expected when the year started.
Our next question comes from Craig Kennison with Baird.
I wanted to ask about ORV utility. It was up in the low teens. Is there a way to frame that demand strength in the context of consumer buyers versus commercial buyers?
Yes. Just to clarify, the XD products that we sell to the rental firms, those do not -- those are not included in retail. So the commercial stuff that can bleed over into retail is kind of standard product being purchased by rental companies through dealers and things like that.
So I would say, Craig, the bulk of that growth in the quarter is really driven by primarily utility to the more traditional industries we talk about with utility, where it's farmers, ranchers, vineyard owners, large property owners, things like that. So there's probably a little bleed-over impact from rental and commercial in there just as commercial markets do better because some stuff gets bought at dealers, and we don't see that as much, but it's primarily driven by the traditional markets.
And we've been hearing more about some of the strength in your commercial operations more recently, including strength with rental companies, data centers, infrastructure projects, as you mentioned. I wonder, have you taken a look at framing the total addressable market you have in that commercial segment? And do you have an opportunity maybe to focus on that more, now that you've simplified the business in recent years?
Yes. I mean it's a good point, Craig. And it's really the point we've tried to get at now for several years. We were -- I'll just give you the example we've used with a few investors. I mean when you look at our commercial business and the government and defense business, all those together, basically, are the same size Indian Motorcycles was, but obviously making a significant amount of profit as opposed to losing money.
The reality is we had not put a lot of time and attention around that, and for obvious reasons, we were focused on trying to get a money-losing business to profitability. And the benefit we've seen as we've cleaned up the portfolio is our ability to really refocus and make sure that we've got investment in those categories.
And the nice part is -- and we tend to talk about the commercial side just because it gets more of the attention around some of the commercial build-out, the data center build-out. But our government business, our defense business is growing incredibly fast as well. I mean it was in the news not too long ago about the marine contract that we won. We continue to win at the state, local and federal level with vehicles that go to police, fire, border patrol, you name it. And then obviously, our commercial business has been successful with selling primarily into the rental agencies, rental firms that are supporting a lot of the construction build-out across the country.
And so we're continuing to make sure we focus and some of that's just good old prioritization in the factory to make sure we've got enough capacity, making sure that our upfit centers, where we do some of the final work to get the vehicles ready, has the right resources, time and investment, and we're going to continue to look for that as an opportunity.
The thing we're trying to understand, as it relates to data centers, is what does that look like longer term? I mean we certainly have visibility to what the construction build-out profile is. But the use case for the vehicles is something we're continuing to learn. And so we'll know more over the coming couple of years as to what the replenishment cycle looks like, what happens once they're done with the construction on the site and what kind of vehicle requirements do they have at that point in time.
Yes. I mean one of the things, Craig, as we think about this commercial business and we think about investment, we've made some investments in the last couple of quarters on the parts and support side of the business to make sure we -- uptime, obviously, is super critical to that. We have a lot of experience in that area through our military and government business, particularly military. We do a lot of work with them to make sure they've got staged parts and they can repair vehicles quickly in the field.
And that same skill set kind of crosses over into the commercial space as we look to make sure that we've got parts in the right places at the right time so that they can quickly repair units and get them back in service. And so that's another growing part of the business. We have a big installed base. And now with all these projects, the base -- the vehicles are getting used a lot, hours are up, and so it starts to consume parts. So we're investing there. We're going to continue to look at what else we can do in that space, but definitely an area of opportunity we see going forward.
Our next question comes from Molly Baum with Morgan Stanley.
Maybe a bit of a follow-up from that last one, and I don't want to front-run the model year launch in August too much. But you've called out traction in value-oriented products, cabbed utility vehicles and then commercial as well. So I guess, how are you prioritizing new product development across all 3 of those opportunities? And then kind of follow-up related to that, you've talked about investments in parts support for commercial, but are there any specific capabilities from a product standpoint as you continue to kind of invest and innovate here that could maybe better position Polaris for commercial applications?
Yes. Maybe I'll talk about the last first. Bob hit on it. We've developed a model. The use case for the commercial vehicles is very different than what your typical consumer uses. And so, given our history, we've effectively tailor-made these vehicles. And as a result of that, we know exactly what components we need to make sure that we're carrying. Our back order status, even with all this growth, has dropped significantly. Our ability to deliver on time to these rental agencies, a lot of which do their own repair activity, has hit record levels, relative to being able to fulfill the demand that they have.
And we continue to look for other opportunities. My background was coming out of aerospace and one of the things that we did to ensure uptime on jet engines was to make sure we had spare pools whether that was complete engines or parts. And so, given the growth that we've got in commercial, those are the types of things we're starting to explore, which is really interesting to us.
And as I mentioned when I was answering Craig's question, something that we probably wouldn't have focused on in the past because we were distracted by things that we're probably not making anywhere near the returns that we're getting out of the commercial business. So I think that presents a significant opportunity for us, and we'll continue to look for ways to grow and build off the high level of support. And the fact that we have such a prominent role, I think, is reflective of the value that we can bring and the confidence they have both in the vehicle as well as our ability to support their uptime, which is really important.
As far as the product investment prioritization, we've done a lot of work over the past 5 years to really understand product life cycles, where the consumer is, what the demand profile is. And I can tell you that all of that goes into a calculus. I'm not going to get into a lot of the detail here. That both supports the utility and the rec side of the business.
As I mentioned, we're going to have some news as we head into next week at our upcoming dealer show. We've got more news coming early next year. And it's all exciting stuff. It's based on product cycles, product generation as well as understanding how the consumers are using the vehicle. And I think, as demonstrated by the innovation we've delivered in the last 5 years, we're hitting the mark and we're hitting it well, and we're going to keep that streak going.
I think just to build on Mike's answer on your commercial question, the vehicles we sell in the commercial space are very customized for that space. And we've been doing this for a long time. Those vehicles are diesel-powered. They have different seating, different seat belts. They are slowed down. They typically [ operate ] at 25 or 35 miles an hour. And they have a lot of heavy-duty parts and over the last several years, we've learned -- as we've had this experience with the rental houses, these vehicles in these tough environments, we've learned what breaks, what's hard to repair, what makes it easier for them to manage these vehicles in the field.
And so it's a fairly different product than our standard RANGER product. And so I think that positions us really well, and we're going to continue to build on that. As one of the things, as Mike said, we're trying to understand is what really is the usage and the life cycle at data centers. And there's not a great answer to that question right now because this boom in data center construction is a recently -- fairly recent thing. So we're working with those customers and those applications to understand is the vehicle used the same as it is on other big construction projects? Is it different? Are there specialized things they're going to need.
So we'll continue to refine that product and make sure we're offering leading products in the industry for those very difficult applications as this rolls out.
And Molly, one of the things I failed to mention when I was talking about the product prioritization, you've seen this from us over the past couple of years. We did a lot of work to understand customer segmentation. And one of the things that we became brutally clear on is we, like many others, had chased customers to the high end of the market and we had left a gap at the lower end. And I'm not talking cheap, cheap low entry-type stuff. I'm talking just entry-level vehicles and you've seen us reprioritize around that. The RANGER 500 is a prime example.
That is a customer set we had missed. Clearly, as demonstrated by the demand for that vehicle, there's a desire for people to get into a Polaris at sub-$10,000. There's a subset of those customers that will eventually trade up, and that was what we were missing all along. And I would tell you that as we look forward, we got to make sure that across our product portfolio, we are hitting all those customer sets to ensure that we are cultivating and bringing the new customers in and obviously providing them an opportunity to move up the price ladder with Polaris as opposed to a competitive vehicle.
Our next question comes from Gerrick Johnson with Seaport Research Partners.
A perfect segue into the question I want to ask about the RANGER 500 and the 1,000 cab units, those doing well. Who's the buyer there? Is there any evidence -- now that you've had the RANGER out for about a year, is there any evidence that these are bringing in new customers? Or are they enticing maybe replacement buyers or maybe more commercial? So who's the buyer there?
Yes. I mean one of the things, Gerrick, that we track is cannibalization. Any time we introduce a product, especially the RANGER 1000 and XP cabbed, we make some assumptions. The cannibalization has been significantly less. We obviously are seeing people that would have bought an un-cabbed unit moving into this category because they would have tended to buy an un-cabbed unit and then buy cabbed components and they're getting a much better deal when they buy this vehicle in terms of the additional accessories that do come on it.
But it is driving incremental volume. So it's not just moving people out of that un-cabbed to the entry-level cab. We have not seen cannibalization of people moving from a NorthStar Ultimate down into this category. So that's good.
On the RANGER 500, I think we've quoted this before, about 70% of the customers that are buying that vehicle are new to Polaris. That's important because these are customers we would have lost to some of our low-cost players in the industry. And the good news is that we know that once we get these people in, there's an opportunity for us to potentially move them up into a RANGER 570 or to an entry-level 1000 as they use the vehicle more and start to realize that maybe they want some of the additional comfort that come with a full cab vehicle. And frankly, if they don't, they stay in the RANGER 500, that's just fine. We've got plenty of accessory offerings there, and we like making sure we've got more Polaris customers coming into the fold.
And even though it is the fastest growing as a total percent of our portfolio, these vehicles are still relatively small. So obviously, given our margin performance, you're not seeing heavy dilution from a margin. In fact, it's good because we're getting more volume through our factories, and our mix at the mid and high end of the category remains strong. So margin performance is not much of a concern right now.
Okay. That's great. And I just wanted to ask a follow-up on that. Some dealers are a little bit reticent to sell the unit with "no margin" in it. But I'd assume that there'd be an attach rate of parts and accessories, given that these are barebones machines. So what does the attach rate look like for parts and accessories, both for aftermarket parts, and what they add on at the dealership?
Yes. I mean there certainly is opportunity there, and it's obviously a lower level than we see even on a NorthStar Ultimate. Not necessarily something I'm going to get into a lot of the detail on, but it was a big part of when we came out with the RANGER 500 is making sure that we did have the accessories that we knew the customer at that price point would be looking for. So that does give the dealer an opportunity to make additional margin.
We've spent a lot of time working through how do we help the dealer be successful. developing things like tear sheets that are essentially a one-page document that they can hand to the customer that makes recommendations on kind of the most accessorized components for the vehicle just so that they're aware. Certainly, the configurator that we have as a business, which is unique to us, relative to many of our competitors, is something that, in-store, the dealer can take the customer through and gives them an opportunity for more accessories.
And then quite frankly, it's developing the relationship with the customer, both from a service perspective as well as eventually, down the road, if that customer is looking to trade up or continue to replenish the vehicle, that gives them an opportunity for ongoing revenue streams.
Yes. Gerrick, I mean there's a bit of a retraining here. We did, I guess, such a good job of moving everything to a lot of the factory-installed accessories. Now we've got these vehicles that come with very few installed accessories.
And so it's a bit of a retraining for us and for the dealers to make sure we've got all those selling processes right in the dealerships so that they're offering, to Mike's point, different things to make it easy for a salesperson to walk a customer through sort of what the normal accessories or typical accessories are and try to capture those both at the time of sale and then working with marketing teams to make sure we're -- 6 months down the road, 3 months down the road, we're popping those opportunities in front of those buyers for things that maybe they didn't want to spend the money on at the time when they bought it or didn't know they need, and make sure they see the accessories they can buy to add to the uses for their vehicle.
Our next question comes from James Hardiman with Citi.
So wondering if you could share any color around the shape of demand within the quarter. Obviously, you had, I think, 5% growth in ORV. Just curious, clearly, it was a roller coaster ride in terms of headlines over the course of the quarter. Curious just how much volatility that created? And then any color on July would be great as well.
Yes. I mean there was certainly volatility within the quarter. I think we talked a little bit about that even coming out of the first quarter. The headlines certainly do drive, I think, some consumer behavior relative to, hey, we think we have a resolution, now we don't have a resolution, oil is up, oil is down. And so we do see some of that volatility certainly playing out.
The good news is the month of July is playing out consistent with what we saw in the second quarter, which is utility remaining strong, rec remaining challenged. And I think that's kind of what we anticipate going forward. As I talked about, obviously, first half retail was up. We're expecting second half retail to be flattish. Obviously, if it's better than that, we're positioned well to take advantage of that.
But we think it's prudent to plan that way. And that's really forecasting the utility business to remain up and rec to remain somewhat challenged in that back half. And I think until we see clarity around interest rates, we see clarity around inflation, some resolution overseas and oil start to stabilize, I'm not sure we see that dynamic change much in the near term.
Makes sense. And then maybe initial thoughts -- it's way too early, initial thoughts on 2027. Obviously, you're not going to be giving us guidance here today. But at least on the tariff piece, help us with some of the puts and takes. Obviously, we can peel back the refund piece, and I certainly appreciate the operational numbers that you've given us today. But I think I heard Bob say there's maybe $40 million in refunds remaining. I'm assuming that's a 2027 event. You're also getting out of China. I think that's more of a '28 benefit than 2027 as we think about that. So maybe walk us through some of those moving pieces. And then anything operationally we should be thinking about into '27 would be great.
Yes. I mean it's tough to comment much on tariffs. I mean there's still uncertainty around where does USMCA go, where is this next 301 investigation relative to excess capacity. The good news is, to your point, we are driving content out of China at a rapid pace. We're actually slightly ahead of schedule. And at the end of this year, we'll be down to less than 5% of our material cost of goods sold coming from China.
And the good news about that is a good portion of that is coming back to either the U.S. or Mexico, which helps us from a content requirement standpoint relative to USMCA. We do think that they'll probably push for higher content requirements. So we're making sure we're well positioned for that as a result of some of the other activities we've got going. So we'll obviously have a fair amount of that work as we get to the end of the year.
As far as the tariff refunds, tough to say. We still have the broad $125 million number, of which we've booked a good portion. There's obviously some portion of that that's dependent on our suppliers getting refunds and bringing those back to us that we're working through. I would hope that we could get that accomplished all this year. It's cash we're due back, and we're working aggressively to make sure that we get that.
And as we get into next year, volume is going to be the key question in terms of where do the markets [Audio Gap]. The good news is we've demonstrated getting a little bit of incremental volume through our plants, yields pretty strong, incremental margins that range anywhere from 30% to 40%, and obviously, we will look and keep that momentum going into next year.
Our plants are running at about 70% capacity. That's a pretty broad number. Each plant is obviously different. And that's far from where we view as optimal. So that gives us plenty of opportunity to get more operating leverage and margin expansion as we move forward.
Yes, James, you were correct. The roughly $40 million to go and about half of that we got to collect from suppliers, about half is stuff we've got to file with the government where the window to file isn't open yet. I would share Mike's optimism. A lot of our supplier refunds were stuff they applied for in the first 2 phases. And we've got good documentation around that, working well with the suppliers to get that back. I think we'll see that over the next couple of quarters. We're not going to book it until it shows up. And then the stuff that we haven't filed with CBP yet, we'll report as we file when they open the filing window. We don't know when that will be. It's been bouncing around quite a bit.
Tariff picture headed into next year, to Mike's point, is pretty much the same. We're not expecting big changes. We'll see what happens with USMCA and this other 301 that's out there. But we are -- we will get the China spend down. That will really, to your point, be a '28 thing. We'll be down to sub-5% by the end of '27. We'll see some benefit from that in '27, certainly start to see and show up in working capital as those purchases from more local suppliers roll through. And it will be obviously all stuff that we'll talk about as we get closer into next year and start talking about guidance.
Got it. Just a point of clarification. You think that you might get the remaining $40 million in the back half, but that's not in your current guidance, correct?
It is not in our -- neither the cash nor the P&L impact is in our current guidance. I think we'll get a chunk of the suppliers' stuff, the stuff that still has to be filed with CBP. I have no view on whether that will be second half of this year or early next year. It's a pretty complex thing, and there's a lot around them getting organized around the last phase because it's all of the more complicated refunds. Fortunately, the bulk of -- as Mike said, the bulk of what we are getting back was in Phase 2 and we filed that, and we expect to see that cash roll in, in Q3.
Our next question comes from Anthony Bonadio with Wells Fargo.
So I just wanted to touch on market share a little bit. I know you guys have taken share for 5 quarters in a row now. And I know some of this is driven by some of the stuff you've done on the innovation front. But can you just maybe talk through who the key donors are there at this point? And maybe how to think about a possible competitive response from a product perspective as the new model year rolls out?
Yes. I mean I think probably more of our dynamic is we're going to start lapping some tough compares, when we start picking up momentum, in the back half of last year. So I think the primary challenge will probably be ourselves. As we look forward, we've got a lot of great new stuff coming out, both in the back half of this year as well as heading into next year. So I think the pipeline is really good.
And I would like to hope that the industry remains rational. We have seen inventory levels come down. The vast majority of the industry has gotten inventory in a good spot. We still have a couple of players who are, on a relative basis, very high. But we haven't seen necessarily any significant promo or channel activity related to that. But frankly, that could change tomorrow.
I think, given the products that we have coming out, I think the refresh we've done around our products, we've got the broad category covered. And I think, for me, it's really about hopefully getting some green shoots around the rec business because I think we're positioned really well with the products, the Pro R, the XPEDITION, you name it. We're in a prime spot to really take [Audio Gap] in that category.
That's super helpful. And not to beat a dead horse on commercial here, but if I heard correctly, I think you said commercial is excluded from the retail figure that you guys report. I guess if that's right, what would that mid-single-digit ORV demand growth figure look like if it was included? And just anything you can say to better frame the size of that business for us?
Yes. Look, I don't want to get into the details of it because, I mean, it isn't a retail vehicle. As Bob highlighted, this vehicle is purpose-built. And once they're done on a job site, most of these vehicles are retired permanently. They're used in a pretty rough environment. The fact that we put Kevlar on the back of the seats and things like that gives you a pretty good idea.
We don't talk about the size of the commercial, but I did talk about the size of our commercial gov and defense category, which is essentially vehicles that are being used outside of, call it, the retail environment. And that business, I size pretty close to what Indian Motorcycle's was when we divested the business.
Our next question comes from David MacGregor with Longbow Research.
This is Joe Nolan on for David. You guys had a number of initiatives in recent years to improve margins, including lean manufacturing, production efficiencies, et cetera. Can you just talk about volume leverage and give an update on incremental margins, given all the work you've done on that front?
Yes. I'll let Bob kind of get into the incrementals. But the one thing I will remind everybody is, yes, we have done a lot of work. We are still in the early innings. I'm encouraged with what I've seen from the team. But we have much further to go in terms of getting Lean fully adopted in all of our manufacturing facilities as well as in the front office of our business because there's opportunities there, especially as we enhance some of our IT systems in the coming couple of years as a business.
The good news is, with demand stabilizing, we're not talking about shipping at lower levels. We're now matching ship to retail, and that's giving us a better opportunity to really leverage volume as we get it through the factory, and that's obviously driving some pretty strong incrementals that I referenced and Bob referenced during our prepared remarks.
Yes. I mean if we think about the incrementals, Q2 was pretty good. If you took out tariffs, both refunds and kind of net new tariffs and commodities, we'd have been in the low to mid-30s and we'll be a little better than that for the full year. Obviously, it's a little noisy by quarter. You get into Q3, Q4, we start [ shipping snow ] and we have other dynamics that make it a little lumpy. But I think if you focus on the full year, really solid incrementals.
And obviously, commodities are something that we own and we got to go try to overcome. But I think it just shows the level of performance coming through the factories. And to Mike's point, we're not done. We're still, I would say, maybe third inning of our lean journey as a company. And so I still think there's a lot of factory improvement to drive over the next few years.
The localization of the supply chain and moving that stuff out of China, part of the incremental benefit of that is just having those suppliers be a lot closer. We can work better with those suppliers. We can continue to tailor what gets delivered, plan how it gets delivered, when it gets delivered to fit into our new lean flows.
And so I feel really good about the setup and the increasing skill of the team. And so I do think that there's a few more innings to play out as we continue down our lean journey. So if we can get some volume, I think the incrementals are going to be really strong and well received.
Got it. That's helpful detail. And then it's a smaller part of your business, but international sales were up 28%. Could you just talk about what you're seeing in some of your international markets?
Yes. I mean, look, we've gotten a lot more focused. We don't talk about this as much as maybe some of the other ones. But as we've gotten the portfolio rightsized, we've gotten into a far more surgical approach. I mean, international markets for us are challenging because there isn't necessarily a market that looks a lot like the U.S.
And so whether it's going into Mexico, whether it's going into Australia or Europe, there are very different areas that we need to drill into. And whether it's Australia in terms of success with the RANGER product, Europe, the vehicles get used more in an on-road application, so making sure that we've got accessibility for vehicles like the RANGER 500, which are increasingly popular or you get into areas like Mexico where you're looking at high RANGER, high Pro R volume.
Each of those markets takes a different approach. And I think it's just reflective of the fact that we're a heck of a lot more focused than we have been historically. We're making sure that we've got vehicles specific to that market. The requirements within market are slightly different. So we have to go through a process to adapt the vehicle and/or have a vehicle that meets the needs in certain parts of the regions. And I would say we're doing a much better job, and that's showing up in the growth rates that we're seeing internationally.
This concludes our question-and-answer session. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
Polaris Industries Inc. — Q2 2026 Earnings Call
Polaris Industries Inc. — Q2 2026 Earnings Call
Polaris beat Q2 expectations, raised full‑year guidance after strong utility/commercial demand, margin expansion and a $74M tariff refund.
📊 Quarter at a Glance
- Sales: Reported sales +9% YoY; organic sales +17% YoY excluding Indian Motorcycle.
- EPS: Adjusted EPS $1.97 including a $74M tariff refund; operational adjusted EPS excl. refund $1.01 (vs. prior target $0.70–$0.80).
- Margins: Operational gross profit margin +82 basis points YoY excl. refunds; adjusted EBITDA from operations improved ~180 bps YoY excl. refunds.
- ORV: North American ORV retail +5% YoY, fifth consecutive quarter of share gains; RANGER 500 fastest‑growing ORV.
- Inventory: Dealer inventory down 8% YoY; dealer DSOs slightly over 100 days.
🎯 What Management Says
- Product & share: Growth driven by utility RANGER lineup and new cab units (RANGER 1000/XP 1000); product launches and dealer relationships are core to share gains.
- Commercial push: Commercial, rental and data‑center demand seen as a durable growth vector; investing in parts and uptime to support that market.
- Supply/Tariffs: Accelerating localization to cut China‑sourced material to <5% by end of 2027, pursuing tariff refunds and executing tariff mitigation actions.
🔭 Outlook & Guidance
- Sales guide: Raised full‑year sales to $7.3B–$7.5B (was flat to +2%); organic growth ~+10% ex‑Indian Motorcycle.
- Profit guide: Adjusted EPS $3.00–$3.10; operational EPS $2.05–$2.15 (prior $1.60–$1.70); adjusted EBITDA margin +250–275 bps (operational +145–170 bps).
- Headwinds: Expect ~$215M in tariffs this year, a $70M commodity cost headwind, and an estimated ~$40M additional tariff refund opportunity not included in guidance.
- Near term: Q3 sales expected +4–5% YoY; second‑half EPS roughly $1. Net leverage improved to 2.6x and is expected to decline further.
❓ Analyst Q&A
- ORV detail: Strength came from new cab models and RANGER 500; ~70% of RANGER 500 buyers are new to Polaris, with limited cannibalization to higher tiers.
- Commercial sizing: Commercial and government/defense demand (including data centers and rental fleets) is expanding; company investing in customized vehicles and parts support to maximize uptime.
- Tariffs & commodities: Remaining ~$40M refund timing is uncertain and excluded from guide; steel, aluminum and line‑haul costs remain material risks despite ~50% hedging.
⚡ Bottom Line
- Takeaway: Q2 confirms improving operating leverage: share gains, margin expansion and stronger EPS drive a raised guide, but upside depends on tariff refund timing and commodity/tariff policy. Utility and commercial demand are the clearest growth levers; recreational demand and input‑cost volatility remain principal risks.
Polaris Industries Inc. — Q1 2026 Earnings Call
1. Management Discussion
Good morning, and welcome to the Polaris First Quarter 2026 Earnings Conference Call. [Operator Instructions]. Please note, this event is being recorded. I would now like to turn the conference over to J.C. Weigelt, Vice President, Investor Relations. Please go ahead.
Thank you, Gary, and good morning or afternoon, everyone. I'm J.C. Weigelt, Vice President of Investor Relations at Polaris. Thank you for joining us for our 2026 first quarter earnings call. We will reference a slide presentation today, which is accessible on our website at ir.polaris.com.
Joining me on the call today are Mike Speetzen, our Chief Executive Officer; and Bob Mack, our Chief Financial Officer. Both have prepared remarks summarizing our 2026 first quarter results as well as our expectations for the remainder of 2026 and then we'll take your questions.
During the call, we will be discussing various topics, which should be considered forward-looking for the purpose of the Private Securities Litigation Reform Act of 1995. Actual results could differ materially from those projections in the forward-looking statements. You can refer to our 2025 10-K and our other filings with the SEC for additional details regarding risks and uncertainties. All references to 2026 first quarter actual results and future period guidance are for our continuing operations and are reported on an adjusted non-GAAP basis, unless otherwise noted. Please refer to our Reg G reconciliation schedules at the end of the presentation for the GAAP to non-GAAP adjustments.
Before I turn the call over to Mike, I'd like to recognize the upcoming retirement of Peggy James on May 1. Peggy has been an integral part of the Polaris Investor Relations team for more than 20 years, and her contributions over that time have been tremendous. We will miss her experience and steady presence on the team and wish her all the best in retirement, likely spending more time with their grandchildren, more time on the golf course and enjoying more snowmobiling.
Now I'll turn the call over to Mike Speetzen. Go ahead, Mike.
Thanks, J.C. Good morning, everyone, and thank you for your interest in Polaris. We delivered a strong start to the year with our first quarter results reflecting strong fundamental performance across the business. I'm proud to say our team did an excellent job focusing on what we could control, executing commercially driving operational efficiencies, advancing our tariff mitigation plans and optimizing our portfolio. Results exceeded our expectations during the quarter, with reported sales up 8% or up 14% organically, excluding Indian Motorcycle and its related impacts. And we delivered adjusted EPS of $0.13, which was well above our expectations. And EPS, excluding Indian would have been $0.26.
First quarter sales were driven by double-digit growth in our Power Sports segment. led by our utility RANGER line, our fast-growing commercial business and Snowmobiles. PG&A also had another great quarter, bolstered by strong performance in utility and 14% growth in snowmobile, accessories, parts and apparel as ridership remains strong. Across our portfolio, North American retail grew 1% with ORV up 3%, both measured exclude used vehicles. We ended the quarter with share gains in both ORV and Snow as well as with Godfrey pontoons.
Dealer inventory levels remain healthy, reflecting strong operational alignment across our manufacturing plants, shipment plans and retail channels. Our margins, even with 240 basis points of headwind from tariffs, we're able to improve gross margins by 389 basis points. This was higher than our initial expectations due to a better mix within ORV and Marine, more favorable net pricing as well as improved operational efficiencies.
Adjusted EBITDA margins increased 277 basis points with strong operational performance, partially offset by the timing of certain operating expenses moving into the first quarter. This resulted in an adjusted EPS of $0.13, well above our original expectations. Overall, it was a strong start to the year, and we believe the actions we have taken to refocus Polaris are creating a stronger foundation for the future. advancing our focus on leadership in Powersports, localizing and strengthening our operating footprint and positioning Polaris to deliver higher earnings power and stronger returns over time.
Digging deeper into retail, North American ORV retail was up 3%, and we gained share for the fourth consecutive quarter. While retail within the recreational category continues to be challenged, down high single digits this quarter, we are seeing strong growth in our utility business, which speaks to the strength and diversification of our product portfolio. Utility ORV, which now makes up 70% of ORV revenue grew to a high single-digit rate as the industry continues to grow. While the growth in utility remains broad-based across our product portfolio. We did see an uptick in demand for vehicles used to move equipment and people across large data center construction projects that can span hundreds or even thousands of acres. As these build-outs continue to expand, we see this as a secular tailwind for the business and believe we are well positioned to continue gaining share in supporting that demand.
The monthly cadence of retail performance in the quarter started out strong in January and February given a constructive consumer backdrop. However, this was followed by a decline starting in mid-March, which correlated with increased geopolitical tensions and rising oil prices. Interestingly, we are now seeing retail performance return to growth in April with positive metrics across all categories, excluding youth, where we continue to build back inventory.
For Snowmobiles, the '25'26 season delivered retail growth of 25% and driven by early season snowfall in the flat lands. Conditions varied later in the season, but many mountain areas experienced lower snowfall with some seeing close to low snowfall levels on record. Despite this, we gained multiple points of share due to our strategic promotional activity to help dealers move noncurrent inventory and innovation in the Wide Track and Sport Utility segment.
Turning to Marine. First quarter retail was down low double digits according to the last SSI report, which is not a complete data set with important states yet to report. The first quarter represents about 10% of annual retail and therefore, we don't extrapolate these results the rest of the year. Importantly, boat show activity was up year-over-year for both brands, and there remains strong excitement around our premium offerings at both Bennington and Godfrey.
Before moving on, I want to touch on our product portfolio. something that can be hard to fully appreciate through a 10 or 20 dealer survey. Simply put, this is the strongest portfolio I've seen in my nearly 11 years at Polaris. Our broad ORV lineup delivers a distinct customer on distinct customer needs, whether it be for a work vehicle to find their next adventure or to have an unmatched day on the dues. Our category-defining utility vehicle, the RANGER XD 1500 sets the sets the bar for capability, while the Polaris expedition offers the industry's only adventure vehicle. And for customers looking for uncompromised performance in the wide open category, the Razor Pro R has continued to define what's possible with victories at the car, King of the Hammers Desert race and our recent wins at the San Felipe 250, demonstrating the vehicle's leadership.
The innovation at the top carries down across the lineup. We've talked about the success of the RANGER 500, which delivers exceptional value to customers and continues turning at dealers at unprecedented levels. and the recent launch of the new RANGER 1000 cab and RANGER XP 1000 cab, which strengthens our offering in the latest and fastest growing full cab utility category. In fact, we are seeing strong double-digit utility side-by-side retail growth in April on the heels of this launch. In our seasonal business, we launched our model year '27 snowmobile lineup in February which featured the expansion of our Rec utility sleds and the new 9RVR1dynamics.
Originally launched on our Razor lineup, Dynamics technology was later introduced in our snow portfolio in 2025 and it remains the industry's only snow system with full shot control. This year, 1/3 of SnowCheck orders included dynamics.
In Marine, we continue to set the standard for innovation and quality with the newly redesigned Bennington QX and the Godfrey Sanpan, which was named Boating Magazine's Pontoon of the Year and the Hurricane Sundeck 3200 won the innovation award at the Miami Boat Show. It's easy to focus on individual products, but would truly differentiates Polaris as the strength of our entire portfolio. We're the global leader in powersports, and we operate like it, living the riding experience and constantly working to make it better. And while it's still early, I'll say this, I have not been misexcited about what we have yet to come. Dealer inventory continues to be in a good place as we've taken a thoughtful approach in pacing our shipments in line with current demand.
Our dealer inventory levels are healthy across our major categories. With some help from Mother Nature this last season, we made significant progress on snowmobile inventory and ended the quarter down over 50% from a year ago. We exit the snowmobile season with dealer inventory healthier than it's been in many years. So whether you look at our inventory on a days sales basis, which remains near 100 days or on a current to noncurrent mix, which skews positively to more current our inventory at dealers is in a good spot. We remain committed to the alignment of build, ship and retail as we partner with dealers to provide them with the right mix and quantity of vehicles to succeed.
I'm now going to turn it over to Bob to provide you with more details on the financials.
Thanks, Mike. We delivered a strong first quarter with results that exceeded our expectations coming into the year. Before turning to the quarter, I want to note that we are now reporting our business in 3 new segments: Polaris Powersports, Marine and Aixam & Goupil. Going forward, we will discuss our performance through this new segment structure, which I'll touch on in more detail in a moment. .
Sales were up 8% or approximately 14% organically when excluding Indian Motorcycle. Growth was led by strong hour sports performance in ORV, commercial and seasonal, and we also benefited from positive net price reflecting higher year-over-year selling prices and lower promotional activity. Internationally, our Powersports segment was up 7%, which includes ORV and seasonal products sold outside of North America. Adjusted EBITDA margin improved by approximately 280 basis points, primarily due to favorable mix in all segments. Net price also flowed through to benefit margins, and we continue to see gains from operational efficiencies. These improvements were partially offset by higher operating expenses, largely related to the timing of certain costs moving earlier in the year than originally planned.
Tariffs also posed a 240 basis point headwind in the quarter but were in line with expectations. Keep in mind that the significant new tariffs were first imposed in April 2025. Altogether, this strong operating performance drove adjusted EPS of $0.13 above what we expected back in January.
Now turning to our new segment structure, which we introduced during the quarter. The reportable segments are Polaris Powersports, Marine and Aixam & Goupil. We designed the structure around our customers who they are, what they buy and where they buy it, which better aligns the organization with our dealer channels and how we go to market. Polaris Powersports is almost 90% of total sales and includes all products from the former Off-road segment with the addition of Slingshot. Marine remains the same and carved out of the former On Road segment is Aixam & Goupil which are 2 small vehicle businesses in Europe.
Aixam manufacturers, smaller license free passenger cars, 1 would typically see in city centers and rural towns in Europe, while Goupil focuses on light-duty electric utility vehicles, sold to municipalities and transportation companies. Both businesses are based in France. Now moving to our segments. Sales in Polaris Powersports were up 14% year-over-year Ranger and commercial shipments far outpaced last year's levels as utility demand continues to grow across a variety of categories. PG&A was up 14%, driven by parts and continued oil sales which are a strong indicator of an active engaged rider base.
Gross margin in the quarter was up 422 basis points, overcoming the anticipated significant headwind from tariffs due to strong mix, positive net price and operational efficiencies. Sales in Marine were driven by a richer mix of pontoons given the recent launch of the Bennington QX and Godfrey Sanpan lineups which have generated significant excitement with dealers and customers. Both of these are premium lines for each brand. There was also a modest benefit from net pricing. Gross margin improved 64 basis points year-over-year again, driven by the mix benefit in the quarter, which we expect to continue throughout the selling season as well as higher net price.
Aixam & Goupil sales were up 9%, driven by higher shipments for Goupil and higher year-over-year pricing with Anexo. Gross margin improved 294 basis points driven by higher mix within this segment. With our renewed focus on our core business lines following the completion of the separation of Indian, our top capital priority in 2026 remains investing in higher-margin profitable growth while maintaining a disciplined and balanced approach to returns and leverage. Second, we continue our long-standing commitment to returning capital to shareholders through dividends, marking our 31st consecutive year of dividend growth.
Third, we remain focused on debt reduction following more than $530 million in debt reduction during 2025, which supports our ongoing improvement in our leverage profile. From a working capital perspective, our lean initiatives are driving meaningful efficiency gains. We continue to target a negative working capital position supported by better alignment across demand planning, procurement and production, continued supply chain localization and ongoing optimization of payables.
First quarter free cash flow is typically our weakest quarter of cash generation in the year due to seasonal payments while a net outflow, our first quarter cash flow was better than we had planned. Overall, we are very confident in our financial position. Our capital deployment is disciplined. Our cash generation remains strong we continue to strengthen balance sheet flexibility. We are reaffirming the guidance we updated on March 3 when we raised our outlook following the earlier-than-expected closure of the Indian motorcycle separation. While we remain pleased with the operational performance of the business, which drove much of the first quarter over performance. Importantly, we believe this performance is grounded in operational discipline execution and factors that are within our control.
We continue to manage the business, anticipating a relatively flat retail environment with build, ship and retail closely aligned. This approach helps maintain healthy dealer inventory and reduces the need for excess promotional activity, which benefited results in the first quarter. Given our first quarter performance, strong underlying fundamentals in the positive retail trends in April. The business demonstrated the capability to support a higher outlook. However, given the current level of uncertainty, we have decided to take a prudent and disciplined approach to the outlook given factors outside of our control, including uncertainty around the consumer driven by higher energy prices and ongoing geopolitical conflicts as well as the evolving tariff environment.
This year, we are expecting our financial results to return to historic seasonal patterns with the second and third quarters being our highest revenue and EPS quarters. Specifically, for the second quarter, we expect sales to grow year-over-year in the range of 5% to 7%, driven by utility and our plan to ship in line with retail. Adjusted EPS is expected to be between $0.70 and $0.80. While this assumes no change in current tariff policy, we expect a negative year-over-year impact from tariffs to be between $30 million and $35 million. We still expect the Indian motorcycle separation to be accretive by approximately $50 million to adjusted EBITDA, which is more weighted to the back half of the year and into January 2027 due to motorcycle sales seasonality.
Looking ahead, we remain on track with our tariff mitigation strategy to reduce China source material cost of goods sold from 14% last year to below 5% by the end of 2027. Based on current policy, we continue to expect total tariff costs of approximately $215 million this year, excluding potential refunds related to EPA tariffs paid in 2025 and into 2026. As a reminder, we paid approximately $125 million in IEP tariffs, and we intend to seek refunds for the full amount. The work we've done to realign the portfolio and implement lean across our plants is already driving operational gains and we expect that momentum to continue.
Combined with the strength of our product lineup, this positions Polaris in a renewed way, 1 that emphasizes dealer partnership, rider driven innovation, profitability and returns. We are more aligned, more focused and more disciplined than we have been in many years, and we are confident in the path ahead.
With that, I'll turn the call back over to Mike. Go ahead, Mike.
Thanks, Bob. Let me spend a moment on our clear vision to win because this really anchors how we're operating Polaris today. At the highest level, our ambition is unchanged to be the global leader in powersports that starts with a solid foundation built in our brands, our people and our culture and a disciplined focus on execution. There are a lot of distractions in the world right now, which makes it even more important to stay focused on what we can control and execute relentlessly against those priorities.
Operationally, we're seeing steady improvement inside our manufacturing facilities. The actions we've taken over the past several years around lean are increasingly showing up in cost performance, quality and delivery. And as volumes increase, we expect these efforts to continue to pay dividends. On innovation, I'd put our product portfolio up against any of our competitors. We continue to invest in new products that expand our reach, strengthen our premium position and drive differentiation across our portfolio.
From a working capital standpoint, we remain focused on driving efficiencies and executing the fundamentals to improve cash generation. We generated over $600 million of free cash flow last year and continuing to deliver strong cash generation remains a top priority. Dealer health is also critical. We continue to partner closely with our dealers to ensure they have the right product mix and the right inventory levels to meet customer demand. This balanced approach remains a clear strategic advantage at the dealership level. All of this supports a very clear vision to win.
We are here to deliver for our customers by providing the best innovation, quality and experience in the industry. In leaning into our innovation, we are strengthening and advancing our #1 market share position in powersports. And finally, we believe we're positioning Polaris for long-term financial growth with a model built on consistent cash generation, attractive returns and sustained value creation. The consistency of this strategy and the discipline of our execution gives us confidence in how we're navigating today's environment and building Polaris for the future. Our priorities for 2026 are unchanged from what I outlined 3 months ago.
We continue to expect a relatively flat retail environment, which is consistent with what we've seen so far this year. Utility remains the stronger growth component of the portfolio relative to recreation. We will continue to operate our facilities so that production shipments in retail remain aligned. And if demand shifts based on dealer feedback or data, we are prepared to flex production accordingly. We closed the Indian motorcycle separation earlier than expected and thus far, the separation has gone smoothly.
Our lean journey continues with additional lean lines coming online later this year. In total, we've achieved over $240 million in structural savings through this journey. We remain committed to executing our tariff mitigation strategy. we expect tariff policies to continue to change, including potential changes from the review of the USMCA trade agreement. While the ultimate outcome remains uncertain, our goal is clear. We remain committed to the U.S. with the largest powersports manufacturing footprint in the industry, supporting U.S. workers and suppliers. We are also well underway with our goal to reduce China source components to under 5% of material cost of goods sold by the end of 2027. We have a dedicated team in place. We're on track, and I'm confident we can achieve this goal.
So to wrap up, we're encouraged by the way the year has started. Our teams are executing incredibly well in a dynamic environment. Our product portfolio is strong, our dealers are healthy and our strategy is working. While there are factors outside of our control, we remain sharply focused on what we can control. We believe the actions we've taken to refocus Polaris are creating a strong foundation for the future by advancing our focus and leadership in powersports, localizing and strengthening our operating footprint and positioning Polaris to deliver higher earnings power and stronger returns over time.
We believe this positions Polaris well to navigate the near term and to create long-term shareholder value for stakeholders. We appreciate your continued support.
With that, I'll turn it over to Gary to open the line for questions.
[Operator Instructions] Our first question today is from Craig Kennison with Baird.
2. Question Answer
First, I just want to say to Peggy, it's been a pleasure working with you, and you will certainly be missed. But my tariff question is fairly multifaceted. So if you'll give me a second to ask it. Could you help us unpack your tariff exposure in guidance after the IEEPA ruling and including recent Section 232 changes. And to that end, I think regarding IEEPA, if I'm right, you have a $30 million tailwind in 2026 relative to 2025, and that is not in guidance. And then regarding Section 232 changes, could you help us what is expected as an impact in 2026 and break that down into the growth and the mitigated impact. Thanks for indulging the long question.
Well, I mean, it certainly is a complex topic, Craig. So let me I'm going to kind of take you through a few different aspects and then provide you a little bit more color around 232 because we've clearly gotten a lot of questions. As Bob mentioned, our tariff impact has stayed consistent with what we talked about at around $215 million. The math works this way. With the Supreme Court ruling that pulled the IEEPA tariffs off, but then the administration immediately put the 122 tariff in place at 10%, not the 15% that they talked about. Those changes yielded about a $40 million benefit to us.
Unfortunately, when the 232 changes were made, that effectively offset that. So to dispel some of the commentary that's been out there, we are not unaffected by 232. We are definitely affected by it. So number one.
Number two, the rules around 232 are pretty complex, and I'm not going to try and go through and pull all that apart. But safe to say, we do have a different product portfolio as well as a very different manufacturing footprint. We're not manufacturing everything down in Mexico. And obviously, as you know, we have manufacturing in Minnesota as well as in Alabama.
And then the third component I'd say, around 232 is we are a significant consumer of U.S. steel. And as you know, from the regulations, there are different tariff rates based on U.S. versus non-U.S. steel components. So in a nutshell, that's essentially where we're at. There's been some questions around, hey, how does this start to annualize into Obviously, tough to predict what's going to happen with tariff policy. But assuming the tariff regime that's in place at this moment, and assuming the same volumes that we would have, we would not expect tariffs to be greater than what we're experiencing this year.
And in fact, we're working hard, as I indicated in my prepared remarks, to pull down the amount of China source content that's coming into the U.S. that we're paying tariffs on with the goal of getting below the 5% of material cost of goods sold next year. And obviously, there's some timing differences with how things flow out of inventory. But we think, if anything, that gives us the opportunity to get in there and further mitigate that.
The last thing I would say is that, that excludes any funds from the refund. As Bob indicated, it's about $125 million. We are in the process of either going through or understanding the refund process that's unfolding and we'll be working hard to get that money that's rightfully ours to get back.
That's really helpful, Mike. So are you saying that the incremental impact of the Section 232 changes for 2026 should be around $40 million, which offsets the benefit you had from other issues. .
Correct. Yes. And as you stated in your question, Craig, we originally thought it was $30 million back in March as we've done the math, that's about 40%, and we hadn't changed our guidance to reflect that. and we're also not changing our guidance to reflect the 232 since they kind of net out.
And I think -- and I'm sure the question is going to come up around guidance, but I do think that's a prime example. I mean when we were at a conference in March. The question was, hey, with IEEPA coming off, there's an inherent benefit. Why are you not taking guidance up and it was for this very reason. I mean, we knew that the 232, we also know that 301 is under review, there's a common period coming up in May. USMCA is under review, that's going to start in July. There's been a comment period leading up to that. I mean there's just a tremendous amount of uncertainty around this. And so we're obviously being conservative in the way we're approaching things, but we think that's prudent given this environment.
The other thing, there's been a lot of discussion about inventory. And so let me talk a little bit about how these different tariffs work. So the when the EPA tariffs went away and the 122 came in, right, there's about a quarter lag on when we see that impact because we're bringing parts in about a quarter ahead of production. And so -- by the time it gets into a product and rolls through cost of goods sold, there's at least a quarter lag or more, whereas the 232s were announced, I think, on a Friday and went in effect effectively on Monday. .
And there's been some things written and talked about that, hey, we've got 100 days of dealer inventory. And so we're not seeing an impact for 100 days. That's not how it works. The 100 days of dealer inventory has already been recognized into revenue. We've sold that to the dealers, and it's being replenished every day. And certainly, like a lot of companies, we paused shipments for a short period of time as we dug in to understand the new rules and adjust our systems to be able to process all that but we started shipping relatively quickly after they were announced. So we're feeling the 232 impact almost immediately. So it's not a 100 day deferral because of the dealer inventory on 232.
The next question is from James Hardiman with Citi.
So there was a lot to digest on the tariff front. If that weren't complicated enough, and it's probably too early to have a great feel for this. But maybe initial thoughts on the competitive environment that, that now creates for 2026 and I don't know, 2027 is probably too far out to really get your arms around. But I think as we sit here today, you guys should now be benefiting on the cost side relative to, I think, your competitor up north, right, the Canadian competitor and then presumably your major Chinese competitor who also imports from Mexico think the Japanese are generally in a good place from this, but maybe walk us through how you're thinking about that if that impacts sort of your ability to price or your ability to gain share? Any initial thoughts on that front would be great.
Yes. Thanks, James. And yes, there's a lot there because there's a lot there. And this organization, unfortunately, has had to spend a tremendous amount of time on it, and I'm proud of the work they've done and the team we've got on top of it. Look, I don't want to get into commentary about our competitors and what they're dealing with from a cost perspective. What I can tell you, though, is that there's not a tremendous amount of price elasticity in this market. .
I'll remind you that there was significant price taken coming out of COVID when the supply chains and the massive amount of inflation that this country went through. And so the pricing had already been somewhat elevated through that process. And the consumer backdrop isn't incredibly strong the Utility segment, which obviously makes up the majority of our ORV business has remained strong.
But that doesn't mean there's an infinite level of price elasticity there. The REC side, whether that be the Marine or the razor portion of our business is incredibly sensitive to everything that's going on. As I mentioned in my prepared remarks, when we saw oil prices spike and that combined with what's going on overseas, we saw those customers pull back Utility remained strong during that time period, which was encouraging. But I just don't think there's a tremendous amount of elasticity in the marketplace. I mean, we'll obviously continue to look for that.
And quite frankly, our focus from a competitive standpoint is exactly what I went through in my script. It's the products. We have the best innovation in the market. We're moving fast. We're regaining our foothold. We've gained share for 4 quarters in a row in ORV and that's really going to be the focus that we have inside the organization and continue to be the push. I'm really excited about products that we're going to be launching this year and then the visibility we have out for the next several years. And regardless of the cost positioning, I think we're going to be in an incredible spot to continue to win.
Yes. One thing I would say, James, is everybody needs to keep in mind with tariffs. It's not that we're not impacted. I mean we've been dealing with this since 2018. And as Mike stated, when he started the answer to that question, we have a team that meets every day is highly focused on this. We've been executing our plans to mitigate tariffs. And so as we came into the 232 announcements, we're well versed in what our steel and aluminum content is by part and by product. And so we were able to get on top of that fairly quickly. It is incredibly complicated, and it's tough to figure out where it's going to go. But I don't think it's going to dramatically change the overall competitive dynamic given all the things Mike said about elasticity in the market.
Got it. That's really helpful. And then to the guidance, by my math, you'd be -- once we sort of factor in the earlier Indian close, you beat the first quarter by almost $0.50, obviously not flowing it through to the full year. And in the prepared remarks, you called out, I think, 2 items. One, just uncertainty around the consumer and two, the evolving tariff environment. I guess, as I sit here and listen to your other comments about how things sort of slowed down and then reaccelerated in April. That seems like maybe we're coming out of the other end in a better place. .
And then the tariff conversation, I guess maybe let me ask the question this way. Like if we don't see some sort of unforeseen downturn in the consumer from here, right, after April has gotten a little bit better. And if we don't see some incremental new tariffs beyond 232 that we're not even really thinking about at this point, does that scenario equate to upside relative to what you've laid out today? Or am I not thinking about that the right way?
No, I think you are. I mean, I think Bob and I tried to be pretty blunt in our comments that we were playing this conservative, prudent, whatever the words are that you want to choose. But I think, look, if the consumer backdrop continues playing out like it has. And if tariff policy, fingers crossed were to just stay where it is today. We would have certainly been looking at taking guidance up. And I think what I'd reinforce is the business is performing better than it ever has.
When you step back and you think about the fact that we've got dealer inventory aligned in an environment where things are fairly static, we actually grew revenue on an organic basis, 14% and I talked about our gross profit coming in at 20.5%. That's up year-over-year despite the tariff headwind. And if you pulled tariffs out, which I wish we could, we'd be at 23%. I mean that is a significant improvement, and I think reflective of the improvements we've made in our operational efficiencies, warranty, utilization of the factories gaining share for 4 quarters in a row and ORV cash flow performance despite the headwinds of the tariffs, strong safety performance in the business alignment with our dealers. We've rightsized this portfolio to really get focused on the most profitable.
I mean, James, we have this business in a really good spot. And I think the first quarter results really reflected that I would really like to see us get past the uncertainty on the tariffs because it's not just uncertainty for us to predict financially, but it is uncertainty from a consumer standpoint. I mean inflation is a big deal right now. And certainly, the conflict overseas is generating inflation from an energy perspective. But even outside of that, the consumer hasn't necessarily demonstrated significant strength. And so I think getting some certainty around tariff policy would certainly alleviate that pressure. And I think start to put the consumer in a better spot in terms of future interest rate expectations and things like that.
So I think the message for everyone is this business is performing better than it has in years. We're excited about that. And with some stability, we would certainly see this generating even more upside than we saw in the first quarter.
Yes. I mean if you look at the incrementals in the first quarter, with tariffs factored in, it was above 40% if you accounted for the tariff headwind has been over $70 million. So just really, really solid performance. And obviously, we benefited a really good strong mix in the quarter. We continue to see strength at the high end and the low end of the market with the middle kind of being the weakest part. But that high-end mix served us well in the quarter.
And obviously, we had some carryover price from price increases, normal price increases we took out in last year. But -- so the company is performing really, really well. To Mike's point, this is really just not having great visibility into what happens with the consumer given the ongoing conflicts around the world. And then what's going to happen with tariffs. We know the 122s have to -- they have to expire in July. I don't know that there's a way to extend them. And what we don't know is what, if anything, will come in after that. So that's the caution.
And Peggy, you will be missed. Good luck with the next chapter. .
Next question is from Joe Altobello with Raymond James. .
Just want to follow up on the tariff commentary, make sure I understood you right. So if we assume nothing changes, and I know that's a big assumption at this point. It sounds like at worst, tariffs are neutral and could potentially be a tailwind for '27.
Yes. The caveat to that is that we are still working the mitigation efforts that we talked about. And so flowing through the effect of getting our China-based spin down sub-5%. And how that stratifies into '27 obviously, is an unknown, but should be a net benefit. We continue the focus on the lobbying efforts that we've been pursuing to evaluate some sort of relief across the powersports industry. I think that's probably a more difficult task in this current environment with everything that's going on, but we have continued to press forward and we continue to have support from key constituents in places like Minnesota and Alabama. And then obviously, there's a lot of caveats to that, right?
Aside from tariff policy remaining consistent. It's also volumes and things like that. But I think from an annualization of the impacts and the fact that the IEEPA net of [ 122 ] favorability was almost essentially perfectly offset by the 232 impact coming in, that's effectively where we would be.
Yes. I think if you're thinking about next year, the $215 million we guided to this year, plus or minus a little, is probably a good place to start. To Mike's point, we'll have where we land on mitigations, which involves moving a lot of parts and a lot of timing that we won't know yet that continue to evolve through the year. But the timing -- while the timing was different with the EPA stuff happening in February and the 232 stuff happening in April because of the lag they sort of balance each other out, if you think about them on a full year run rate basis.
So we think that's where it will be, depending on whatever the administration decides to do with new tariffs and then obviously, all the things Mike talked about with volume and other things that we don't have visibility into for '27 yet.
Got it. Very helpful. And just a follow-up on that. I think, Bob, you mentioned earlier there was some spending that got pulled forward into the first quarter. Could you quantify that for us? And secondly, would you expect all of that to reverse in the second quarter? Or is it spread out throughout the year?
So it was kind of split evenly between profit share or incentive comp. And that's purely because the way we had originally had a forecast to lose money in Q1. And now we're obviously had the earnings we have. So we had to recognize more profit share in the quarter. And then the other stuff is really kind of just a myriad of corporate things that got pulled into the quarter. So all of it will turn around, and I think it will turn around relatively evenly through the course of the year.
And how much was it in the quarter, sorry, roughly? .
I'm sorry, it was about $30 million in the quarter. And I think we're still on our guidance for OpEx for the year. So we're not seeing anything that says we're going to spend over what we guided. It's just timing in the quarter. And like I said, it will turn around over the next 3, not all in Q2. .
The next question is from Noah Zatzkin with KeyBanc.
I guess maybe just 1 on the ORV gross margin coming in better than expected. Obviously, I think price mix and ops contributed there. Is there any way to quantify or frame the magnitude of the ops improvement that played a part there -- and then just how should we be thinking about the potential margin benefit of ops improvement looking through this year and then as you move into next year?
Yes. So if you think about it for the quarter, I would say the biggest driver was volume and mix. We said we had good mix. Next would be net price and then after that would be the plant performance. I think that the -- as you think about the year, the price will continue. We did our normal price increase. promo, we don't expect radical changes in promo. There'll be some seasonality of promo as we head into peak selling season. Obviously, Q1 is typically a light promo quarter plant performance, I think, will continue really kind of on pace. And so I think that will be an ongoing benefit.
The margin profile in Q1 was really, really good. and mix played a big piece of that. We had strong mix into sort of high-end utility vehicles. If the consumer demand stays, that mix will continue to look good. if we see a slowdown, obviously, that could change. So a little bit tough to predict right now. But as long as we don't see a drop off in volume, the factory performance that we saw in Q1 should continue really for the rest of the year.
Yes. No, it's something to keep in mind, we've been undershipping retail for the last couple of years. And now that we've got things more in line the volume recovery going through the factories, a matter of factory utilization is now getting up closer to 70%, still not at the optimal level, but much better than where it was last year. So when you couple that with the things that Bob talked about with mix, you couple that with the work we've done around lean. I mean, it puts us in a really good spot. And that's why when I talk about the future value creation of the company.
I mean, we're still in the early days. We've only effectively got on lean line at each of our factories, and we're in the process of expanding that this year. And this is going to be a multiyear journey, but we're looking at you sprinkle in a little bit more volume and the amount of efficiency and volume leverage. As Bob mentioned earlier to 1 of the other questions, it's exciting to see that come through and encouraging in terms of the amount of earnings leverage that we can get moving forward.
The other thing to keep in mind, which doesn't jump out just as you look at the puts and takes in the guidance, and it's staying where it is, is commodities, we went into the year thinking commodities were going to be about a $20 million headwind. We think it will be double that, maybe a little more now. And primarily driven by steel and diesel and diesel really is a proxy for both diesel in the transportation side and resins in the production side. And we're forecasting to overcome that with our operational efficiencies inside of our guidance but that will be a little bit of an offset because that's a headwind, I think, across most industries right now. .
And maybe just 1 kind of housekeeping question. I think there was a $22.5 million adjustment related to distressed supplier. Just kind of any color there would be helpful.
Yes. So we had one of our suppliers was part of the first brands bankruptcy. And so we made payments during the course of the evolution of the bankruptcy to help get inventory and keep inventory flowing. And then we partnered with several other customers of the supplier to help facilitate that company being sold and approved by the bankruptcy court to be sold to another industry participant. And so that $22 million is us taking through period costs, the support payments we made to facilitate that transition. It would have been a tough supplier to transition, and we would have lost a lot of margin if we had lost supply.
So -- and I think that was true for sort of all of the participants in the industry. And so we all had to step up to sort of rescue the supplier and get it out of the first brands bankruptcy, which we were able to do and it's performing well now, and I think we've moved on from it. So just a 1 period -- 1 quarter impact from that.
No, I would say it just demonstrates the fact that we are the leader in powersports. We saw this supplier struggling well before that bankruptcy. We had been working with them closely. And so we were able to effectively take charge of the process and guide it to another supplier so that we could ensure continuity, not just for us, but many others in the industry.
And again, I would just point to this team. and the culture that we have, the focus around execution and relentlessly pursuing everything we can to ensure we execute and deliver for the customer. And I think this is a prime example of the team doing that. I'm really proud of what they accomplished.
The next question is from David MacGregor with Longbow.
You mentioned the RANGER 500 performing well. I just wanted to get your thoughts, Mike, on how you're thinking about the opportunity in developing product line extensions and Utility and other categories just down into lower price points.
Yes. I mean, look, it's something that we've actually been focused on for quite a while. Obviously, Indian is not part of the portfolio, but it was something that we focused on there in terms of trying to get a sub-$10,000 entry point for the Scout lineup. It's something we're focused on, not just in the RANGER product category. I would say it's a gap that we have within the ATV lineup. And the reality is we're not going to overpivot down into the value segment. But as the industry evolved over the last decade, 1.5 decades. So has the price point.
The vehicles become larger, more capable, more sophisticated, more options. And I think we and many others kind of rush to the high end of the category, and we ended up leaving a gap at the lower end. And when we looked at the price points, we look at the size of the consumer group and then we also studied entry points for consumers, whether that's coming in at a value RANGER or coming in on our ATV lineup, we know that a significant portion of those customers end up trading up as well as expanding. So for example, someone coming into ATVs, eventually a good portion of those folks are going to go into the side-by-side category.
And the nice part about that is they're not just buying side-by-side, so they keep buying ATVs. And so we've really taken a very customer-centric view. I wouldn't sit here and tell you that we're going to overexpand into the value segment. We just think it's an important price point to have. I think even what you saw us do with the RANGER 1000 cab and the RANGER XP cab providing lower price points that give people features that they're looking for, but obviously don't dilute what we have at the high end where you get far more features and higher-performing vehicles, but allowing people to experience some of the things that they want to at a price point that's a little bit more attractive than where they'd have to go to today.
And so I think it's an important aspect of the business and making sure that we have a broad and diverse portfolio. And then obviously, that complements everything we do to continue to look for extensions outside of the core portfolio, like we did with Polaris XPEDITION where we have significant market share and really don't have any competition in that adventure space and an area where we can continue to find derivative vehicles and expand.
Great. Great color. Just as a follow-up. I guess I wanted to focus on the REC segment. And if you think about REC, as you look at the various moving parts in that category, obviously, there's higher rates and weak consumer confidence and those would certainly be cyclical factors. But what are you seeing that you might characterize as structural change in REC that would impact that business going forward?
Yes. I don't -- I think the only structural change is there were a few different dynamics that happened. I think you had a little bit of a pull forward or acceleration during COVID. People went out and bought a lot of stuff. And then you went through a brief period probably 1 year, 1.5 years, where people stopped using vehicles. And I think a lot of that was as folks are being called back to the office. There was a rebalancing of what they were doing in their off time. But for the last couple of years, we've seen strength in vehicle usage. We've talked about it a number of times on the call.
We track everything from the number of miles that come in, the repair activity, spare parts volume, tire consumption, oil consumption, everything that we look at on a monthly basis continues to point to usage of the vehicle, where we have the ability to track ridership through RIDE COMMAND, we can see that the miles written has increased. So we know people are using the vehicle. I think what's happened is we've had a bit of a delay in the replenishment repurchase cycle. What I will tell you is that when we see those brief moments of stability, either encouraging interest rate moves or inflation starting to tick down we see the REC customers starting to come back in.
We're not seeing huge movement, but we're seeing not negative from a retail standpoint. And so from my standpoint, I think its folks are waiting for the moment to come back in. We know that they want to. There's been so much innovation since they last purchased a vehicle, and we know they're dealing with extended repurchase intervals. And when you couple that with the fact that they're using the vehicles, they're going to come back in. So I don't know that we see a permanent structural. I think we've just got a lot that happened over the last several years. And then right now, I think these consumers, because it's a want vehicle, not a need, they're waiting for some stability in the backdrop, whether that's macro, geopolitical inflation, energy costs, you name it. I think a little bit of stability will go a long way to at least stabilize that market and get it back to a little bit of growth.
The next question is from Tristan Thomas-Martin with BMO.
Just 1 quick tariff qualification question. The $40 million headwind from the [ Jansen ] 232, is that a gross figure or a net figure?
It's net figure.
Yes. I mean we don't have any mitigations -- we're not -- this is they've been in place for 2 weeks. So there's not net of mitigation.
Yes. And there's -- I mean, we're not going to get into the detail by product and all that kind of stuff. But I mean, when I make comments like we were a heavy consumer of U.S. steel, I think you can interpret that, that means we're probably at the lower tariff rate. But there really isn't a whole lot you can do. I mean, yes, could we shift manufacturing? I'd tell you, we are not in a stable enough environment from a policy decision that I'm going to go do anything significant, pulling something out of Mexico and putting it in the U.S. and then subject it to a different set of tariffs. .
And we know the 301 regime is under review. We know USMCA is under review. So at this point, we're just focused on broader mitigation efforts, the things I articulated earlier, whether that's the China spend content reduction as well as the lobbying efforts that are underway. And aside from that, we're going to go focus on all the other elements that we can drive efficiencies inside of the company. And I think you saw when we focus what came through in the first quarter.
Yes. Just to clarify, Tristan, I couldn't tell if you said 30% or 40%, it's 40% effectively offset by 40% from the IEEPA 122 switch. And then the only other thing I would point out, I would never say that we would benefit from the difficult market in recreational products, but as you folks know, as Utility has done well, our primary plan for Utility is -- and we also make a much of ATVs up in ROS. So that's that the mix has certainly benefited us more towards our U.S. footprint. .
Okay. That makes sense. And then just reason a little more. Just on -- given the new segments, anything you wanted to flag in kind of a margin standpoint, whether it's seasonality or incrementals or anything else we should be thinking about?
Yes. So I think as we pointed out, we are returning to normal seasonality here in -- we think in 2026. So you'll see obviously, Q1, typically our smallest revenue quarter to Q2, Q3 will be larger. Q4, you should think that it's going to look fairly similar to Q1. again, mix is going to play a big part in this. mix was really strong in Q1. We'll just have to see what retail looks like and how that drives mix in Q2 and Q3. But otherwise, it's just be normal seasonality.
And I think the only other thing would be just as we get through the second quarter, then your tariff year-over-year starts to become far less noise because it ramped it was very small in Q1 built in Q2 and then we were kind of at run rate Q3, Q4. So...
Yes, we'll still have tariff -- pretty good tariff headwinds in Q2 relative to 2025, the tariffs didn't -- they started in April, but by the time you sort of got them in and they went through inventory, they didn't really hit until Q3, I think we only had about $10 million of tariff in Q2 last year. So it will be more similar to Q1 this year. .
Next question is from Gerrick Johnson with Seaport.
Just wanted to talk about TSAs real quick. I know they're neutral to your earnings but how did they affect the various buckets in the first quarter?
Yes. So it is complicated, but you basically had about $25 million of that flowed through revenue, and that's us really selling engines and some limited motorcycles that we finished up in Q1 to India. That came at a negative that was recovered in other income. And then there's about another $5 million in OpEx, which has also recovered in other income. So think about it as $25 million in revenue at a little bit of negative GP, $5 million to $6 million in OpEx, that plus a little bit of margin all recovered in other income. So not really significant, but a little bit slightly a bit better than breakeven, but just a geography issue. .
Okay. Great. That's helpful. And finally for me, the impact of youth ORV in the quarter, honestly found it a little odd since youth is mainly sold in the fourth quarter. So how did that impact your ORV retail inventories? What would ORV have been without youth or with youth?
It wasn't -- the impact wasn't dramatic. I mean it's -- the issue with youth is we continue -- we had to move it out of China. We moved into Mexico. We're just starting to ship the RANGER 150. We haven't been shipping those. It wouldn't have changed retail a whole lot in terms of actual percentages, and it certainly would have impacted margins. .
This concludes our question-and-answer session, and the conference has also now concluded. Thank you for attending today's presentation. You may now disconnect.
Polaris Industries Inc. — Q1 2026 Earnings Call
Polaris Industries Inc. — Q1 2026 Earnings Call
Polaris posts a strong Q1 with margin gains and tariff mitigation underway.
📊 Quarter at a Glance
- Revenue: +8% YoY; organic growth +14% excluding Indian Motorcycle.
- EPS: Adjusted EPS $0.13; EPS excluding Indian Motorcycle would have been $0.26.
- Margins: Gross margin +389 bps; Adjusted EBITDA margin +277 bps.
- Tariffs: ~240 bps headwind; 2026 tariff costs about $215M; IEEPA tailwind offset by 232; plan to reduce China content to <5% of COGS by end-2027.
- Retail & inventory: North American ORV retail +3% with share gains; Snowmobiles up strong in season; dealer inventory healthy; snowmobile inventory down >50% vs a year ago.
🎯 What Management Says
- Strategy: Stay the global powersports leader with lean operations, product leadership, dealer partnerships, and disciplined capital deployment to lift earnings power.
- Tariffs & portfolio: Ongoing tariff mitigation; reduce China-sourced content to below 5% of COGS by 2027; Indian separation completed smoothly; pricing and mix support margins.
- Finance & priorities: Focus on cash generation, debt reduction, and shareholder returns while investing in profitable growth.
🔭 Outlook & Guidance
- Q2 view: Sales +5%–7% YoY; Adjusted EPS $0.70–$0.80; tariff headwind about $30–$35M; Indian separation accretive to adjusted EBITDA by ~\$50M later in 2026.
- Tariffs & policy: Guidance unchanged amid policy uncertainty; second/third quarters expected to be strongest; lean manufacturing supports margin.
- Longer-term: End-2027 target to cut China content to <5% of COGS; continued lean initiatives and domestic manufacturing focus; demand stability assumed.
❓ Analyst Q&A
- Tariffs & guidance: Tariff impact ~\$40M net headwind from 232; IEEPA tailwind offset; guidance kept unchanged given policy uncertainty; refunds of EPA tariffs being pursued.
- Margins & inventory: Margin gains driven by mix, pricing, and lean; inventory improving; volume-driven leverage expected to continue if demand remains steady.
- One-time items: About \$30M of OpEx timing pulled into Q1; \$22M related to distressed supplier payments; net effect one-time and not indicative of full-year trajectory.
⚡ Bottom Line
Polaris starts 2026 on a stronger footing with margin expansion and disciplined execution, even as tariff policy remains a key uncertainty. The company maintains its strategic focus on lean operations, product leadership, and cash generation to fuel higher earnings and shareholder value.
Polaris Industries Inc. — Q4 2025 Earnings Call
1. Management Discussion
Good day, and welcome to the Polaris Fourth Quarter 2025 Earnings Call and Webcast. [Operator Instructions] Please note this event is being recorded.
I would now like to turn the conference over to J.C. Weigelt. Please go ahead.
Thank you, Betsy, and good morning or good afternoon, everyone. I'm J.C. Weigelt, Vice President of Investor Relations at Polaris. Thank you for joining us for our 2025 fourth quarter and full year earnings call. We will reference a slide presentation today, which is accessible on our website at ir.polaris.com.
Joining me on the call today are Mike Speetzen, our Chief Executive Officer; and Bob Mack, our Chief Financial Officer. Both have prepared remarks summarizing our 2025 fourth quarter and full year results as well as our expectations for 2025. And then we'll take your questions.
During the call, we will be discussing various topics, which should be considered forward-looking for the purpose of the Private Securities Litigation Reform Act of 1995. Actual results could differ materially from those projections in the forward-looking statements. You can refer to our 2024 10-K and other filings with the SEC for additional details regarding risks and uncertainties. All references to 2025 fourth quarter and full year actual results and future period guidance are for our continuing operations and are reported on an adjusted non-GAAP basis unless otherwise noted. Please refer to our Reg G reconciliation schedules at the end of the presentation for the GAAP to non-GAAP adjustments.
Now I will turn it over to Mike Speetzen. Go ahead, Mike.
Thanks, J.C. Good morning, everyone, and thank you for joining us today. I'd like to start by acknowledging the resiliency of our Polaris team and the discipline of our strategy. These are qualities that transformed a challenging year and one that truly reflects the strength and resolve of our business. While tariffs represented the most significant challenge we have seen since the pandemic, we delivered nearly everything we said we would do and then some. We navigated difficult headwinds in 2025 while still delivering share gains, innovation, quality and operational improvements, portfolio realignments and strategic milestones that position us for the long-term success.
We achieved share gains in all segments last year, including Off-Road vehicles, snowmobiles, pontoons and motorcycles. That reflects both our commitment to innovation and the strength of our dealer partnerships. In ORV, we launched several new products from the RZR XP S to the all-new value tier RANGER 500. We also launched the industry's largest touchscreen in the new RZR Pro R, and our factory racing team had an impressive year of top podium finishes. In fact, earlier this month, our Polaris factory racing team proved once again what our vehicles and drivers are capable of, standing at the top of the DAGOR podium for the third consecutive year, a truly amazing and incredible achievement.
In Marine, we refreshed our flagship Bennington QX line and the all-new Godfrey Sanpan models earned Boating Magazine's Pontoon of the Year. Last few years of product launches across our business have demonstrated our commitment to innovation and further solidified our leadership in powersports and our future product innovation pipeline remains full.
Next, we made progress in executing against our decision to significantly reduce our exposure to China. We set a goal of lowering China-based spend by 80% from roughly 18% of material cost of goods sold in 2024 to below 5% by year-end 2027. This transformation has three key benefits: it lowers tariff expense under the current policies; minimizes the risk associated with dramatic swings in regulatory policy; and creates a more localized supply chain with improved working capital and faster response times. We ended 2025 with China-based spend of approximately 14% of material cost of goods sold and are on track to drive our exposure down even further in 2026.
Operationally, we delivered more than $60 million in savings as our manufacturing transformation continues. We're seeing the impact in areas like improved clean build, lower levels of rework, improved labor efficiency and reduced inventory. I'm incredibly proud of our operations team for everything they've done to get us to this point. The team and I visited our Monterrey plant earlier this month, and it is truly impressive to see how the plant is operating now compared to just 2 years ago. The improvements across our plant network positions us well as the industry normalizes.
Quality has also meaningfully improved. We take exceptional pride in our product quality, and we've invested heavily in our quality systems to ensure we meet and exceed the expectations our customers have come to expect for our industry-leading products. We've seen improvements in key aspects of manufacturing, supply and design quality that have resulted in a reduction of $25 million in warranty expense last year. And initial model year '26 metrics have improved versus last year and dealer feedback is encouraging.
Finally, we made progress on our longer-term strategy to improve profitability while maintaining leadership in the powersports industry. The separation of Indian Motorcycle remains on track to close by the end of this quarter, and we will be immediately accretive -- and will be immediately accretive to EBITDA margins and adjusted EPS. As I've said many times, when we stay focused on what we can control, our teams deliver. Our people and our strategy have consistently proven that Polaris is well positioned to meet its mid-cycle targets and maintain leadership throughout innovation and strong dealer partnerships.
In Q4, sales were up 9% and North American retail was also up 9%, excluding youth, driving share gains across our main segments. We continue to emphasize retail excluding youth for two reasons. First, while youth contributes to share in retail figures, it has very little impact on profitability. Second, we're in the final stages of transitioning our youth manufacturing from China to Mexico to reduce our long-term tariff exposure. That shift temporarily impacted both retail and share this quarter simply because dealers didn't have the inventory to meet demand. We expect this to reverse in 2026. Moving forward, we believe excluding youth, retail remains the best indicator of the health of the business.
As expected, we couldn't overcome $37 million of tariff cost and adjusted gross margin in the quarter. However, we did see a meaningful mix benefit in ORV driven by higher RANGER NorthStar shipments tied to strong demand for our agriculture and ranch promotional programs. Adjusted EBITDA saw additional pressure in the final quarter as a result of incentive compensation normalization. We accelerated R&D activity in support of key programs, which increased expense in the quarter. All in, this resulted in adjusted EPS of approximately $0.08, slightly ahead of the implied Q4 guidance we provided in October.
Stepping back, while 2025 was a challenging year, our team did an outstanding job of remaining focused on what we could control. I think it's important to note that if you adjusted out the tariff impact, which was unknown when we provided guidance in January of 2025, we expect we would have exceeded the original guidance.
Turning to what we're seeing at the dealerships. ORV retail continues to trend positively, led by utility. Strength in utility, the utility category was across the board and with strong contributions from the value to premium models. Our data shows that the new RANGER 500 was the highest retailing midsized side-by-side in the industry during the quarter, and it wasn't even close with roughly 60% more volume than the nearest competitor. On the premium side, our RANGER XP 1000 NorthStar had its highest retail month ever in December. The success across the lineup demonstrates the strength of our brand and product portfolio. And while recreational consumers remain somewhat on the sidelines, we continue to take multiple points of share in crossover powered by the category-defining Polaris XPEDITION.
On-Road retail was down low double digits as expected as we lap the 2024 introduction of the new Indian Scout motorcycle. In Marine, retail declined approximately 13%, though our pontoon brands, Bennington and Godfrey outperformed the industry. For snowmobiles, the season started strong; thanks to early snowfall in the flatlands, something we haven't seen in the prior 2 years, which helped reduce noncurrent dealer inventory. However, the industry has moderated a bit due to lack of mountain snowfall and lighter coverage in parts of the Midwest in recent weeks. We remain cautious on the remainder of the season and plan to keep our snowmobile build schedule lower as we prepare for the 2026, 2027 season, similar to our approach last year.
As we noted last quarter, we believe dealer inventory is at a healthy level with just under 100 days of inventory on hand across the network. Not only is dealer inventory at the lowest levels it's been outside of the pandemic, but the mix of inventory is in great shape as well. We believe Polaris has the healthiest mix of current versus noncurrent inventory of any OEM. With ORV and Marine inventory in good shape, we're continuing to let retail drive our build and ship plans. This is exactly where we want to be and a place we haven't consistently been since before the pandemic. It aligns with how we manage the business, and we believe is also best for dealers in this demand environment. Our teams will remain agile, and we will closely monitor retail trends. We will adjust build and ship schedules in response to market conditions to help ensure dealers have what they need to be successful.
I'm now going to turn it over to Bob to provide you with more details on the financials. Bob?
Thanks, Mike, and good morning or good afternoon to everyone joining us today. Let's start with fourth quarter financial results. Adjusted sales for the quarter were up 9%. Similar to Q3, we saw higher shipments year-over-year with a notably stronger mix toward RANGER NorthStar side-by-sides. Net pricing was a modest headwind as elevated promotions continued to outpace price. International sales grew 9% with all regions contributing, driven by double-digit growth in PG&A and On-Road. Globally, PG&A sales were up 20%, supported by strength in factory installed accessories and oil. Our ridership indicators, average miles per unit in dealer repair orders continue to trend positively, which aligns with the growth we're seeing in oil revenue.
Mix and volume were once again positive contributors to gross profits. However, those benefits were more than offset by $37 million in new tariffs and the normalization of incentive compensation relative to last year's unusually low level. Given these headwinds, adjusted EBITDA margin contracted year-over-year as expected. The primary drivers were the impact of tariffs on gross profit and incentive compensation flowing through both gross profit and operating expense. As Mike mentioned, we also incurred higher R&D costs in the quarter as we support work on our innovation pipeline.
Stepping back, after backing out the impact of tariffs, our full year 2025 results would have exceeded the expectations we set last January. That's a testament to strong execution and controlling what we can control in an extremely dynamic environment. Off-Road sales rose 11% in the quarter, supported by higher ORV shipments, a richer mix of vehicles and 22% PG&A growth. Dealer inventory was down 9%, excluding youth and ORV and more than 40% in snow. While we still have some work to do in snow, the volume of noncurrent sleds sold in Q4 should help ease some of the challenges from the last two poor snow seasons in the flatlands. As Mike noted, dealer inventory overall is in a strong position across all metrics, including days sales on hand, current versus noncurrent mix and the split between utility and recreation products.
We gained modest ORV share in the quarter, excluding youth and multiple points in snow. Within ORV, utility and crossover remain our strongest categories, led by RANGER and Polaris XPEDITION. Without tariffs, gross profit margin would have improved, supported by a richer shipment mix aligned to retail and continued operational improvements across our plants.
Moving to On-Road. Sales during the quarter were up 4%, driven by positive mix within Aixam and Goupil, overcoming softness in Indian Motorcycle and our Slingshot business. Adjusted gross profit margin was up 186 basis points, driven by mix with a modest offset from tariffs.
Marine sales rose 1%. For Q4, the key indicator is next season order book strength, and we saw exactly that. Demand increased for our entry-level Bennington models as well as our redesigned flagship Bennington QX pontoon lineup. Thanks to our dealer inventory actions over the past 18 months, we believe Marine inventory is now aligned with demand, and we expect shipments in 2026 to be more closely aligned with retail. December SSI data showed the market -- showed market share gains across our pontoon brands. The broader industry continues to face pressure from higher interest rates and macro uncertainty, but our positioning remains strong. Gross margin declined due to mix, partially offset by positive net pricing.
Moving to our financial position. We generated approximately $180 million in operating cash flow this quarter, translating into $120 million of free cash flow. For the year, we generated $605 million of free cash flow. Our progress on working capital in 2025 is important to highlight. We reduced finished goods supported by clean build, lean initiatives, improved forecasting tools that allow for more predictable build schedules and stronger-than-planned retail. We believe these working capital levels are sustainable with further opportunity on the raw material and payable sides.
We remain committed to maintaining investment-grade metrics. We ended the year well below our covenant threshold due to strong cash generation and about $530 million of debt paydown in 2025. For 2026, we expect our leverage and interest coverage ratios to remain within covenant requirements even with the higher tariffs in the first half. Our capital allocation remains balanced between core growth investments with attractive returns and debt reduction, and we remain firmly committed to the dividend and our dividend aristocrat status as we just completed our 30th consecutive year of dividend increases.
Today, we are introducing our full year 2026 guidance. There are two important assumptions. One, that the Indian Motorcycle separation closes by the end of this quarter. Annualized, the benefit is about $1 of adjusted EPS. But with the closing expected to occur near the end of the first quarter, the 2026 benefit is expected to be between $0.75 and $0.80, with the balance of EPS savings to equate to the annualized dollar being attributed to the Indian Motorcycle Q1 loss under our ownership. And two, that there are no changes to regulatory policy, including tariffs relative to the policies in place today.
With those assumptions, we expect total company sales to grow 1% to 3%. This incorporates a more challenging year-over-year comparison due to more than $300 million from Indian Motorcycle sales that were included in last year's second, third and fourth quarters, but will not recur in 2026. That tougher comparable is offset by over $400 million of tailwinds from aligning shipments in retail. In addition, we expect a net pricing benefit to offset negative mix. The net pricing benefit is due to normal model year price increases and a lower promotional environment. If you were to remove Indian Motorcycle sales from our 2025 and expected 2026 results, this guidance would equate to 7% to 9% organic sales growth.
We expect adjusted EBITDA margin to expand 80 basis points to 120 basis points year-over-year, driven by the aforementioned volume benefit and lean improvement initiatives across our facilities, while being partially offset by approximately $90 million in incremental tariffs. Other big pieces -- moving pieces impacting the year include the adjusted EBITDA benefit of 3 quarters without Indian Motorcycle, over $30 million of absorption benefit from operational efficiency improvements, operating expenses are expected to be down approximately 4% due to the separation of the Indian Motorcycle. We are also planning for modest increases in strategic investment across IT and innovation, and there should not be any material change in year-over-year compensation expense following normalization in 2025.
In other income, we expect $30 million to $35 million of income due to transition service agreements, or TSAs, that will be put in place to help ensure the smooth separation of the Indian Motorcycle into an independent company. Some examples of TSAs that are expected to be in place are for IT systems, supply agreements and freight. These TSAs are in place to neutralize the costs we are incurring within cost of sales and operating expenses to help stand up Indian Motorcycle independently with the majority of the agreements expected to expire in 9 to 12 months.
Putting this all together, we expect adjusted EPS of $1.50 to $1.60 for 2026. This includes a modest benefit from FX and interest expense. For Q1 specifically, Indian Motorcycle is expected to be included in our results for a significant portion of the quarter. Sales are expected to grow more than 10%. Tariffs will represent a significant headwind of approximately $45 million. Adjusted EPS is expected to be approximately negative $0.45.
In summary, Q4 played out largely as expected. Excluding the impact of tariffs, we exceeded what we said we would do in 2025, including share gains and healthier dealer inventory. Operationally, we gained efficiencies within our manufacturing facilities, generated $741 million in operating cash and paid off approximately $530 million in debt. Much of this was overlooked in such a dynamic macro environment last year. But as Mike said, it's good to close the book on 2025. It was a uniquely challenging year, but I'm incredibly proud of how our team executed, stayed focused and delivered against our long-term objectives.
We entered 2026 playing offense. We expect this year to reflect the start of what is to come as we continue to execute on our longer-term initiatives of mid-single-digit sales growth, mid to high teens EBITDA margin, double-digit EPS growth and mid-20s ROIC. I look forward to sharing our progress with you as we move into the spring and throughout the year.
With that, I will turn the call back over to Mike to wrap up. Go ahead, Mike.
Thanks, Bob. We've been clear and consistent about our strategy over the past several years, strengthen our global leadership in powersports while improving the profitability and returns of the business. Our strategy is designed not just to make us more profitable, but to make us more resilient across cycles. So as Polaris succeeds, our dealers succeed and our customers continue to enjoy the best products in the industry.
A major part of our strategy has been delivering the best customer experience and rider-driven innovation through our portfolio of iconic brands. With our recent share gains and the success of products like RZR Pro R, Polaris XPEDITION and the RANGER 500 and XD platforms, we firmly reestablished ourselves as the innovation leader in powersports, and we're not slowing down. We have a strong pipeline of new products scheduled to launch over the next several years.
We've also brought you along on our journey to strengthen our operations. With new leadership in place, we've removed more than $240 million in structural costs from our plants over the last 2 years. From procurement through final shipment, we've embraced lean across our factories and the benefits are clear. While the full impact of this work has not yet been realized, even with a modest uptick in production in 2026, we expect over $30 million in absorption benefit, demonstrating the operating leverage we are building into our network.
Last year, we operated our Monterrey and Huntsville plants at roughly 60% capacity. As the industry normalizes and with the infrastructure and lean discipline we now have in place, we believe we can support a substantial improvement in industry volumes with minimal fixed cost investment while maintaining our quality standards. Another important part of our resiliency is the strength of our dealer network with approximately 2,000 of the best Off-Road and Marine dealers across North America, coupled with our close relationships, leading products, integrated programs and appropriately sized inventory, both Polaris and our dealers are well positioned to benefit when demand improves.
It's also important to acknowledge the work we've done to sharpen our focus. Over the past few years, we've strategically pivoted our business towards a more profitable and focused core with the sale of businesses such as TAP, Jim, Taylor-Dunn as well as the soon-to-be completed separation of Indian Motorcycle. We also realigned the organization in 2024 with the goal of reducing complexity and improving decision-making speed. I've been with Polaris over 10 years, and I've never seen the organization more focused and energized than it is today. We're focused on the important elements to ensure we remain #1 and to meaningfully improve profitability of our business model. Looking back, we've made tremendous progress, which I'm proud of, but what excites me most is what lies ahead as we continue to lead the powersports industry.
Let me close with this. 2025 was a challenging and unique year with a regulatory environment that shifted constantly, and the consumer remains pressured by higher interest rates, lower confidence and macro uncertainty. Despite all that, Polaris executed incredibly well. Dealer inventory is rightsized. We delivered innovative new products on time, and we continue to improve our operations and quality. This is exactly what we set out to do and the best team in powersports delivered. And lastly, we made the difficult decision to separate Indian Motorcycle, a move that we believe is best for Polaris and Indian Motorcycle.
As we enter 2026, our priorities are clear. We are prepared to manage through a flattish retail environment. Like the last few years, we expect utility growth to offset ongoing pressure in recreation. Dealer inventory is healthy, and we expect to operate our facilities so that build, shipments and retail all align. If we see any shift in demand through dealer feedback or data, we are ready to adapt production accordingly. With the expected closing of the Indian Motorcycle separation later this quarter, we've allocated the right resources to support the transition and help set the business up for long-term success.
Our lean journey continues as well. With additional lean lines coming online this year, we will further strengthen our operations and improve our ability to make fast, informed decisions as demand changes in real time. Finally, we remain committed to executing our tariff mitigation strategy. Our goal is to reduce our reliance on China-sourced components to less than 5% of material cost of goods sold by year-end 2027. We have a dedicated team in place, and I'm confident we can achieve this goal. We're entering 2026 from a position of strength. Internally, we are aligned on the priorities that can drive another successful year as we sustain our leadership in powersports and deliver on our long-term goals of higher sales growth, greater earnings power and stronger returns.
We appreciate your continued support. And with that, I'll turn it over to Betsy to open the line for questions.
[Operator Instructions] The first question today comes from Joe Altobello Joe with Raymond James.
2. Question Answer
I guess first question for you, Bob. I think you just mentioned that the revenue lift in '26 from wholesale and retail being aligned is north of $400 million. I think that number was around $300 million last quarter. So did something change? Or is that just more visibility there? And should we assume some sort of flow-through of around 25% on that number?
Yes, Joe. Yes, so the number did increase from where we thought it would be last quarter because we had a really strong Q4. And although we expect retail to be relatively flat, you're obviously off of a bit of a higher base. And as you think about the flow-through, right, it's -- the math gets complicated because you've got to look at it sort of ex tariffs. But if you took the tariffs out, and we've got about $20 million of commodities headwind. So if you sort of added back the impact of $90-ish million of incremental tariffs and $20 million of commodities, the flow-through would actually be closer to 40%, which I really think shows how much progress we've made in our plants over the last couple of years. As Mike said in his prepared remarks, we were down in Mexico a week or 2 ago, and it was really heartwarming to see how great those plants are running right now.
Yes, Joe. I mean, I want to stress that 40% incremental. I've worked in industrial companies pretty much my whole career, and that's not a number that happens easily. And I think when you look at our operations, we effectively have one lean line at each factory. And that doesn't mean that we're not getting lean benefits in other parts of the factory, but we are still early in the journey. Our first pass yield in terms of getting product through the line cleanly is still -- it's much better than it has been historically, but we've still got significant improvements sitting in front of us. And while our quality has improved and a 20% reduction in cost is nothing to blink an eye at, I'm still not happy with where we stand, and I think there's a lot more that we can do.
So I think the opportunity in front of us, it's frustrating because a lot of it gets blurred by the massive tariff load that we've got in the business. The good news is we've got an incredible team focused on moving us away from high-tariff countries. That doesn't mean that all the cost comes out of the system because you're likely not moving to someone who's priced at the same level as a supplier out of Asia, but the team can then start working value engineering projects and really put us in a good position over the long term to get our margins up into that mid- to high-teen EBITDA range.
Got it. Very helpful. Maybe just a follow-up. You've given us a lot of building blocks for '26, but it does seem like your guidance implies some level of cost saves. I know you mentioned $30 million of absorption, for example. Is there anything beyond the $30 million that's built into that guidance?
In terms of the cost takeout, obviously, the math with Indian starts to get relatively complicated with it coming out in the first quarter. But ex Indian, we're expecting GP to be down slightly. And a lot of that is driven by the accounting for the TSAs. And I know that's kind of been confusing to everybody. But the way these things are accounted for under GAAP, there's about $90 million that will flow through COGS and about $20 million that will go through ops or $15 million that will go through OpEx. And we'll recover that in different lines. So we'll get about $50 million of it in sales, about $10 million of it in COGS and about $35 million in other income. And really, what flows through other income are things like if we're billing them for providing IT services or even freight sometimes because it's co-mingled the way the GAAP rules work, it has to go through other income.
So that's kind of about a 30 bps headwind to our GP ex Indian. But that stuff will all fall off through the course of the year and going into '27 should be relatively clean. It's not like those costs will not -- the recoveries won't continue and the costs won't continue. So there's not really a go-forward impact there, but it will sort of distort GPs in '26. And -- but if you think about the fact that what we've got for incremental tariffs, nearly $90 million ex Indian, $100 million as reported with Indian in Q1, plus we talked about $20 million of commodities inflation that we see right now, being able to offset that and effectively being flat, I think, is actually better performance than it looks like on paper.
Yes. I think, Joe, on the TSA front, we didn't have them to the extent that we do with Indian with some of the prior divestitures because those businesses were really somewhat self-contained. Indian was so incredibly embedded, and the teams have done significant work to extract as best we can. The management team will be leaving the facility. They've got a new facility. We've cordoned off engineers. But the reality is to get it done right, we want to make sure the business is set up. So we've got a variety of these things that span largely 6 to 12 months and a really skilled team that's helping manage that. And our #1 priority is we want to make sure that there's minimal disruption as the business comes out and that it's set up in a way that it can sustain and continue to grow.
The next question comes from Craig Kennison with Baird.
So Bob, in a year when you needed to generate cash, you generated quite a bit. On Slide 30, it shows adjusted free cash flow over $600 million. I'm wondering what your thoughts are on 2026 free cash flow? And maybe if you could shed some light on working capital and CapEx expectations.
Yes. So obviously, a ton of progress on working capital in 2025. I think for '26, we're going to have some kind of competing issues. Finished goods will probably go up a little just because revenue is going up and shipments are going up. We're going to look to try to hold raw flat to down and then continue to make some progress on payables to drive working capital a little bit lower. I don't think you'll see the -- we won't be able to sustain the massive progress that was made in '25. And the progress in '25 really was a combination of a lot of things, right? It was all the lean stuff we're doing at the plants. We put in a lot of new forecasting tools in '24, which helped us better forecast the model mix, which again helped control inventory.
We also really just kind of cleaned up a lot of the stuff coming out of COVID, right? Just the craziness of COVID and the builds and all the volatility in '24. As you recall, we shut down, really slowed production in the back half of '24. So we exited with a high level of finished goods. We corrected that in '25, which we had committed to do. So we really executed on the things we said we'd do with working capital. So '26, that benefit probably won't be quite as high. So we're looking from a cash flow standpoint really to be more in the range of about $160 million of operating cash flow and about $120 million of free cash flow.
So we'll continue to work to improve that. It's just going to be tough to repeat the performance from '26, but working capital will continue to be a big focus. We're getting close to being back to some of our kind of historic best working capital levels. But I think there's opportunity there as we continue to invest in our IT systems, improve our forecasting, and Mark and the team continue to improve the operations of the factories.
And as a follow-up, could you give us a sense of your goals for financial leverage at the end of '26?
Yes. So as you guys know, we went out about midyear last year, renegotiated our covenants. We got a year of covenant relief. So we're sitting with covenants in the 5s for the first 2 quarters. And we knew all along that the most challenging quarters from a covenant standpoint were going to be Q1 and Q2 this year because we're starting to pull in some of the lower tariff impacted EBITDA from last year and the unimpacted quarters that we had in '25 are rolling off. And obviously, we've got about a $90-plus million tariff headwind in the first half of '26. So we knew those were going to be the most challenging.
We were able to pay down a lot more debt, obviously, in '25 than we had originally anticipated. So as we get through the year, we expect to be able to get to be under our normal covenants that are in the [ 3 to 5 ] range through the back half of the year, and then we'll continue to pay down debt from there. I mean, long term, as EBITDA recovers through tariffs reduction and price and debt comes down, we'd like to be back in that 1 to 2 range, which is our goal for being investment-grade rated. But we've got a great relationship with our banks. We spend a lot of time with the rating agencies. Those conversations have all been productive. Everybody understands the short-term impacts of the tariffs that can be offset with the moves out of Asia that Mike talked about. It just is going to take some time. And so we'll continue to make progress on that in '26, and we'll start to really see the benefits of all those moves more in '27.
The next question comes from Tristan Thomas-Martin with BMO.
I just want to make sure I'm thinking about Indian the right way in '27. So it sounds like just about like TSA, a lot of the stuff drops off. And then the only thing we have to think about is that $0.20 to $0.25 of dollar incremental in '27. Is that right?
Yes, that's right. I mean the TSAs, there might be a little bit of IT stuff that hangs on longer, but it won't be material, and it will be really easy to show you guys when we get there. We just don't know. Obviously, we're pushing to get out of the TSAs as fast as we can. And the Indian team is doing the same. So everybody's goals are aligned there of trying to be separate companies as soon as possible. So the -- really, the only impact in '27, obviously, is the dollar, and it will be -- we'll get all of it in '27, where we won't in '26 because we'll sell the business sometime in the quarter.
Okay. And then just one more. You called out, I can't remember, that 7% to 9% organic sales growth. If I kind of adjust for Indian and the $400 million, it implies, call it, $200 million at the midpoint. Can you maybe just talk to what's driving that? And then also maybe give us a little help around how you're thinking about Off-Road versus On-Road versus Marine?
Yes. I mean, look, the big block math when you strip Indian out on both sides is our revenue is up somewhere in that $400 million to $500 million range. And it's -- we've got a little bit of price in there. That's our normal model year pricing that will -- that we put in place. The majority of that is really just simply the math of not undershipping retail, which is essentially where we've been for the last couple of years. We pulled our dealer inventory down 17% overall within Off-Road, down 9%. And as we talked about, we've got the mix of that healthy, all those things. So we feel like our inventory is in a really good spot.
So as we look through '26 and we talk about a flat industry, that puts us in a spot to be able to have build, ship and retail all aligned. And as a result of that, we pick up revenue on an incremental basis. I'd point you back to the comments we made. We expect the strength really to maintain in utility. We think the rec side is going to continue to be challenged. I think we're going to need more relief from an interest standpoint. I think we're going to need to see continued inflation reduction. And I do think that there's a lot going on in our country right now. And I think that just has people kind of standing back and waiting. If they don't absolutely have to make a purchase, they're not going to make it.
The good news is, as we talked about, I mean, you've seen it show up in our PG&A results. I mean, we're moving a lot of wheels and tires and oil and parts and components. And we know because we track RO activity, miles driven, people are still out using our products. So we know people are riding. And the good news is at some point in time, they're going to want to come in and get our latest and greatest on the rec side, and we've got some pretty cool stuff there. And we feel good about what we're doing to set us up for the long term.
The next question comes from James Hardiman with Citi.
You guys have done a great job of sort of helping us bridge. I just want to make sure I have these pieces right because certainly, the wholesale piece is bigger than I think most of us thought. So you're talking about a $400 million top line, 40% flow-through on that. That's $160 million. So that's almost $2 right there. You've got another, call it, $0.75, $0.80 coming from Indian. And then you've got some cost savings and some commodities that may be offset. And then the rest is ultimately to get to that, call it, $1.55 bridge from '25 to '26, the rest of that is just tariffs, correct? Like we're not missing any pieces there?
And commodities.
Tariffs, commodities and a little bit of lift in OpEx as we invest more in engineering and IT once you pull Indian out.
Got it. And then sort of that $90 million tariff number, maybe I was doing the math wrong last quarter. That's a little bit higher than what I thought you guys were saying a quarter ago. Did that number change at all? And I guess to this -- I mean, obviously, you don't have a crystal ball in terms of where things are going to go. But specifically, the tariffs that Mexico has put on China doesn't seem like you think that's going to be particularly impactful to your numbers. Maybe walk us through sort of what the latest is there, what your lawyers are saying and if you feel confident that, that's never going to be a piece that's ultimately going to impact you?
Yes. Well, so look, we're obviously still awaiting what the Supreme Court may come through. And obviously, the team's got a plan of action because there's a lot of complexity if they were to rule against President Trump. We are obviously off still working the lobbying angle as aggressively as we can. Look, I give our team a lot of credit for -- we're small compared to the majority of these companies that are up getting airtime in D.C. And I think our team has done a really good job of getting in front of USTR and Commerce and the executive team there. So we're not backing off. We're going to continue to put pressure on it as best we can. And certainly, if something were to break there, that would be tremendous. I mean we've got over $200 million worth of tariff in our business right now. And when you add all that together, it's darn close to $3 worth of earnings. That's really frustrating for us when we see all the benefits and the operational improvements, and they just are getting dwarfed.
And so we're going to take matters into our own hands like we always do. We'll keep working all those angles that require someone else to act on. But we've got a team. We've quoted pretty much 100% of what comes out of China. And now we're working, and we've got meetings every couple of weeks. We're looking at the amount of transition that we've got, getting that material cost of goods sold from China from 18% down to less than 5% by the time we get into 2027 is that's not easy work. There's a fair amount of revalidation and things that have to go into that, and the team is aggressively going after it. I actually think we're going to turn it into a net positive. I think we're going to find opportunities for localizing the supply chain.
Back to the earlier question about cash flow, that's going to give us working capital and quite frankly, flexibility and responsiveness that we don't have today because the lead times are so long with product being on the ocean for 4 to 6 weeks, making its way over here. So I think we'll be able to turn into a positive, but it's a very real load on the business financially, and we're working every angle we can to mitigate that.
But to clarify, you don't think -- I'm sorry, go ahead.
We thought it would be about $100 million of incremental tariff impact. So in our view, it's come down a little bit. But the $20 million of commodities is new, and that's obviously where commodities sit today and that moves around and we do hedge. But there just has been a lot of pressure on commodities. And a lot of that is tariff driven, right, as there's different tariffs on steel and aluminum and other commodities that puts pricing pressure on stuff that you're sourcing out of the U.S., which is primarily where we buy all of that stuff. So total for the year, ex Indian, we're looking at $215 million of tariffs on the business. So it's still a big drag when you include the old 301 and the stuff that came in last year.
But you guys, just to clarify, don't think that the Mexico tariff on China is going to impact you?
No, we don't. They put tariffs on a pretty defined group of parts. And as of right now, that hasn't impacted us. I mean, obviously, there's -- it's hard to foresee the future in this tariff environment. But we don't believe right now that's going to be a significant impact.
No. And we're participating in the comment process for the USMCA and knock on wood. There hasn't been a whole lot of drama associated with that. So I think the administration understands the importance of the relationship with Mexico. And to Bob's point, Mexico, this isn't new. They've always had some level of restrictions, maybe not always tariffs, but employment requirements and et cetera, that they've tried to slow down some of the proliferation of the Chinese suppliers in Mexico.
The next question comes from Noah Zatzkin with KeyBanc.
I guess, first, in terms of kind of inventory levels across the industry, I think this time last year, there were really kind of a couple of offenders in terms of making the channel heavier. So if you could just kind of speak to what the channel looks like maybe relative to last year and just expand on how you guys are feeling about your position?
Yes. Look, I feel really good about where we're at. When you look at us and the next largest competitor together, we make up probably 60% of the industry. We are both pretty much in parity from a days sales outstanding or inventory on hand, current, noncurrent. The data we have would suggest we probably have the healthiest mix. But with 60% of the industry in a good spot, that is certainly helpful to dealers. That said, we still do see some pockets where some of the Japanese competitors are struggling. It tends to move around quarter-to-quarter as to exactly who that is. I don't want to get into naming names. We know who they are. We know where our overlaps are. It's more of a nuisance to the dealer. The volumes that those products have, most of them are less than 10% market share.
So it's not creating substantial financial headwinds for the dealers, it's just more of something that they've got to deal with. We know we spend -- every quarter, we meet with our dealer council, and they are incredibly appreciative of the work that we've done, the fact that we set expectations in August of '24 and drove hard to get there by the end of '24 and then into '25, we've held and we've stayed consistent with what we told them. We've done a lot of work. When we talk about health of dealer inventory, there's been tremendous work done during the course of '25 to make sure that we have the right inventory.
Having the day sales at 100 or less is one thing, but it's the mix of inventory and making sure we got the right stuff at the right dealership. We've talked about the aged inventory. We've taken the inventory that's greater than 180 days, down almost 60%. That's all helpful because it's not just taking the interest burden off, but it allows them to focus on being able to move product and make healthier margins. And so we feel good about that setup. And there's still a couple of players out there that got a little work to do, but thankfully, they're a relatively smaller part of the industry.
Great. Maybe just one more. Obviously, we've kind of talked about this. But if you could just remind us kind of what are the pieces to consider when we're thinking about kind of the $400 million plus volume benefit in a flat retail environment? Like where are kind of the pockets of kind of lighter inventory?
Well, I mean, I guess I'd step back and say we feel good about the inventory level at the dealers for both ORV and Marine. And so both businesses have an opportunity as we move forward even in a flat environment to have growth because we're now at a build, ship, retailer all equal. And so largely, it's driven off of that. And then I would just say that the utility segment remains strong. So we don't expect big things from the rec side, but we do think that the utility will have enough growth to help offset any weakness that we see on the rec side.
The next question comes from Robin Farley with UBS.
Just it's interesting with the benefit here to your EPS from the Indian sale. Can you help us think about -- you're still going to have Slingshot in your On-Road business. What kind of EPS drag is Slingshot, if we think about what you'll have when everything is fully separated from Indian, just to kind of think about what the EPS impact from Slingshot is.
Yes. And Robin, I'm going to take the opportunity to answer your question a little more broadly because you're introducing kind of the thoughts around the portfolio. And I'm going to get to the Slingshot answer here in a second. But we've heard a fair amount of noise out in the environment around our Marine business. And I just want to go on the record that we have 0 intention of divesting the Marine business. We know that many of our competitors tried to wait into the Marine space and struggled. We have an excellent business, and it's an excellently run business. And I'll remind you that back in 2020, when the pandemic first hit, we took the opportunity and we shed three brands that were underperforming, leaving us with Bennington, Godfrey and Hurricane, which are all #1 or #2 in their category. And you've seen the performance over the past couple of years, both in terms of refreshing the portfolio and the share gains that we've had. The business has returned over 80% of the original purchase price. And even at low points that we've been in, in the industry, the business is still making a lot of cash flow.
And so I just want to -- I want to quell some of the noise that's been out there. And largely, we feel good about our portfolio now. We've gone through and really pulled out a lot of underperforming businesses. There's always going to be things within the portfolio. We've gotten far more refined at how we look at things financially. Slingshot has been heavily impacted over the past couple of years. It is our most interest rate-sensitive business, highest level of financing. And obviously, with interest rates being high as well as consumers being somewhat stretched with inflation and just other interest payments. That business has slowed down significantly. And so we have been losing money. I'm not going to get into the specifics. It's not material to the company. And we have an aggressive plan on how we're going to resolve that moving forward.
And similar to what we've talked about in the past, if we can't get things to where they need to be, then we'll obviously take action, but I'm not ready to make any declaration relative to that. Slingshot is a really neat business. It's an important component of our Adventures offering. Those products tend to rent really well on both coasts. And so we're in a product refresh cycle. And so over the next couple of years, I think you're going to see improved performance coming from that business. And we'll continue to look in different aspects of our company, aftermarket brands, et cetera, and make sure that we've got the right level of returns across the portfolio. But I think you can rest assured there are no big remaining moves left for us to make at this point.
Great. I appreciate that. Maybe just one small follow-up and maybe more one for Bob. Just a small one on your guidance for margin. Are you assuming that mix is going to be a benefit or a drag this year? I'm just thinking specifically in the ORV business with RANGER 500, a little bit more midsized. Just how is that factored into your guide -- a higher mix of that?
Yes. I would -- we think mix is going to be a headwind this year. We had really strong NorthStar retail and NorthStar shipments that we kind of keep up with that demand in Q3, Q4. And so we'll see how that -- the NorthStar mix plays out going into '26, but it's certainly a strong tailwind in '25, and I don't know if it will sustain quite that well in '26. The RANGER 500, to your point, selling really well, really popular with customers and dealers, but that is a bit of a margin headwind. And then we've got a little bit just in the mix in rec. We've also got some kind of interproduct mix headwind. Marine starts to shift to retail, which will recover. And that's a headwind to GP. It's really not to EBITDA, but it's definitely a headwind to GP. As Mike was saying, it's a strong business, but it's structurally the GPs are lower because the OpEx is significantly lower. EBITDA margins in the business are actually pretty good, but it will be a mix headwind to GP.
And then snow. Snow, while improving, snow is just structurally a little bit lower GPs than Off-Road. And so as snow starts to recover, we're not going to have a huge snow build year in '26. We said that in our prepared remarks. We're going to be cautious going through '26 into the '27 season and really try to make sure we get inventory where we want it. We've made good progress this year, but there'll be a little bit of headwind from that.
So you'll see some headwinds in mix, but some of that's offset by -- we expect the promotional environment to slow down a little bit as there was a lot of promo in the channel in '25 as it related to clearing inventory, and now we're kind of more just into trying to get retail because everybody is -- the Japanese are a little heavy, as Mike said, but inventory is in a better place. So we'll see some positive there. And then also just our normal price increases that we hadn't put through in a few years. So we've got a little bit of price going in also to help offset that mix.
The next question comes from Gerrick Johnson with Seaport Research Partners.
In the past, you've given us explicit guidance on the segment's top line, up or down low single digits, whatnot. I know you've given us a lot of bits and pieces to kind of put the puzzle together, but can you give us sort of guidance for 2026 on the three segments and how you expect top line to perform?
We're not ready to do that, Gerrick, just with the complexity of Indian moving out, and we will be reevaluating our segments in the first quarter, and we may make some changes to how the segments fall. So our plan would be to update that guidance either on the Q1 call in April or if the opportunity presents itself, we may do it at a conference ahead of that depending on the timing of the Indian sale. But we've given the guidance we're going to give right now for [ '26 ].
I mean, Gerrick, the way to think about it is we're trying to get the Indian transaction closed sooner rather than later. So whenever that happens, there's obviously going to be updates to guidance in terms of -- we've made the assumption it's a full quarter worth of revenue and loss. And if I were a betting guy, I'd say it's probably going to be something less than that. So when we are able to come out with that, we'll also share the new segmentation of the business and be able to provide more color at that point in time.
Okay. And then on utility, you mentioned utility strength, and that's been ongoing. But next year or actually, I should say this year, it looks like there's some benefits to small businesses, construction, farmers, ranchers with bonus depreciation and other goodies out of the one big beautiful bill. So what kind of impact are you anticipating from the incentives there?
I mean that's largely what we think is going to keep that utility segment. I mean there's other aspects, obviously, with all the innovation, but we do think that those are -- the utility segment is where most of that benefit comes through. And so we've got programs that are specifically targeted that. What we have not assumed is some significant uptick across the record side from higher tax returns, et cetera. We've scoured the data and it's tough to know exactly where and how that's going to come through and which customer segment it could potentially impact, and whether or not that money actually goes to buying discretionary products as opposed to people deleveraging and cleaning up credit card bills and things like that. So we've got the factories in a much better spot so we can respond. Hopefully, we're responding to an uptick in volume. But at this point, we're not making that call.
Yes. I mean if you look at the data, you would think that rec, this should be about the time all the buyers from kind of the COVID era start to rebuy. And we can see in the data that they're still riding their vehicles. Oil sales have been strong. We talked about that earlier in the call. But we're not baking that in. We've got some great new products out there, the XP S, the updated Pro R. But until we see data different, we expect rec to continue to be a challenged side of the industry with better opportunity in utility.
The next question comes from Scott Stember with ROTH Capital.
Questions on Off-Road outside of Indian. It looks like Goupil and Aixam are really doing well. Could you talk about how that fits into your guidance for '26?
Yes. I mean -- look, I missed part of your question. So it sounds like it was on the Goupil and Aixam business?
Yes, yes. Just on the thoughts of the guidance.
The majority of the guidance move is our ORV and Marine businesses.
Okay. And then on the retail financing side, obviously, it doesn't seem like we've gotten a lot of help. But have you seen through your relationships, any budging on lending rates with the banks? Anything on the margin that you could share?
Not really. Credit stats for the quarter and really for the full year were pretty consistent. When we ran aggressive promo financing, it had the intended impact. So consumers are still looking for lower rates. Rates have come down a little, certainly at the better end, if you're in the 700-plus credit score range, but nothing dramatic yet. And I think it's tough to plan what the Fed is going to do. It's bounced all over the map. So we're assuming not a lot of help Fed-wise in the year and that '26 will kind of be a lot like '25, where promo rates will help and people will choose between rebates and promo.
This concludes our question-and-answer session and concludes our conference call today. Thank you for attending today's presentation. You may now disconnect.
Polaris Industries Inc. — Q4 2025 Earnings Call
Polaris Industries Inc. — Q3 2025 Earnings Call
1. Management Discussion
Good day, and welcome to the Polaris Third Quarter 2025 Earnings Call and Webcast.
[Operator Instructions]
Please note this event is being recorded. I would now like to turn the conference over to J.C. Weigelt. Please go ahead.
Thank you, Chuck, and good morning or afternoon, everyone. I'm J.C. Weigelt, Vice President of Investor Relations at Polaris. Thank you for joining us for our 2025 third quarter earnings call. We will reference a slide presentation today, which is accessible on our website at ir.polaris.com. Joining me on the call today are Mike Speetzen, our Chief Executive Officer; and Bob Mack, our Chief Financial Officer. Both have prepared remarks summarizing our 2025 third quarter as well as our expectations for 2025. Then we'll take your questions.
During the call, we will be discussing various topics, which should be considered forward-looking for the purpose of the Private Securities Litigation Reform Act of 1995. Actual results could differ materially from those projections in the forward-looking statements. You can refer to our 2024 10-K and other filings with the SEC for additional details regarding risks and uncertainties. All references to 2025 third quarter actual results and future period guidance are for our continuing operations and are reported on an adjusted non-GAAP basis unless otherwise noted. Please refer to our Reg G reconciliation schedules at the end of the presentation for the GAAP to non-GAAP adjustments.
Now I will turn it over to Mike Speetzen. Go ahead, Mike.
Thanks, J.C. Good morning, everyone, and thank you for joining us today. As we previewed a couple of weeks ago, we delivered strong third quarter results. Sales in the quarter were $1.8 billion, driven by stronger-than-anticipated shipments to meet improved retail and a solid mix of Off-Road vehicles, especially RANGER side-by-sides. Equally important, we made a significant strategic move with the announced sale of a majority stake in Indian Motorcycle. This move allows us to sharpen our focus on our core business where we see the greatest potential for profitable growth across our portfolio.
From more efficient plant operations to healthy dealer inventory and improved working capital, the Polaris team is delivering results in the areas we can control. This gives me great confidence that we will move through the stage of the current economic environment. Polaris is positioned to deliver strong earnings and higher returns for shareholders. Sales were up 7%, driven by a richer mix of shipments in the Off-Road segment and higher shipments in Marine, partially offset by increased promotions. Shipment volume and ORV were up approximately 5%, excluding Youth product. North American retail rose 9%, led by strong Off-Road performance, resulting in approximately 3 points of market share gain in ORV.
We led the industry by making a commitment over a year ago to reduce dealer inventory, and this last quarter marked a turning point. Dealer inventory is now down 21% year-over-year. Flooring expenses are materially lower for dealers, down over 50% in some cases, and days sales outstanding for Polaris inventory is as low as I can remember, excluding the pandemic era. Not only is our dealer inventory substantially lower, but it is also healthier with aged units and dealer inventory down approximately 60% relative to 6 months ago. This gives us confidence that dealers and Polaris are in a great spot to capitalize on growth and margin expansion when the market normalizes and improves.
Adjusted EBITDA margin was under pressure compared to last year, driven by increased tariffs and normalized incentive comp. We continue to manage costs carefully and drive lean and operational efficiencies across our business to exceed our goal of $40 million in structural operational efficiencies this year. Some examples of these efficiencies include lower labor costs driven by lean activities that have increased efficiency and improved material flow in all areas of the plant and lower raw materials and the elimination of a warehouse in Mexico, driven by improved forecasting and demand planning as we see improved material flow.
These are just a couple of examples of the many improvements we've seen throughout our plant network. We're still in the early stages of lean deployment, which gives me great confidence in the efficiencies we have in front of us. Adjusted EPS came in at $0.41, driven by a strong mix and operational efficiencies, partially offset by tariffs and normalizing incentive compensation. As we look ahead to the remainder of the year, we're reintroducing full year 2025 guidance. We're closely monitoring consumer health indicators like unemployment, confidence, debt and discretionary spending as well as developing supply chain constraints resulting from global trade tension.
Our Q4 expectations are for sales to grow sequentially. However, mix and operating expenses are expected to negatively impact sequential EPS as is increasing tariff costs. Bob will walk you through the details shortly.
Looking at the details from this last quarter, retail was up 9%, led by strong growth in Polaris RANGER and crossover vehicles. As expected, Youth experienced headwinds due to our shift in production out of China. We anticipate Youth will continue to be a challenge early in Q4 as we begin to build inventory throughout the quarter and into the holiday season.
This summer, we reintroduced the Polaris factory authorized clearance program for the first time since 2019. It was a success with dealers and customers, driving growth without significantly increasing promotional spend. FAC was a powerful marketing tool that successfully reengaged customers and drove increased dealership visits, which resulted in a significant drawdown in our non-current dealer inventory. On-Road was down mid-single digits as we lapped a strong comp with the launch of the new Indian Scout motorcycle in 2024. Within Marine, pontoon retail in the quarter was down low double digits compared to last year.
We gained share across Off-Road and On-Road in the quarter. Within our Off-Road utility segment, our family of RANGER side-by-sides continue to grow and take share with the broadest offering of vehicles in the utility side-by-side category. From the all-new Polaris RANGER 500 to the extreme duty Polaris RANGER 1500 XD, we have continued to create and redefine the category that remains unmatched by our competitors. Despite recent product launches from our competitors, the Polaris 1500 XD continues to be the highest performing utility side-by-side in the market. Why does this matter? Because our leadership and product allows us to take over 5 points of market share this quarter in the utility side-by-side segment, which is the largest category of vehicles in the ORV industry.
Remember last quarter, when I talked about the Polaris XPEDITION and how this product has helped shape the largest share capture story in ORV over the past 5 years. Well, we continue to write new chapters as we gained an estimated 10 points of share in the quarter within the crossover category. Again, despite recent product launches from our competitors, the Polaris XPEDITION continues to be the only product of its kind in the market. As the industry leader, Polaris sets the bar, and we continue to play offense, bringing innovation that is winning at dealerships. In addition to inspiring current customers to return to dealerships, innovation also brings new customers to the industry. An excellent example of this is the recent launch of the RANGER 500, our new entry-level utility side-by-side that launched in July. To date, over 80% of the customers who bought the RANGER 500 were new to Polaris. This tells us that this is the right vehicle at the right price to get customers into the dealership and in a Polaris vehicle.
As you know, I regularly carve out time to get into the field and visit dealers and take part in dealer council meetings. This feedback we received during these meetings is instrumental in helping us keep a pulse on dealer sentiment across the industry. They share what's working, what's not and what they're hearing from customers. Inventory levels have been a regular topic over the last 2 years. My recent takeaways are that dealers are more comfortable with their inventory positions in ORV and are embracing our NorthStar Reward program in record numbers. Given these conversations with dealers and the data we have on dealer inventory, we believe we have reached a point where production, ship and retail should be aligned. While there is still work to do in Snow, which we believe will normalize this quarter, this is a big win for Polaris and our dealers. We continue to have an intense focus on winning at the dealerships with unmatched offerings across vehicles, PG&A, service and financing.
We are the global leader in powersports and take that responsibility seriously as we continue to push the industry forward while expanding the addressable market. One way to show leadership is through proven race performance. Recently, Polaris RZR Factory Racing solidified its dominance in desert racing with a third straight victory at the Baja 400, sweeping the UTV overall podium and a commanding performance. This dominance redefines what is possible in racing as we continue to raise the bar even when our largest competitor races their latest top-end performance vehicle.
Another way to prove leadership is innovation. Our innovation pipeline is showing no signs of slowing with last week's second wave of 2026 ORV product launches. Leading the charge is the all-new RZR XP S. It is Polaris' most capable trail machine yet, engineered for riders who want to conquer wide open terrain with confidence and style. With a bold 72-inch stance, 25 inches of usable suspension travel and a rugged RZR Pro S driveline, it is built to dominate the toughest trains while delivering a smooth, responsive ride.
We also introduced the largest display in the industry with a 10.4-inch screen for RIDE COMMAND on the RZR Pro R. On the utility side, we launched several limited edition Polaris Ranger XD 1500s with the NorthStar Texas and the NorthStar Mountaineer editions tailored to meet the specific needs of customers in key regions. In snowmobiles, we have a robust product pipeline of innovation that we will bring to market in the coming years. And in Marine, we just launched a full redesign of our flagship QX Bennington pontoon. The QX lineup blends timeless design with intuitive technology and thoughtful innovation, again, setting a new standard in the pontoon industry.
Another example and one that my family and I will be attending is the upcoming annual Camp RZR event in Glamis. It was one of my favorite weekends of the year and an incredible opportunity to witness our customers' passion for riding and what the Polaris brand stands for. The energy and enthusiasm at Camp RZR is a powerful reminder of the deep connection our community has with our products, and it continues to inspire our team as we innovate for the future. One leaves Glamis feeling confident in who the true leader in powersports is and what a company's impact on the industry can mean. It's an honor to be part of such an amazing company that is the global leader in powersports continues to support the long-term health of the industry with the largest and best dealer network, a team that delivers rider-driven innovation, providing great customer experience and a strategy built to generate shareholder value.
Let's shift to the Indian Motorcycle transaction. We announced a definitive agreement to sell a majority stake in Indian Motorcycle to Carolwood with the deal expected to close in Q1 2026. Indian Motorcycle will become a stand-alone business, and we will hold a small equity stake in the company. This move is expected to unlock the full potential for both Polaris and Indian Motorcycle. Carolwood brings strong capital backing and a commitment to investing for the long term, and they brought in an experienced leadership with their selection of Mike Kennedy as CEO. They are poised to take Indian to the next level.
We've built something incredible, the #2 motorcycle brand in the U.S., the #1 brand in customer satisfaction, over 600 dealers, over 900 dedicated and talented employees and a strong lineup of motorcycles exemplified by being the market share leader in the mid-sized category.
Now it's time for Indian Motorcycle's next chapter and Carolwood is the right partner. For Polaris, the decision allows us to focus on our most promising high-margin growth opportunities. Innovation is key, and we're doubling down, accelerating investment and devoting resources to critical priorities and initiatives, which is very exciting given the product pipeline we have in ORV, Snow, Marine and Slingshot. The focus continues to be on enhancing the customer experience with rider-driven innovation. Shareholders should be excited as well. Post separation, we expect the transaction to be accretive to adjusted EBITDA by approximately $50 million and to adjusted EPS by approximately $1. It's a win-win. Right now, teams are focused on standing up Indian Motorcycle to operate independently from Polaris, and we are committed to making this a smooth transition for Indian Motorcycle dealers and customers.
I want to shift gears and talk about what we're seeing related to trade policy as it continues to evolve. Our gross tariff impacts for the year rose by $10 million since July, driven by international retaliatory policies and increased commodity exposure. Despite this, given deferrals and mitigating actions, we don't expect a material change to our 2025 P&L outlook and now expect the impact from new tariffs to be approximately $90 million. We're executing our mitigation strategies effectively with an urgent focus on our China spend with a long-term plan to drastically reduce our spend on all China parts and components. These efforts take time to find suppliers, tool production and validate parts.
By the end of 2027, we expect our actual China spend to be down by approximately 80% relative to 2024, which equates to less than 5% of our cost of goods sold coming from China. It's an aggressive strategy that will take time to show up in the financials, but I can assure you that we have a very capable team focused on these efforts and ultimately believe that we will have a more resilient and efficient supply chain because of the moves.
I'm going to turn it over to Bob to provide you with more details on the financials. Bob?
Thanks, Mike, and good morning or good afternoon to everyone joining us today. Let's start with the third quarter financial results. Adjusted sales for the quarter were up 7%. This was stronger than our expectations, driven by higher shipments and a richer mix of Off-Road vehicles. Net pricing was neutral with price increases offsetting elevated promotions. International sales grew 2%, led by strength in Europe. PG&A sales were up 20% with record performance in parts, especially oil, which is a great indicator that our customers are actively using their vehicles. Gross profit margin benefited from mix and operational efficiencies as compared to last year, but that was more than offset by $35 million in new tariffs, volume declines and higher incentive compensation relative to last year's depressed level.
Accordingly, adjusted EBITDA margin contracted year-over-year as expected due to the previously noted issues impacting gross profit, along with the year-over-year incremental incentive compensation impact in OpEx. As you may recall, we made temporary cuts to incentive compensation in the second half of 2024 due to challenging market conditions. It is important to note this year-over-year headwind in incentive compensation includes cash and stock-based compensation and is mainly recorded at the corporate level. Despite these pressures, we generated $159 million in operating cash flow this quarter, reflecting strong earnings quality and improved working capital management. Year-to-date, we've delivered over $560 million in operating cash flow and approximately $485 million in free cash flow, which is a testament to our strong execution and our low working capital business model.
Off-Road sales rose 8%, supported by a richer mix of ORV vehicles, strong commercial volume and PG&A growth. Dealer inventory continues to improve across the industry. As Mike mentioned, we've turned a corner in our core ORV business and now plan to ship in line with retail demand. There are a couple of exceptions to note. For used vehicles, we recently moved production out of China, which may cause some volatility in retail estimates and dealer inventory as we rebuild stock. Snowmobiles are another exception. We reduced ship this year to help manage dealer inventory following 2 seasons of low snowfall in the flatlands.
Overall, we expect dealer inventory across the portfolio to be well positioned relative to demand as we head into 2026. We gained about 3 points of market share in ORV this quarter, led by Polaris Ranger and Polaris XPEDITION. Importantly, our successful FAC program didn't require heavier promotional spending than what we incurred in the second quarter. Gross profit margin improved by 104 basis points despite tariff headwinds. Key drivers included operational efficiencies, a better mix of vehicles and positive contributions from warranty and dealer floor plan financing.
Moving to On-Road. Sales during the quarter were down 3%, driven by ongoing softness in the broader motorcycle market and within our Slingshot business. Adjusted gross profit was down 23 basis points, impacted by negative mix and tariffs. This was partially offset by a stronger performance at Exim. Marine sales were up 20% against a low comparable last year when we took action to rightsize dealer inventories coming out of the prior selling season. The increase in sales was driven by positive shipments of new boats, including the new entry-level Bennington pontoon. The September SSI data shows that market share held steady for our pontoon business in the third quarter. However, the broader marine industry continues to face pressure from elevated interest rates and macroeconomic uncertainty. We continue to actively manage dealer inventory, which is down 17% relative to the third quarter of 2024. Gross margin declined due to mix, though this was partially offset by positive net pricing.
Moving to our financial position. We generated approximately $159 million in operating cash flow this quarter, translating into $142 million of free cash flow. Working capital has been one of the ancillary benefits from our ongoing efforts to reimplement lean in our plants. Through the improvements we have seen in our retail forecasting and clean build rates, we have been able to better align our supply chain and manufacturing processes, reducing inventory across the board. This, along with efforts to optimize payables and receivables, should continue to drive attractive cash generation metrics over time. We expect 2025 ending working capital as a percentage of sales to be in line with pre-pandemic levels with opportunity to improve from there as we continue the lean work in our plants and further localize our supply chain.
We remain committed to maintaining investment-grade credit metrics and ended the third quarter well below our covenant thresholds given strong year-to-date cash generation. With our strong performance on cash generation and ongoing tariff mitigation efforts, we are moving to a more balanced split between investments for growth and debt paydown. While we will continue to focus on reducing our debt levels, we will also invest in high-return opportunities to widen our competitive moat in an industry where we already have a strong position with the most innovative portfolio of vehicles. We also continue to remain committed to the dividend and our Aristocrat status.
Clearly, the global trade and tariff environment remains dynamic, but we are seeing more consistency in customer demand. Given that, we are reintroducing full year guidance. While this only covers 1 quarter, we believe it helps reduce uncertainty from an investor standpoint and build confidence in our outlook. Although the evolving trade environment required us to withdraw full year guidance earlier this year, we are pleased that excluding added tariff costs, our full year guidance results remain aligned with the expectations we initially set in January.
We expect full year adjusted sales between $6.9 billion and $7.1 billion, with growth in Marine and PG&A offset by declines in On-Road. Off-Road sales are expected to be flat. Industry retail is projected to be flat, but we anticipate gaining share, thanks to our strong product portfolio. Adjusted gross profit margin is expected to be around 19% with tariffs representing a 1 point headwind. Other margin pressures include negative net pricing and incentive compensation, partially offset by lower warranty costs and operational efficiencies.
For the fourth quarter, there are a few sequential headwinds contributing to our expectations that fourth quarter adjusted EPS will be lower than our third quarter adjusted EPS. Within the gross profit line, tariffs are expected to be $5 million higher and mix is tracking negatively with the timing of seasonal products such as Youth, Snow and Marine. Within OpEx, the timing of certain costs in engineering and legal are sequentially higher. All in, we expect fourth quarter adjusted EPS of approximately $0.05. This assumes no new tariffs that would have an immediate impact on raw material and component costs and that supply chains are not significantly disrupted by trade disputes and other government actions.
For the year, we expect adjusted EPS to be a loss of approximately $0.05. Excluding new tariffs, we would expect adjusted EPS to be close to our original estimate of $1.10.
In summary, we delivered strong Q3 results in a challenging environment. We have momentum to finish the year strong with a positive outlook on operations, dealer inventory and innovation. The expected sale of a majority stake in Indian Motorcycle will free up resources that we plan to fully dedicate to higher growth and higher-margin opportunities. We remain focused on what we can control and believe this disciplined execution will drive higher margins, stronger cash flow and improved returns on invested capital, ultimately increasing shareholder value.
With that, I will turn it back over to Mike to wrap up the call. Go ahead, Mike.
Thanks, Bob. I'm proud of our team's performance this quarter. This continues to be a challenging environment, and the Polaris team remains focused on closing out 2025 strong. Let me wrap up with a few final comments. We believe dealer inventories are at healthy levels given our demand outlook. Therefore, outside of a few smaller product lines, we believe build, ship and retail should be aligned going forward. Our team continues to execute against our strategy to improve operations within our plan, and we are on track to exceed our commitment to deliver $40 million in operational savings this year, building on the more than $200 million in savings last year.
This cannot be overlooked. We have worked hard over the last 2 years. And while there is still work left to do, we have seen the results and the opportunities ahead of us that should provide a meaningful tailwind to margins when volume returns. The rationale behind our decision to sell a majority stake in Indian Motorcycle allows us to put added focus and resources on our most profitable growth opportunities. We're working to close the Indian Motorcycle transaction in Q1 2026, and we believe it's a win for both companies.
Lastly, we remain committed to our long-term strategy to be the global leader in powersports and believe we have established a solid foundation to grow from and increase shareholder value when the industry recovers. Innovation is strong, dealer inventory is rightsized, and we are running more efficiently than before. These are the pieces to build from, and we stand ready to deliver on our goal of higher sales growth, greater earnings power and stronger returns. We appreciate your continued support.
And with that, I'll turn it over to Chuck to open the line for questions.
[Operator Instructions]
And the first question will come from Noah Zatzkin with KeyBanc Capital Markets.
2. Question Answer
Maybe first on ORV retail strength and kind of the magnitude of outperformance versus the industry in the quarter, up 9% versus up low single digits, particularly on the utility side. Wondering if you could share any thoughts around what drove those share gains in the quarter as well as thoughts around industry retail and kind of the share gain opportunity looking ahead?
Yes. Thanks, Noah. I think there's a lot at play. I think we've obviously rightsized our inventory. So we've got the right product at the right dealers at the right price. So that's an important starting point. I think when you look at the RANGER lineup, and I talked about it in my prepared remarks, we've got a breadth that many of our competitors just can't cover. You start with the RANGER 500, as I talked about, brought a lot of new customers, 80% new to Polaris into the fold up to the XD 1500, which at this point is unmatched in the industry and remains a very popular vehicle. And you couple that with the massive improvements we've made in quality. It shows up in much lower warranty costs.
We are now hearing dealers play back to us that quality is not something that they have to try and explain. It's something that is a strength and getting associated with our brand. And then as we track customers, we know that the short-term repurchase rates have started to creep up. which says people are out using the vehicles. We can see that with the repair order activity we track, tire consumption, oil consumption. And we know ultimately that people are out using the product. And so they get to a replenishment cycle given a lot of the innovation that we've put out into the marketplace.
I talked a little bit about the NorthStar rewards program in my prepared remarks. We had the highest level of what we call 4 and 5 star, which is the highest 2 levels of our dealer program. And that isn't just important from the perspective of dealers earning more holdback. It reflects the fact that the dealer network is performing at a higher level. And I mentioned that because it provides a better customer experience. And that's really important when you get customers in, given the tremendous amount of innovation we have. That can fall apart if the dealer isn't performing on their end. And we see a tremendous amount of retail coming out of these 4- and 5-star dealers. You couple that with the tremendous innovation we've got in the marketplace with the broadest portfolio in that utility segment, and it's not a surprise that we outperformed the industry.
Very helpful. And maybe just one more. Hoping you could share any early thoughts on fiscal '26, either from an industry perspective or Polaris specifically. Obviously, as it relates to Polaris, there are some puts and takes next year. The deal, I think, is expected to be $1 of EPS benefit. And on the tariff front, it seems like maybe mitigation this year is a bit better than expected. So just any high-level thoughts around '26 would be helpful.
Yes. I'd kind of look at it in this order. I mean, clearly, the Indian deal is probably going to have the largest impact. It obviously takes about $450 million of revenue away, but it is going to add roughly $50 million in EBITDA and $1 of EPS. So that single event is going to be pretty significant. I mentioned in my prepared remarks that build will equal ship, will equal retail. We're not prepared to make a call on where we think the industry is.
But if you think about a flat industry and having ship equal retail, you're talking about several hundreds of millions of dollars of uplift just from being able to ship into the channel, which obviously will provide improved absorption at our plants and additional fall-through. We look at the promo environment. From a competitive standpoint, our largest competitor is pretty much in the same region we are from a dealer inventory standpoint, which is very helpful. We've seen significant improvements amongst the Japanese competitors. They're not perfect yet, but we've seen some of the dramatic things that were being done with rebates and incentives essentially cease, which is good.
So we think promo is going to be kind of net neutral as we get into 2026. And then as you indicated, from a tariff standpoint, it's going to be additional cost because we're going to be lapping '25. And if you remember, we barely had any tariff impact in Q1 and Q2. And as we said, we think tariffs are going to be about a $90 million incremental hit in 2025. As we move into 2026, we think tariffs are going to be just north of $200 million. That's all in. That's inclusive of the 301 tariffs that have been in the business since back in 2018. The team is working hard on that. Obviously, we're watching the negotiations that are underway with China right now, but we're not going to wait. We're moving aggressively.
As I talked about in my prepared remarks, we're making a dramatic reduction in the amount that we're sourcing out of China by 2027. And we think we're going to be south of 5% of our cost of goods sold by the time we get into 2027, and that will be a pretty massive reduction and certainly a benefit to the business.
The next question will come from Craig Kennison with Baird.
I wanted to start with a follow-up on RANGER 500. I know it's early, but what can you tell us about the consumer profile of that product line? Are they new to powersports overall, younger? Are they first-time buyers? Just looking for a profile.
Yes. I mean you kind of hit on all of it, Craig. And they are prospective customers that have wanted to have a Polaris product, but they really couldn't find the right entry point. Until we introduced this product, you really couldn't get into a Polaris vehicle for under realistically $14,000, $15,000. And this vehicle is perfectly suited for someone who has an acre or 2 wants to use the vehicle to drag trash cans down to the curb and go get the mail. And so that's really what we see is these are either new to Polaris, meaning they might have bought a brand that we don't even talk about as a competitive set that are sold through some of the big box retailers or there are people that would have used a golf cart or something like that and now see an opportunity to own the #1 powersports brand.
We think that's great because we view that as an opportunity to continue to evolve them up the product family down the road.
And then I guess, with respect to that particular customer profile, we have seen some cracks emerge in the subprime auto space. And I'm just wondering with respect to your consumer, if you're seeing any changes in credit availability among that particular credit tier.
Yes. We really haven't, at least. in Q3. Credit metrics were good. Through-the-door FICOs were only -- they were down 2 points relative to 2024. Actually, 12-month losses in the portfolio actually improved versus last year. So we feel like that's peaked from a credit quality standpoint. We're starting to trend back in a positive direction and pen rates and things like that have stayed pretty consistent. Availability of subprime has been decent. We're not seeing a fallout from the lenders. So we're not experiencing that, I think, to the degree auto is right now.
The next question will come from Joe Altobello with Raymond James.
I guess first question on retail. Obviously, the FAC was very successful. Any sense or concern that, that might have pulled demand forward? I'm curious what you're seeing in October. I know the FAC, I think, is still ongoing, but it's probably waning in terms of the impact. So I'm just curious if you're concerned there and what you're seeing here in Q4.
Yes. I mean the FAC was -- as I talked about in my prepared remarks, it really didn't drive incremental spend. We viewed it as just a way to generate a little bit of excitement, get people kind of reengaged and coming into the dealership. I mean, at the end of the day, door swings of foot traffic are what drive retail. And ultimately, it worked. We didn't add a bunch of cost. The good news is we were able to move, as I talked about, we've drawn down our greater than 180-day old inventory. We've drawn that down 60%. And a lot of what moved in the third quarter was that noncurrent inventory. As we're looking at October, results are pretty good. We continue to see strength in areas like Ranger XD, XPEDITION, ATV. Youth, as we indicated, is going to be a headwind for probably the next month or 2 as we ramp up production down in Mexico heading into the holiday season. And we think retail, excluding youth and ORV in the fourth quarter is going to be up low single digits. And certainly, in October, we're seeing trends that support that performance.
Okay. Got it. Perfect. And then just moving on to tariffs. I think, Mike, you mentioned that you expect next year to be all in just north of $200 million, which is only slightly higher, I think, than what you're expecting this year if you include the $301 million. So maybe what's the incremental net impact next year? And what do you think a good incremental margin is for '26?
Yes. I mean we're not ready to start giving guidance for '26 yet. I would say that the incremental is over $100 million versus '25. And as we really got to start to see and get a little closer to the end of the year, see what inventories look like, work through our -- the amount of moves we have coming out of China and the timing of those moves to really get a good incremental number related to 2025. So kind of a $200 million plus all-in for 2026 is sort of where we see it right now. We'll have more detail when we talk again in January.
And Joe, remember that also includes pulling Indian Motorcycle out. So there's a number of puts and takes. And as Bob indicated, when we get to January, we'll have a little bit better walk for everyone.
The next question will come from James Hardiman with Citigroup.
This is Sean Wagner on for James Hardiman. I guess, first, I think initially, fourth quarter was expected to be maybe a lot better than third quarter. Was there any shift in earnings power between the 2?
Yes. A few things, and we alluded to some of it on the -- in the prepared remarks. I mean if you look at Q4, I would say sort of 25% of the impact really is in GP, and that's some incremental tariffs. Tariffs will be the highest for the year in Q4. That's just as they build into inventory and start to flow through the P&L. Vol/mix, volume is okay in the quarter, but mix is negative. Mike talked about Youth. And it's negative quarter -- sequentially for the quarters and year-over-year. Last year, we had a big fourth quarter in Youth, and that's partly because we had had vehicles on hold in '23. And so we had really good retail performance in '24. We're kind of back to that a little bit this year where we'll be shipping really in Q4. We didn't ship any in Q3. Normally, a lot of the youth stuff would have showed up in Q3. But with the move to Mexico, that's been delayed a little bit.
So that has probably the most pronounced impact. And then Q4 is always a bit tough from a mix standpoint because we ship a lot of Snow and we ship Marine coming off their dealer meetings. And those are just structurally lower GPs than ORV, whereas in Q3, it was heavy, heavy ORV. Plant performance is a little better, so that helps offset it.
The real story is in OpEx, and it's a couple of things. I mean it's the highest quarter as it relates to the incentive comp compensation issue on a kind of year-over-year basis. And then the timing of some engineering, legal and IT spend that is higher in Q4 than it is in Q3. So those are the big pieces as it relates to the -- why Q4's earnings look the way they do.
Sean, maybe I misheard you, but I thought in your question, you had said that it sounded like it was worse than we were expecting. We did not guide fourth quarter. I mean we had pulled our guidance. If you go back to some of the prepared remarks that Bob had, you pull the impact of the tariffs out, we are largely executing against what we had conveyed at the beginning of the year when we provided guidance before all the tariff noise came into the environment. So I think some of this is that there are numbers out on the street that were not necessarily based on things that we had said. And as we look at the buildup of our financials and where we knew we were going to be delivering snowmobiles and things like that, I wouldn't say that anything in the fourth quarter is a big surprise from our standpoint.
Okay. Fair enough. I guess piggybacking off of that from a high level, now that you've round tripped the '25 guide, excluding tariffs, is it anything outside of tariffs that has fundamentally changed this year or any big lessons that you guys have taken away from the year?
Yes. I mean, I think if we sort of step back and look at the year in total, I mean, excluding tariffs, Promo was heavier than we expected it to be for the year. Mix was probably a little -- was better as we continue to really outperform in our -- as Mike talked about, at the high end of these categories, the XD 1500, the XPEDITION, we don't -- the competition doesn't really have anything to go against us there. So those vehicles continue to sell really, really well. That customer base is really strong. And then the plants really outperformed where we had pegged it. We were at $40 million for the year. We're on track to meet or exceed that. And just good solid performance out of the plants in a challenging environment. I would say those are the 3 big things that stick out.
Yes. And I just want to add to the last one Bob mentioned, Sean. When I think about going back 2 or 3 years ago, operational execution was not our strong suit. We've realized we were not as lean or as good as we thought we were. And when I look at this year, and I look at the fact that our operational teams have not only met what they originally laid out, but they've exceeded it. And they've done that in an environment where we've had to make some interplant product transitions as a result of the tariffs as well as contending with the tariffs and the mitigation work. It's -- we didn't bring on extra people to do that. We've got our supply chain and operational people working those plans.
And the fact that the Polaris organization was able to step up to the challenge and not let the operational improvements waiver and, in fact, accelerate them and put us in a position to exceed, I think, is pretty impressive, and I think gives me a lot of excitement about the future and where we think we can take the company and how much opportunity we have in front of us to improve execution.
The next question will come from Tristan Thomas-Martin with BMO Capital Markets.
One kind of qualification question. Your comment plan to ship in line with retail. Is that just Off-Road? Or is that consolidated Polaris?
I think as it relates to Q4, it's really Off-Road. You mean as we -- the comments I made around moving forward, build equals ships equals retail?
Yes, correct.
Yes. I think you can take it broadly. I mean the reality is that we have timing differences given the seasonality of our businesses within that. But when we start looking at the macro picture around the business, and Bob hit on some of the stats. You look at how much we've pulled down the Marine inventory, where we're at from a motorcycle inventory, obviously, that will be moved out of the business as well as then ORV and Snow. We feel really good about where we're at. And when you look at it on a full year basis, those -- the build equals ship equals retail should hold.
Yes. As it pertains to the fourth quarter, which as I said in my comments, it's really an ORV comment. Motorcycles obviously ships more in the first part of the year as they get into their seasonality, Snow ships more in the fourth quarter and Marine ships kind of more fourth quarter, first quarter as they look at their season. So -- but on a full year basis, to Mike's point, in '26, that's an across-the-board comment when you look at the full year.
Okay. And then just one more. It kind of sounds like everyone is coalescing around a little more of a conservative industry outlook for next year, but also everyone is expecting to take share. You talked a lot about products. So kind of outside of that, what other levers do you have to kind of protect the share you've gained in the last 2 quarters?
Innovation. I think it starts with product, and you can see the results of that. And I think in many instances, our competitors are going to have to catch up in a couple of categories. I think after that comes the strength of the dealer network. We have spent a lot of time, not just tactical things like getting the inventory rightsized, but spending time with our dealers, understanding what works well, what doesn't, what do we need to change.
I think our NorthStar program is the best program in the market. We can see it in terms of the dealer engagement. And that starts with somebody walking through the door to look at a new product to somebody coming into the service bay to somebody coming in to buy parts or accessories for their vehicle or shopping online, getting financed, getting an extended warranty agreement. And I think you have those 2 things together. It's a pretty powerful equation, and I think it will work well for us as we head into '26 and beyond.
Yes. I think there's a lot of -- to Mike's point, a lot of maturity in the management of the dealer network right now, a lot of focus on dealer profitability. We're not out trying to add dealers. We're trying to optimize the structure we have, work with those dealers as people want to get out of the industry, working with the strongest dealers out there to take over those points and then looking at how do you have more kind of multi-dealer structures that allow the dealer to optimize how they run their business and how we deliver to their business. So I feel like all of those things are going to help us, and I think we're the farthest along in terms of how we work with the dealer network.
The next question will come from Robin Farley with UBS.
This is Arpine for Robin. Your margins came in better than expectations, and you, of course, called out sort of favorable mix and positive contribution from warranty expense for the quarter. Could you maybe walk through whether those are recurring benefits to margin as we look into Q4 and more importantly, 2026? I know you mentioned mix reverses to less favorable in Q4. But just thinking about those drivers for next year? And then I have a quick follow-up.
Yes. Certainly, warranty has been a positive story really for all of '25, and I think that trend will continue into '26. The quality of our products continues to improve. We hear that from the dealer base. We see it in the numbers. And you all see it in the warranty as it impacts from a cost standpoint.
Plants, obviously, the big step was in '24, but continued improvement in '25, and we think we'll outperform the $40 million that we had as a target. That work will continue. We're still in the early phases of our reimplementation of lean in the plants. And so there's continued work to do there to drive more profitability out of the plants, and we'll see some more benefits of that as volume improves. And mix is kind of a quarterly thing. I mean there's inter-business mix in terms of the different parts of the company and because different businesses have different GP profiles. But in general, mix continues to be a strong story for us given our outperformance given our innovation at the high end of the product lines. So we think mix overall will continue to be a positive as we move forward.
Great. And then just really quickly, any comments you could give us in terms of early reads into retail environment for 2026? So some of the things that you're looking at that shape your outlook for demand for next year? And maybe any initial comments on cadence of new product intros and where you see opportunity maybe for you to grow a bit above industry growth range for next year?
Yes. I mean we're -- we won't get into specifics, but safe to say you can look at the cadence of innovation we've had over the past several years, and we don't expect that to slow down. So we think there will be plenty of innovation opportunities for us as we head into '26. I think it's really more of the same relative to the macro. I think there's a lot of uncertainty around where inflation is headed and resulting interest rate moves. We're not going to pontificate on how many rate cuts and all that type of stuff.
But certainly, higher interest rates are a challenge for this category. It's been encouraging to see rate cut direction, and we think we're going to need more of that. And I think that will come as a result of easing inflation, which will be good for our consumers. I talked about in my prepared remarks that we're looking at things like the debt levels and things like that with our customer base.
But we also think time plays in our favor. We look at the customer demographics in terms of in terms of purchases and repurchase rates. And we're now past, call it, 5 years past the bubble that was created during the pandemic. And we expect that those customers will start coming back. We know they're using the product. And given the cycles of innovation we've had since those products were purchased as well as time, we fully expect that they'll start to come back into the fold.
So we think there's a number of different things. But ultimately, this is going to be a macro-driven phenomenon. I do think people are looking at next year from a cautious perspective. But I think the work we did this year to get dealer inventory rightsized to put us in a position, quite frankly, if the industry is flat, we still believe we can grow just given the position we are from a dealer inventory as well as the innovation we have in the pipeline.
The next question will come from David MacGregor with Longbow Research.
This is Joe Nolan on for David. You guys had strong success with the factory authorized clearance program. Just wondering if you can give an update on what sort of promotional activity you're seeing from competitors and just how that develops into fourth quarter and 2026? And also, just in past quarters, you've given an update on competitor channel inventories, if you can give an update there as well.
Yes. I'll kind of wrap them all together. We and our next largest competitor, when we look at our DSOs and current, noncurrent, we look very similar, which is helpful because the 2 of us make up a large portion of the industry. The Japanese have been moving in the right direction. We've definitely seen the large promo to move very old product or kind of onetime incentives that were going on in the marketplace. We've seen a lot of that essentially slow down or exit the market. As we head into the fourth quarter and into next year, at this point, we don't see anything that's outsized relative to what has been going on here more recently.
And as long as the dealer inventory stays in a good spot or continues to improve with some of our competitors, we expect that promo environmental settle down. We talked about '26. We're assuming that the promo environment will be kind of flattish year-over-year, and we'll see how that continues to evolve given some of the competitors that are still catching up on their inventory levels.
Yes, I would say there's been some talk of lower promo in the industry, but the behaviors haven't demonstrated that that's going to happen. And so right now, our view is that things will remain sort of flat with where they are right now. Hopefully, if we see the level of interest rate cuts that folks are talking about, that may allow some things to normalize as we get into mid-2026, but it will take a while for that to play out. So tough to really forecast right now.
This concludes our question-and-answer session as well as our conference call for today. Thank you for your participation and attending today's presentation. You may now disconnect.
Polaris Industries Inc. — Q3 2025 Earnings Call
Financial data from Polaris Industries Inc.
Revenue
Revenue is the sum of all sales generated by a company, e.g. for its products or services.
Revenue (TTM) metric explainedDirect Costs
Direct costs are the costs incurred directly in connection with the manufacture of the product or service.
Gross Profit
Gross Profit indicates how much of the revenue remains in the company after deducting direct production costs. If the percentage share of sales is calculated, this is referred to as the gross margin.
Gross Profit metric explainedSelling and Administrative Expenses
Selling, general and administrative expenses (SG&A) include all expenses for marketing and sales as well as the general administration of the company.
Research and Development Expense
Research and development costs (R&D) provide information on how much the company invests in the research and development of its products. The costs are particularly interesting as a percentage of revenue and in comparison to direct competitors.
EBITDA
EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is the company's earnings before interest, taxes, depreciation and amortization. The EBITDA margin is calculated as a percentage of sales.
Depreciation and Amortization
Depreciation represents reductions in the value of the company's assets (e.g. due to wear and tear on machinery).
EBIT (Operating Income)
EBIT (Earnings Before Interest and Taxes) is the company's profit before interest and taxes, also known as the operating income. The EBIT Margin is calculated as a percentage of sales at
.
Net Profit
Net Profit represents the profit or loss after deduction of all costs.
Net Profit metric explainedStocksGuide Premium
| Jun '26 |
+/-
%
|
||
| Revenue | 7,445 7,445 |
8%
8%
100%
|
|
| - Direct Costs | 5,941 5,941 |
7%
7%
80%
|
|
| Gross Profit | 1,504 1,504 |
14%
14%
20%
|
|
| - Selling and Administrative Expenses | 1,052 1,052 |
13%
13%
14%
|
|
| - Research and Development Expense | 375 375 |
12%
12%
5%
|
|
| EBITDA | 346 346 |
1%
1%
5%
|
|
| - Depreciation and Amortization | 269 269 |
10%
10%
4%
|
|
| EBIT (Operating Income) EBIT | 77 77 |
55%
55%
1%
|
|
| Net Profit | -260 -260 |
142%
142%
-3%
|
|
In millions USD.
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Polaris Industries Inc. Stock News
Company Profile
Polaris Inc. engages in designing, engineering, and manufacturing powersports vehicles. The company was founded by Allen Hetteen, Edgar E. Hetteen, and David Johnson in 1954 and is headquartered in Medina, MN.
StocksGuide Premium
| Head office | United States |
| CEO | Mr. Speetzen |
| Employees | 14,500 |
| Founded | 1954 |
| Website | www.polaris.com |


