Polaris (PII) 25 Apr 232023 Q1 Earnings call transcript

Good morning, and welcome to the Polaris Inc.

First Quarter 2023 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to J.C. Relations. Investor President, Vice Weigelt, Please go ahead.

for and Thank I'm Thank or quarter us everyone. morning Weigelt, you, you call. Vice joining Polaris. Gary, J.C. at President afternoon, Relations first good of XXXX our for earnings Investor

today, We is our accessible polaris.com. which will ir. slide at on a reference presentation website

for summarizing are as on our Both Officer. Chief today our Then the quarter Executive well Mike XXXX. remarks as first me expectations your Joining call Officer; take Chief our Financial have Speetzen, the questions. and Mack, we'll prepared Bob

During which Actual the Securities for of various materially forward-looking call, we XXXX. will projections Private could results be the should discussing topics, those Litigation the of the from forward-looking be Act differ Reform considered in purpose statements.

XXXX and regarding our additional can refer uncertainties. XX-K risks to details for You

quarter are refer of All reported are to otherwise schedules GAAP the Reg an and actual XXXX non-GAAP continuing adjustments. at our references operations noted. results to our unless for the basis and presentation XXXX for first reconciliation Please adjusted non-GAAP on G to the guidance end

ahead, will Go to turn over Mike it Speetzen. I Now Mike.

but J.C. hope writing morning, up Thanks, winter. what you may Minnesota, be spring and for your a seemed Good little thank be season in here has today. a prolonged us and premature joining everyone, opened to This from I

can't complain to helpful business. I Although snowmobile too much was as our it

price, by ship versus was adjusted net points year. and basis quarter that my first over XX% strong team volumes is which to Sales and of start, margin Adjusted up a price driven and strong promotions. key Sales EBITDA with the XXX mix expanded is reinforced consistently higher I reflect our XX%. last just were favorable year a results net grew growth that. EPS successful

commercial that discussed half Increased share our marine QX in in great Off-Road of benefit and the in a on-road availability last we start back as in and the and restocking business. the mainly and through year of into balance improved off-road, January.

retail versus American year, versus increased North down was X% last it XX% While XXXX.

seasonality. to for the good return next Our March. despite April which of the teams seeing remainder normal and spring for country in dealers a to season, a be selling conditions off delayed gauge going is a the year. more to months early of The start spring for couple is of an important poor the are given continues weather most

gross expansion for our EBITDA the consecutive saw We efficiencies despite improvements focus our process high to late target can toward suppliers. as EBITDA mid- us that executed profit result margin we margins. We from inefficiencies margin deliveries as of quarter on third closer teens drive expansion and maintained and of long-term a factory

January normalized confidence chassis year, even and in the factories. the as the launch in horsepower, drive of added I gives we performance more Ranger with shared stronger XP with an we by better and made out came of we best-selling in the is side the and exciting to going industry's redesigned to strong comfort. to suppliers XXXX delivery This where ergonomics be an gate improvement drive the me opportunity margin efficiencies more continue that

strong, all-new Initial very QX. in Ranger this reviews and later for of start excited to are deliveries we're

Kinetic, our started now XP to of We all-electric which customers. Ranger is production shipping also first

thus about Elite we're the what of a of launched do Indian its as this order On-Road designed to with Scout lot in Indian far, a debut FTRs, given fresh we've pontoon entering G its specifically strong season book. very Challenger given Our the and be our certainly will selling well electric of excited portfolio and Pursuit first Slingshots Mighty not well lineup. as pontoon, Agari lineup ever most option but has competitive There's should an motor year, mine, a bikes done. with and be

the for that planned monitoring have tuned. should we launches we in factors said, the and we're agile the external start to are rest about year, on laser-focused being we change. could demand strong XXXX adaptable, so the Overall, and that -- environment a stay of our and excited customers, remain closely off incredibly I'm impact

share for trends remains the me soft largely to story products us coming the let some we Now related launches. with affected through thoughts past product and by progress expect as the vehicles quarters. we've over that seeing. in utility this from environment. macro remains mild is use In of less we're these seeing be consistent and customer case mixed with off-road, gains for remains to new demand case The steady what been couple demand as fluctuations the for we XXXX share our Recreation

regardless see start. off to best not-check Pro in a of products and to hit very making is R. including April for category, SnowCheck RZR target, model demand year third continue Star it North higher past and XXXX premium lastly, R for good our years. the our And retail Turbo XX Ranger We the

now has the just season and been we're On-Road, and competitive of have our very entering lineup motorcycles arrived, Indian an slingshots. April has spring as extremely For encouraging dealers selling and

bikes In been we today. where has are fact, believe competitive than we our never more lineup of

perform show longer they Like inventory continues our a improved but of told decision had the our buying given parts Marine, the segments, seem the a team, inventory is and us of road the I In a healthy. other our about due marine they've marine was was to it to but to in end on a the dealers make marine levels. start boating country season market upon later-than-anticipated many boat taking finally is customers of to be with well. successful high some season, the us visiting weather, recently and boat

trends also a and we on keep close eye credit addition In that trends, with customer customers. lending see our to we

reverting metrics the levels. metrics. closer with general, In we're consistent to we monitor prepandemic past If anything, remain

data deviated back retail As metrics scores, has the from dating penetration, finance follow XXXX. which our average we materially FICO and approval normalization key of are within continues, to rates each not

that dealers our These customers. comes credit to these and to finance piece Our we're partner banks. our are business from partnership partner provide about information to comes purchases of and banks retail quarter from of key information with sharing banks one our available that our today the

consumer relationship our me our truly have we very and provide our They As with appreciative to credit captive capitalized, and strong allied available. help say of so are because do in financing are you've we partner important have many closely banks financing we arm, our willingness to network their customer well times, these and them work a with make experience. dealer to exposure. strategy best the are and established, relationship risk not minimized are heard with banks These well

us key telling volume, and Lastly, we're happen. banks they to want are this dealers more with working partner our these make

than Regarding I'm in as we enter we've our dealer say a season. healthier We mostly been much are in time. inventory we long a selling at our optimal is to prime happy position believe inventory, targeted levels that and

few enough exceptions constraints are coming and have XXXX, optimize dealer a looks were inventory Year-over-year, do build to and But categories. and point We where remember, given and from deliver to dealers in we're across product. our all number a starved working chain supply inability inventory staggering. the of

data as normal this numerous excluding for improve. shows inventory XXXX. our more trend XXXX, dealers typically look our first be Relative anticipate closer seasonal the snowmobiles a that getting returning XXXX inventory quarter from smallest through at is XX%. We're you levels When signals and is XXXX, own to the about the and to down average off-road for we case North quarter, vehicles, to American retail in we're

the jump as retail riding season and a weather see sequentially from and seasonality show QX sizable performance Historical in that improves. we typically begins

performance this We be the expect year, assumption. supports and April this to case our this

The of be to strong the more well macro headwinds. in of a jump start the some is expected QX a QX in magnitude as as to muted bit due

our shows, in suggest similar that our and with first into our bottom followed a see line performance, history expectations. with The trending by chart is the a would quarter As was performance is expectations consistent would QX. we line quarter April dip third sequentially that

remains systems delivery. efficiency Although our and to processes enhancing focused internal our team challenges improve on and remain,

inventory year progresses strong the big with healthy innovation share and We dealers continue ourselves to gain position year a to launches. product as in see at and the for a

consumer as vigilant We also we remain assess trends.

While the the team significantly compared optimizing committed business. remains agile and nothing of to expectations, couple original our and past our quarters to has changed

strategy recently announced our committed remain on to plan on delivering Analyst Institutional on during we Finally, X-year provide July our and Investor Day a to progress and comprehensive our update XX.

and who details XXXX, I'll provide summarize now to our including balance Bob? over of will expectations. first turn it and Bob, guidance for performance quarter the additional

morning Mike, today. or to afternoon call the good and on everyone Thanks,

to achieve we of and us be going results is X-year in year margin share lead targets. capture, first strong believe off all to Our the for quarter a on forward path kicked which Polaris new product launches what regard expansion, our to

we performance percentage point number from X XX%, earlier, from grew factors, which Mike a a mentioned saw expanding basis strong our Sales business, execute to international XX% segments grew of driven versus its with basis plans. over by margins, impressive year-over-year, including gross On overcoming currency. all margins drag On-Road points segment expand an continues profit as XXXX QX on points that XXX XXX profitability

Turning to our off-road results.

driven increased the 'XX/'XX the PG&A a had given last Sales recalls share goods in season. we unit. recently by which retail gains Whole board. per point XX% share, expectations the concluded rose to about to with within our $X.X stable season exceeded gained were Off-Road relative snow, XX% across increased billion. In year results we X the and accessories early

Retail quarter. trends actual consistent were down performance in was with the while quarter, industry last

ATVs healthier new our to by of Our the portfolio were year. share outsized driven throughout gains off-road With we expect general entire inventory innovative side-by-sides. gains share across gains and offering our continue products, and in

which price double-digit cost Margin of expansion costs lower saw backlog. higher utility included growth a we drivers warranty and offsetting higher and recreation, to finance continues interest. net strong commercial, have premiums in and Outside

product they straight International but Switching both quarter our strong margin gross to profit retail and driven our meaningful expansion. was noting It's in favorable Motorcycle XXX third of record was by and Australia. year-over-year, Indian while On-Road Aixam driven to had sales higher up product healthy basis European drive flat gains XX% brands, relative mix North and worth sales On-Road, strong XXXX. margin face they Indian points were to volumes. motorcycle our portfolio revenue American by up Goupil quarter and were by headwinds, continue share bolstered inventory.

in in boats year. quarter. times. as and an Marine well recent gained we healthy, our driven like for Marine the shows more that continue took inventory is the first operating are data pre-pandemic last have during to share Sales pricing Moving environment preference most we by we actions consumer to The feels as be segment. premium we

we Off-Road, they to return boat enter seasonality are a currently Dealers the increased in successful retail which selling upcoming and believe we season, seeing the pickups. of positively Similar registrations believe show to we we impact timing optimistic season. are can about while terms as a buying are of boat it and was the seeing activity promotional season patterns spring

XXX favorable was points up net basis higher being mix Gross product the with pricing was and primary up drivers. margin

Moving our financial to position.

the balance well for and previous to continue relative strong X.Xx. We variety a in our of believe a our XXXX. scenarios see be years, and in market continues healthy leverage Cash sheet We competitive in broader we the first capabilities ratio sheet balance to are spot to quarter were advantage. a generation net at cash up generation as with in our set

move to guidance XXXX. for us our let expectations Now and

speaking, you expectations. details, across Broadly in what January today in are seeing XXXX is expectations original line our the giving our we segments first provided that with they same were our more are we Before when as guidance. today should know

results quarter expansion, achieve sales, first which and us gains share margin goals. reflect help in full our Our momentum year should

long guidance. cadence a to be to for planned continues have Mix expected remain be a there contributor is continues sales, to positive our the list launch to a of achieve Regarding given and and bigger we the Today, of from new a products our launch in half back contribution mix track, enter product remains of the remainder on category-defining those as year. the the calendar channel. year the expect we opportunities

levels the year inventory and product expect to throughout gain the of with launches. healthier support We new share

a do So anticipate the even to share we for we a retail industry better year, gainer. as bit though flattish expect

optimal to us positive allowing As inventory earlier, impact we Mike is the expecting. near share were levels mentioned dealer realize

continue throughout We spoke to about just that year, robust in also our in as we business saw growth commercial first the quarter. the and expect

drivers be this of sales to from FX are Our Offsetting PG&A of and expected year. businesses contributors headwinds the these to strong and some growth are continued return promotions. international

given conservatively markets, at levels, our should FX the but are rates see We a in expect the hold we current planning their tailwind volatility to plan. FX versus

along Drivers decline lines. year. and For adjusted throughout and margin margins, with at costs include we will mix, expect volume EBITDA modest our expectation the continue input gross the expansion to profit that

input that diesel right in have costs rises. financial While are our at around impact most point, this an It and seeing are the this year. operationally plan the journey chain, But things is many direction, not to we they expect year. it the but steel for moving and on important expected with right going we are our there things to and to takes throughout continue understand supply are time,

continuing X% with of the higher most down by from is be expansion up from margin in range EPS operations consumed Adjusted potential X% expected still of expense. a to the drop-through being interest rate to

second things note. to the a of quarter, couple For

which and into sizable are historical seeing sales with We but ramp the not quarter. return usually translates patterns, in second yet seasonality in shipments in line a sequential

into timing second shipments, over first quarter. sequentially of the our quarter expect year do to We in ramp not due carried sales snowmobile this our which a material

history in first expect to true the the is half rates the XX% annual from we that if this hold hit we quarter Next, approximately FX with line of saw derived negative in stay The reflects constant. second in and cadence FX this EPS to year. our what is be expected in first the year, quarter, of

up, QX to proved results be strong year. start the a wrap To of

the for thoughts. expectations our consistent Our year with remain initial

is real year With on we remains chain, chain expansion our as supply this drive thought, as supply and than margin are and to believe the we beyond. Although it seeing focus improve. in investment progress we the processes continued internal and a happening there opportunity well efficiencies slower

excited remain they this product future remainder as launches believe year the we for have and can year as contribute of the to about We growth the well years.

share to are those innovative products taking and our play are work and winning high-quality deliver to ability and We committed to outside. through that

as a we Our the are we remain inventory. selling in enter XXXX spot season, teams with agile good and

our grateful out to close this help are on in first excited and be X-year the focused about to we initiatives As deliver are quarter, the we position we strategy.

the I'll the over turn that, With to open Gary for up questions. to call line

Wolfe ahead. first [Operator question with Wightman Research. Instructions] Our Please Fred is from go

far to half come sort just I It numbers split the for sort right base Bob of like still The to first wanted suggest XX-XX think about of But the comments as Street would to as that of the sounds the XQ way made the XQ first for half second touch is on also year. year. and that half, need down.

like of maybe sort the little of we XQ macro So year sort things. might bit can where the just FX headwind, the you sounds be back of outlook a missed implied and walk the half It but through environment? of a then stronger sort given of

Yes. Sure, Fred.

year the in in product. December, and add recalls of because shipped in of revenue January, really XX-XX got late we of the started volume think year, a more on it of some we holds snow is more to we right, it the we bit the it. had right about split recognized to the expected was So the and way When ship had into February

So cadence of the off knocked bit. sort little a that

shipments the saw QX -- in was then but because side you'll bit and heavier of normal snow will snow lower won't little by side-by-side mask QX, you in what that a with in more ramp-up. see shipments side, So see you that of

does down take So But seen we to at the beat a in offsets the I but normally part dynamic in at now, QX have climb it it that's play. look really think as what for would right of QX. the really hill that's the year we bit,

from XP, the term products what more not really thing the highly products. number in And and really got The those is They the products weighted other back out of coming of Fred, to half. timing new as I mind are that target the mentioned, I aside keep into our is would categories. other cannibalizing deliveries as the we've of existing new

a be obviously that part in will that second so deliveries. half And big of ramp-up

was penetration you rates I'm you to comment into sense. maybe moved super then if helpful. as off did landscape. XQ. or just the wondering guys provided you scores Make see dip quarter, But or you sort either that the I'm And March? in throughout approval about April? The ask gave could FICO this financing Or if of you retail wondering for slide

really their -- all talked data been are across standards, No. and has all down payments the consistent banks they I past, to the we've lending mean about consistent that's really, where with and consistent it's very the with the board. and remained

that more slowdown if I financing, normal our XX-plus to there's all side, to think step in see fill the rates in they've return why more and money local So and very place into levels. we that's kind you'll and space. of any partners have lending continue in been aggressive more it's bank and on the to be gap interested able these up to percent very penetration are

Their things And levels layoffs doing step right more and Our about and in few don't primarily at back tech aimed which done a necessarily hear rate track our years. economy areas to promo, are things well they you buydowns our the have is high up. now, back are to to tend that. on are, over customer to centered past be income base. around largely Fred, When correlation put who category. into about you a They've going attractive we that customers the and think the got

of remain and customers this healthy. heard So increasing. at we've our the consistently, once We've really about customers activity businesses. the weather I this and up And all remarks, my point, in as talked seen pretty the opened prepared from

an grab I impact, the those our you're So see to are in, business. finance going to of why that's we think the weather and even to retail pronounced bigger had piece customers think coming a looking and partners

go Altobello question with ahead. from Raymond Joe next James. Please is The

about want question guide clarity implied for get some Fred's QX. on actually just more to first your I

mean shipments other Feb there delay QX. I'm why quarter? experienced But that forwards why snowmobile you to impact little So unclear that a the pull December I to from I would understand would as Jan, QX. boost this in were

I QX if ramp. degree, No. would normal seasonality to was look trying sort What compare seasonal to you'd what snow you history shipments. some shipments, normal a ramp been were those snowmobile QX high if a relative unusually from 'XX to say to have is you at to But was, see bigger of like the that of the QX, because thinking

lower. we'll won't looks as just you But had snow sales is of more because and And off-road a we ramp and see those in so just the more QX revenue motorcycles dynamic real side-by-side QX. the big units ship in pop

also But Okay. to implies down earnings well? as going be in it are year-over-year QX

by Yes. driven ship. last last year, everything QX I was really ability mean, year to

So QX we significantly this QX in where was year from last shipment our were a lower than standpoint year.

a into make little try bit up riding and QX QX. in more had a channel to in lot and shipments because better had season, getting we this whereas get we better QX, inventory to we're the sitting year, in So

that's have make in the there. dynamic up hole much So of We QX. to an as don't just inventory

dealing just and that top on foreign effects that pronounced interest of And last that, the exchange dealing year. in rates with . you're and with quarter the second of you're earnings decline versus

could looked just us retail. last like? Got quantify for It you're have positive there. Maybe sounds one like April you And it. pretty might that what on guys one

to even know could. early saw is it. You saw things given of interest going did you I that The the availability into a are back that up, that been mentioned dealer daily weather units confirmed And improved, is back retail and think sure right more do We picking that started little do what going different earlier, that higher buying we make weather the part we've they're of consumers are watch improving, once the and I business inventory we know it once frequently if We couple dealerships, a that. process that and to momentum will definitely March. rates, decision. things would with I'm as really doing in -- not has making viewpoint. the do bit a dealers meetings on council watching our had I obviously, us we retail suppress customers the playing the we've basis. just coming there's But to obviously tell I

it's Boat about pick now. April. but we a on the made about more what's We're time. inventory not feel so part what going far won't got I right buy, their And They've they're and the obviously big and -- in through to business financing that good we've just from, plays seen comment they taking

Please The go next question ahead. is from Craig Kennison Baird. with

and also We the got fulfill bigger outlook? underestimating to get What and lot gives questions actually expectation and -- guidance you potential product We've are the have we from confidence Is about it. potential you're product a in -- or of tighter to recession, retail are not be underestimating although a for we credit, flat. cycle investors we way? impact in availability really demand that of your flat the ability a seeing

Yes. a up it's for utility of the business, stable. remains would which makes few mean, our say volume, of Off-Road one, I the there side demand about the things, Craig. I XX%

commercial the on very it's strong. fact, In side,

And gives sell-through. are channel, we confidence those out the retail or seeing so availability products get me as that we into

hold so obviously that tells an anything us long gives anything there and that seeing as differently, And that to confidence. us as up market we're there's frankly, not continues element that

recreational in it. about existing talked we is from second We're our not products. growth expecting category The the

little things available, are that, the be just and continue on. cost is obviously that's a discretionary Even anticipating credit consideration. a to there. going consumers impacted strong we're to if obviously credit slow given far more purchase is So of a what's by

the this for do have think utility probably recreational year, underestimated. being a both cannibalizing bit not a later are product. They're I and But new largely out elements, coming that we product

talk of segments. growth believe we that, the it, organic that top result new pretty didn't markets, you but in about of international Indian same considerable on the comes had and add means really across growth time, as even board, number those And for growth When we we defining at our excited but redefining about business. also our much the with a we're that we what products, in but brand they're particularly new PG&A So in segments are, in Motorcycle PG&A or launching strong of options. a off-road

example, when for at that that launched the So XXX to out close They did. the came RZR were all-new same XP. moment we accessories literally vehicle

puts And in to good when environment. least you all flat together, pretty so a factors us environment on at that add believe execute those we a retail

The 'XX to or is other think the a was availability good everybody thing is keep is either as normal bit either inventory in you at, about retail, still retail was a year from which mind not than looking comp 'XX it perspective And an a lower XXXX. perspective. cadence

we're you if year sort full So relative the industry, 'XX not this XX% cycle normal of think -- not as comparing to -- Herculean comp comp the a XXXX is last number. for relative of

kind where a were unit prepandemic, you standpoint down we So look it we're from from of versus already 'XX? if at

be dealers? could payment their I sharper monthly given up. the average actually have given on Are just to you the unit more follow Are If seeing selling you to price from like-for-like dealers price a maybe competitive down for pricing. and track retail able a maybe tick sort of

a rates a is two obviously kind down play a across I the at finance news down as little taking bit, of increase the point, expect -- Price bit ticked interest up good offset pencils less there. during most So whole bit. industry maybe would by margin. their say people little Obviously, well shepherding promo much dealers, of have that a the pandemic the pretty finance were you've brings that in amount would full margins. doing the little to kind I your rate quarter-by-quarter. got little rate. that both dynamics as of That and the the op

a if dollar range, huge month But But that that when stabilize, start So get that's X the I a are the have really from big feedback to the is hesitancy financing It's to and headline that's used in rates yet. to the of isn't kind not the just impact. per more small don't dealers a don't buy. maybe driver. shock rate people's the will the know having that people rate impact driver They're the we -- products. plus that's of on seeing

some consumers out but impacted that with you were articulate how we headline payment from And rate helping from they're for us, significantly help, -- financial that, differently but when about Yes. the they're looking a do may selling. so impact were standpoint in think to help dealers, they happen not is how to really marine necessarily be the not monthly higher,

The up -- talk about areas discounting Star, anymore, was product, that it still tells levels. I'd anxious that heights went dealers we're and still inventory the get marine, But much we at it's you come centered that -- customers pandemic. better. that's the the significantly really, for optimal pretty don't that's the And presold to really around end that North not just like where are of And Ranger good whether because other but the is Ranger, thing still and from amount financing that that that obviously relative it's to down order not maybe that has rate. strong now and is they book customer the is of be made customer R Turbo had inventory to where it's the it or before minimal, we've out business, tends or R, that the do that sensitive remains very a to whether off-road the North comments affluent Star as true, the that high have to that's Pro we on-road the around our the more

those where good now. So dynamics stand about right pretty we feel

UBS. Farley Robin is ahead. question Please from next The go with

was clarify just that positive year-over-year? could you whether Or QX your though, continuing for you already a it the just know bit. thinking Just April to would that did expectation when about say context to indicate you has up asked in it's were like little have retail the if strong. you It quarter to I that year. about. share? seems wonder for I just Is the modestly. retail going to the be flat been be And grow of mean

or kind here don't then where there year-over-year? expecting this to is later that QX, it see so quarter if up a -- year that retail I QX be know of now And you're would

Yes.

with April execute X So versus obviously, got And say to up we've I expectations. this. It that's tracking that our year. X months would of is on. is last

So stage, it. this at we good feel pretty about

I around think make retail. the on to trying quarters steer clear of probably we're going to commentary

quarter, first as we recreational shipment quarter, happened there it getting One, that, of I'm work in Really, our We caught you as or what The was fair are expectations. them. retail difference done holds. still up things. that well number those. our did a holds later -- the a some of the couple in products had know, of the on that was happened But on clear sure between there and

second we Ranger And inventory need earlier we're standpoint. the made that a then still to is where be from I point not

know the fell so at And area know expectations, product we that's purely where around we get product we we it and dealers. and our that, was an some short retail, in that when at having that of of

retail, came improve, a go seen both up relative also that I in expectations improving correlate not weather of message lot we've of availability cleared So timing to the but out only effects continue and is our the we that first sequentially quarter. as there. to key think product But to

around color helpful very that's QX. No,

commentary your retail Just the a about partners. quick financing follow-up on

how given where an where of financing. play? a broader if finance revisited consumer Is to on partners? concern those a want parts annual would of with different the time get in be how come they for you into your space had retail in like the about what's view environment, aggressive have new terms would that they contract of particular there's Just there going credit terms much the in lend change available when Do about year consumer

mean, and are There points. different competing but there unions those X other. with each of all business, the are and contracts that expire the But of they're is having credit they multiyear not I competing Obviously, Bob. renew are benefit with it's Robin, they at the X Yes, are part -- partners for only partners

They're And monthly. credit keep approval commitment we helps with signaling And lack them about the us that, so meet And with that, of to finance feel but not and frequently all think of solid where any group. meets than credit aggressiveness strong good level I changing monthly terms are. a market. the with team that the speak appropriate we they with more them standards. and They're I availability their not

FICO consistent. scores very Our have remained

income over their up XXXX. Our XX% versus earns well and average consumer $XXX,XXX, is

pretty a the in group business. like to finance the strong banks it's So consumer

The not our customers. partners not so road. Robin, heard as about down path the used setup middle it pushing about the picking penetration thresholds it in past, what of their we We a there in and obviously sheet them up of to really and provides church conservative. go only compromised performance me And that's the thing you from as good a balance the we're as X puts too you've which think have, their in us say opportunity rates we've that they're are it -- with is position the really see very balanced playing and why contracts talked in a that for puts them a I incentivize to separation, we've that before. I have state, expanded like well we think it

go Hardiman Please from is James question next Citi. ahead. with The

and was I on had about a question or you maybe a the on big retail performance maybe as gap, sales is, the the right? It's goods not on hoping XX then Obviously, retail maybe bridge whole up guess, question start XX%. and walk death. sales ORV was us reported performance. contributors sort reported down pretty I number. I I apples-to-apples. of think the ASP through quarter It to that then big outlook. maybe the could that, particularly were that's never but with off-road, ORV the

well. it, channel I'm I'm mentioned components helped that as there fill. chunk of good obviously of ORVs. gap. the with assuming gap was make then any sort think of some not of I And snowmobiles I a regard call $XXX missing to to you just that increase sure want probably sort was key million But that

broad a Sure. and This is here. Bob. I'll question pieces couple take that of

said, get make. We high-demand out didn't there make more about quarter, you retail make made on Mike starting ship we or vehicles ATV think some Turbo progress are some the new hoped to R -- about the new we razors ground as quarter. in and range some think did progress and Pro And we're inventory the to you just now, the but up the we started R relative ship, So if side. the we those shipping to really in had on

and And relatively close, were up Ranger, made retail shipments so group, but for not a of bit little a lot.

a season, it's like it. are on and Ranger. -- I the getting year. channel ATVs, is out of quarter said, was the little had we that another out of most last bit this The the piece primarily better We getting there, chunk. from on So where it -- carryover had there snow AFPs is part of a the inventory ahead of

last increase -- in increase early of was last our major price So year. price QX

more have So side. do on the carryover pricing we

So double digits on-road and in mid-single are in and up digits off-road marine.

us X% then the if math, on navigate maybe like and are the did versus maybe were 'XX. place. just Bob, And help the over it, you touched up all we comparisons ORVs

What we they I while up be think QX the in where I but is think historical maybe up you year-over-year of sort but a sure QX know know you telling make here? guys don't retail, that exactly? are to it's is, telling retail not on guys versus understand, you good retail you I it picking second think guiding above you're sort if I talk quarter. love were sort to X, Slide that down of be I'm that lot average. basis, about a want just of to us slide. relationship I hold a would know putting 'XX, I expect us

were probably that was I is we for mean, get mean, trend I -- slide across a trying what to on composite. that retail Well,

point point specific think a we've to we'll have we pockets still that's have working rightly like lower out, that. we than would pointed inventory where inventory point. we're about where dealer comparison terms that, and less was be, trying side at And it keep that, a of demonstrate business is Rec But was which ignoring largely more saying we'd really, about, to it I So where given probably you we we're completed in to talked we're seasonal, isn't around not other the it under macro environment those because we're the definitely we've of but our have it's discretionary completely more the returning where where the broader be. pressure to purchase. returning like -- on pockets inventory channel as But we as just fill, not to although seasonality

awful time So talking then we of help understand have to I to spend take quarters people trying and to it lot don't Again, steer about much movement want because retail doesn't quarterly between an that. into

is as the delays had. we broader there's think from a I a And of QX yet out we've But to play time, QX, couple another we into a get will I example that go. months at think got prime us of help some the given economic to same lot perspective.

if maintain get do clarify, we probably maybe to were That's the sort versus going to not. you of just to wrong if the us math But plus to X% or of XXXX. answer

the get year, use Well, wrong a going would 'XX. to definitely and plus it that XXXX to if flat answer bit the we're the was to good you through X% the be you and percent, carry XXXX since math of rest of

setting it's -- a availability, say same 'XX. product will the was going to can still you and seasonality Mike's take 'XX that's by certain Not different, it year that in say still is that, the can't think work in but point, a while as up through that that. to there's be don't segments I to of in and impacted continue it's that little So to the happen, market, to

of the So well relative for there's sales environment. really seeing I great rec to Mike a to get that relative not that XXXX, anticipating sales dynamic and and we're -- different. the out 'XX. people have And you're as Ray bit a as rec think, pointing was, 'XX a little a is ready in higher given And season level spring utility also riding. just tends to in macro year do to

versus utility that as So has well. remix that impact

with is next Noah The question go KeyBanc. Zatzkin Please ahead. from

relatedly, hoping you redesigned out the XP first, And on color some I as relates guess elevated product. RZR somewhat ORV? it that and you hit where to within called the then could production provide costs

of kind related think approach. dynamics margin I had more favorable to modular you the mentioned

if product. that there wondering to Just year related be thinking benefits are to this about

that I'll targeting. can we executed Bob I would The of got that out But Well, a in QX characterize resulted happened more were let into we general, we specifics. issue is the is inefficiencies. units the get lot what in largely in way how

magnitude the near late. had So we've delivering we still were because same historically suppliers still building that product into rework, nowhere are

about year quarters. year before, the last talking months, supplier sometimes we delivering was we said and Now late, a were when weeks,

within that is And that that's margin that. the we're the it so get in it Now we're able what happens, product it, the show suppliers but of in down. late narrowing that drove still talking as manner. it And to are in are still come with and weeks, days what is continues teams going to get up not we're incredibly And gross means about working an to out, efficient doing The our largely We're performance to number the ability plant. that obviously down. really and improves off-road our efficiency business. vehicle

play that And when obviously, As guidance. to say that and the add aggressively embedded we as our assumptions how are essentially to look forward, work to out. it's list those going we can. of continue in to will tough we're did as that We

sure efficiencies laser-focused Steve Menneto we largely on and making are his Huntsville how deliver we're and It's driving that as on to as us. suppliers in can. dependent quickly team Monterrey

we're backwards that So time. need everything suppliers to make on working have sure to able deliver to they be

Yes.

curve. exited in as kind quarter, been had prices. long to a about, the direction just I Mike trending QX, there's term, inefficiencies, sort steel in talked we be down. were taken diesel. down what again, QX up It's But of will addition Probably Same operational bump benefit we to been towards start any but coming a in a that steel the of trend that saw from with in think think the thing It's of in and we is forecasted that expecting QX normal. steel sort won't change positive in coming by little. we back

the a on of in it's benefit had was come ocean side. a slower bit turned There little bit freight Those haven't We but anticipated. rates favorable than it quarter. down we the seen

full But overall, than going negative some had takes the on more we the rest it's change year So that's of just side. but guidance. a nothing puts little to expected, our and cost

that But project the we're X work benefits doing. of on that the started have would new then RZR, it been probably vehicle And so was from degree nearly some ago. modularity to some years

new We with of items So to benefit. and it's across given models PG&A had. Mike multiple that, see we market, talked the margin in be consider which to the we've some about getting better, our the good, not the it. having product range from new benefit I expect historically product XXX best wouldn't launched philosophy. that But first full a do of hadn't sort what

MacGregor is The from next David ahead. question Longbow Research. with Please go

question margins? And I And is there's more been past On-Road are wanted the made XX.X% much tremendous here gross But there XXX these up on, sustainable a think is we clearly, margin, everything mix, maybe segment. the upside few margins just amount progress the ask the going else? over how to more about years. How to important basis is points. given of

about, obviously, have margin Slingshot, but segment this which Indian of performance. both in the businesses over we Goupil, a of have -- Motorcycles, One, also things. say Well, France, that Axiam which includes I'd couple and strong couple a talked of we've

there's that strong us to The about as think we expect margin we And And is couple Dougherty as way really path to forward. they're going the now products continue when takes I the businesses real we out that time good really all hadn't you for and Mike laser-focused make get done to the growth and the years. focus or job or both, an that, of about profitability businesses Slingshot about for that are scratch past, his to time. progress we other. team. meaningfully businesses Slingshot. on. improvement either we've whether both to that one we we've suggest be They've it of and of these the that out. that meaningful essentially we've element is we from an opportunity opportunity need Indian going on in over team we essentially with made play past there's that for is driving with And and probably to opportunity talked those wouldn't Indian, the brand-new a that of as got efficiencies think move that's to those talked The execute performance over engineering there. the So started go It's can continued size brands those And around and profitability.

We've initial assembly Europe for So presence expand drive and continue operations a got to like look in down in-region for going that your or is presence platform globalization. investment a Indian our Opole, to continuing Europe. fastest-growing takes that to in We motorcycle meaningful we're delivery. Vietnam. we've got We've got market in Poland.

ability all in So and continue really those things continue business, those we're expand as margins. the to we to grow confident our to help

Congratulations impressive. on the progress there. It's Yes.

a the from today terms we about commercial talked to and Second about remind Can about talked size and of really you that that. just I us business the you in just the while profit been since contribution growth. it's business? guess question, the contribution

for responsibility few it made portfolio. we we get the changes to the a past it's He It's Bob for this operating be have before Yes, segment size. all to the don't great the -- Ranger out business over well. necessarily knows turned into years. used just

Ranger bunch of a You've out came seen a ordered has press kinetics. and release that XP United new Rentals bought the

commercial continue some of and other and have with we're the strong with the programs We next grow will space, we this us for the help strong backlog really order the to the contracts, well. great partner operators that's have And several for couple of underway to looks this development as confident amount in and continue with in business years. year, that them and at least infrastructure a relationship

Morningstar. with The Please next question is from Jamie Katz go ahead.

I one quick have one. just

brand how talks your top for switchers competitors and of a One line. that and supported growth has the bit about quite entrants new

base, you're that's new the or a switchers. attract So brand and is space how can currently what little your customer your to sort seeing evolving ability give insight of into what from you guys us to entrants

Yes.

new the the, about at mid-XXs. to were continue we low it's the the call think still not levels in to in had But see customers I obviously new of pandemic when represent incoming -- we XX% customers that volume. the it,

a to And point, friends done family vehicles out folks know lot. is we continue we've selling on big a and that But so that. members, taking leverage we our word-of-mouth

that. we're In of fact, people was the see starting location. And just volume last out was in through the It activate particular month. at ventures that in the going to to management it team locations and of our now were staggering. upon Arizona And one I incredible

So building subscription vehicle. more which them either a Select, of relationship a with those into to a to Polaris a migrate stronger program is customers Adventures or buying

the people coming in. And use how We've really aspects that's associated a they to think of use lot sure making to how that, done continue opportunity that. safely to so and a a aperture around into to good with all the the making lot the sure understand load vehicles, a category, vehicles, different bring with we how educating, to new new them people on trailer, open the

has we've So to it tried make experience been. better that much than ownership

beginning on experience them heavily invested And the it work of game in customer. of get to rolled at their terms through make We really interact lot our basics. frankly, the the to to they dealers and customers up easier get website, we've to done just an our year which with with in the of we for how out a get

the X-seat to through work which Someone want to category get them are more X-seat? We or challenging things, experience. they walk be to figure a pretty new we've of job before done an a doing into Think that a that. dealer, and need. even a vehicle help they out good trying all we Is to Those what have it can really intimidating

cover segment. sure going And point that spectrum. say we at high I'd is last the to end of the the everybody have is then Not in the making vehicles come

used the a have done single then big vehicles. largest make I better, to work we've the on to used the introduction entry-level for And lot R, out but launch more Turbo mean a XP So may now And was the of a Exchange are of of accessible, of RZR or source getting lower-cost way way vehicles. vehicles it move. Polaris in an a that tool the them people bring inventory, and to to versus we more S to spend good Pro gives that to important XP brand. enter of not where may a that need those auction. dealers category for used are an And to a it really dealers into money that tool want with new off we're Polaris you that, the does spend we the know vehicles out sending becomes those it that controlling or get efficient to Pro just Exchange, new be

I follow-up. And one then actually, have

sort debt capital that, think year. depend you're whether that this there about some thinking what guys down? talk does it allocation later opportunities is due Or you the Can I renewing coming paying about of are? on

Yes.

comes core term So the due the fourth $XXX quarter. in million XXX late loan

share will to I will that we think that refinance believe do option the year Certainly, come through buyback either or is we year rerolled if money to where it. available get the or we to have be progresses. CapEx, due. of But the capital couple We for targeted the that it and pay use use off that that the times as last best But unfold it's M&A. we'll the choose as decide at take look and of

from next ahead. is Capital The Please Johnson BMO Gerrick with go question Markets.

was a morning, was look to gross it floorplan how What maybe of like quantify compared impact? interest discounts for to change that Can promotions, the sales And and same What there? gross you impacted net? as did I'd This ask the percent contra they Bob. the how last year?

Yes.

finance last minimal. year retail this side -- pretty in So year was finance the of terms versus side of impact the

the million side again, few about I'd total wholesale the On say was, -- a million. $X

Okay.

$X million greater

what right. talking quantify from easier. All was always that math to Would shifted you Great. XQ? since amount maybe Okay. make shift, snowmobile a XQ about And little the our we're the could

few think in of would sleds. terms about a thousand it I

question is go Sabahat Please next ahead. RBC. Khan from The with

macro course XXXX. less the boats more think kind maybe over evolve more the and the of is or just how do could you or some you you perspective about share to boats dependent market it the side. bit backdrop, on the And that little provide just earlier. of generally in hoping comment specifically the a as on much general just expect in speaking, little a was talked Do on situation pontoon I You pontoons.

we did Bennington data, through really although the appropriate there's look, coming up for reported. was opportunity I last gain I We been really which were expect position, SSI back mean, be there's there back data, to that, on levels. I the mean, basis, done I Bennington, pontoons about range. think applied work at. encouraging. see inventory Obviously, the a Yes. we that Godfrey over in XX% that haven't and share up be number getting to the the bring states at The share. the years in feel was done good of of challenges. some mean probably going obviously the we're you to is now a being down digest been trajectory work consistent and in gain to a couple March pretty saw can that's that On where I really us a that's relative but

market going year, gain really pontoons what's we're So to a deck position relative going think business on brand broader even including good we're the boat a perspective. whether this it's to in just I to Hurricane, share right? or But run from the

the us It's the has and a over very end the from of brand. share standpoint. of Bennington largely the market market. lost at of very high last The lower strong share We've been the strong been couple years in end for

those some feel a position, more got we go well. out that lower-end So us competitive to and of the opportunity be and we've laid reinvigorate boats is really in pretty for like

This dealers be one. we I looks like the just on right? here the a of reading kind of may sense this this point? absolute in inventory, But graph sort at right levels. is guess post-pandemic, of Okay. makes about detail it's just level of Great. inventory of to side adjusted lower is inventory I for understand with pre-pandemic want thinking inventory higher days? Slide about how kind I dealer And the are think thinking then not units. line in it, sales Or just quick level should It a back of days of just it X. in But one

the level the an each we Yes. mentioned, XXXX, is best spot. the made a be. the business down below that about we that the that still would about pandemic fact inventory in really mean, of the think that where point I because mean remarks relative which But different of we've it's business as got in is is the tough to level is prepared optimal impact I baseline probably RANGER our I before XX%.

stats, to And should a there's customized be factory put presold And some the statement that level to going consumers to supply carry choice because have much we're be have desire able through historically. as areas product around able our with to pretty there's you've carry a basis to probably get people going to more near that's ability still a do we broadly that be in to a of deliver mentioned of stable got than as on some the vehicle. where and offerings And the see their we more a a quickly in similar the I speaking, we environment, for and But of we and inventory. be with relatively to closer to going don't as meaning to generic hands have as want touch vehicles quicker walk we optimal, as to to past. believe in

where lower closer long-winded now. the think before pandemic, probably were way say going should to be we that to than we're where and think levels I are we the inventory they to be right So

picture could your squeeze press Obviously, new bigger one release just electric If a maybe yesterday quick on of right. and out Great. All kind I one. just offering. a

longer-term As to you over that call that to it, the is of think opportunity Is dependent? something you backdrop X about in is entire if invest macro continue regardless the happens here only macro in? the of macro X the holds of because years? development business, you'll next, your something the of that with continue side that what Or

absolutely are the Yes, surgical very a very this that are business so the forward, costs I'd starting to But we're electric. business. answer in cautious long manner not development sure mean essential. I includes term cadence. is other on. making we've adding we're the ambiguity stopping not the just lot strategy into for on that we're Bob, my It's consistent where managing that the say And the is pushing business to compromising specific myself this EV. there's as the investing not leaders strategy. for and business unit sure a investments well And our us being making on product as about pretty and we're that strategic making keep we and around But agenda key is great we're from in things technology our sure a which a standpoint we're got that execution then obviously of going given

from go question Please Xian is Siew next with ahead. Paribas. BNP The

the way about another think just to revalue. Maybe

typical should of in still about it? -- steeper we kind quarter-on-quarter, mentioned that about ORV maybe I about approaching I up last guess. the back you some should than -- last availability Is ramp was how be XQ so mentioned by this XX% seasonality, retail XQ, year, year, and held that was limited should thinking guess think You

so We and retail okay -- a muted was was year, QX retail -- tight. had muted. relatively from poor The relatively was ramp last both -- shipment

got about returning fully when to really seasonality, not we think it's to say seasonality. You to it's back

doesn't really the what quarter, early in So comparing to 'XX shipped that of over purely the part of 'XX, related ahead was tell and through you map much kind in to because we it's all the from that 'XX. it quarter 'XX very

is rec utility more relatively product year the and seasonality because think higher switch of to retail would We open. and to with going little muted side significantly current shipping rec into pressured starts be would season between that's given than stuff QX this and the given be rec environment. QX just macro normally, the the channel that as be rec QX a in the more ATV, we'd So for it that RZR, then

it changes bit. little So that a

would compared QX. a We had of normal in have as been to kind retail which season good 'XX, more

we're retail it's a being QX, it's to just was we of So look as that pull or at -- cautious forward better knowing sign if a not come. if

be not steeper I at the think I you're be ramp So think would it if that's how will wouldn't looking -- it.

gross there's margin, quarter-on-quarter, can then it Off-Road some either maybe about And it inefficiencies. segment, so bit if you a it. just maybe sounds of Got but on these think Okay. down by like

little a more strong. bit quite maybe So in was meanwhile, On-Road muted Off-Road,

and of So the is On-Road margin maybe about we do to the flat Or think down? like should we up guide? gross Off-Road composition how be thinking

Yes.

kind in while than the lower QX QX QX think one 'XX of to QX. versus better keep QX -- you QX, while thing mind I better was 'XX, also when was much it than about was much think

to So part difference QX we as just well. snow bit -- margins. more a Like the different it QX in And lower of of the mix said, really snow to had the was be volumes, tends in in the size the the quarter. was bit difference a it,

So when this we last problem. paint had black year, On-Road, QX I think QX,

So shipments were relatively low.

So those Those though, in are than shipments will lower margins, Off-Road. improve QX.

year. -- you the continue overall a an we standpoint, So better. On-Road will And Off-Road, through be margins those that, margins think if negative but to improve It will different be as work operational was just the that's will we from about supply bit Mike think be challenges will about. all and a the of of by course those lumpy inefficiencies that chain sort through the little caused talking

next with ahead. Stember The ROTH Scott go from question MKM. is Please

the be Off-Road, in quarters questions about looking what business XX% some versus mine coal wholegoods. ago, their just maybe there off, a from a to and could buy flat with particularly a not consumer at does do having units. products? and for to PG&A away what much these pocket the recreation it shift you do fall money trends retail have anything in the as But a canary asked few the explain past, In were Just up on

it's No, primary.

retail was below XX%. So retail in in -- the quarter QX

just the of a accessory PG&A trending back orders side, shipments they when Their bit that's normal. also went We're of seeing wanting with through wholesale seeing been rightsize it. DSOs elevated they as to to kind we They've showed to to units a to inventory. side, of the So of attach as pandemic on have a dealers their up. we're are and as of slowing the back PG&A shipments part the retail bit little the sure PG&A tends opposed towards dealers lumpiness inventory because ship. on of and really float make the

through refocus little their work back that, We've we down. bit DSO. on our start orders to dealers a as have come So seen

What that played through and the think actually We that a bit. on is little to units seen trended have solid attachment quarter will out but shipments. probably in retailed up rates impact retail, bit mostly negative we -- the of the the a quarter had were

and what So be coal would we we're mine, then of work all of orders, all those you the accessories canary not would to seeing were think solid. parts and relatively related in as sort things a said, related kinds

either. anything seeing not So there

sort rightsized actually that of trend of for we had growth dealers a to wholegoods the to the what outgrow X-quarter expect expect year. And a we to we PG&A think as they So that's and normal for accessory inventory. bit return

people have stayed RIDE in volume vehicle. weeks reflective They able the has the with to they weeks know the again, to starting get more which probably say out think we've movement that really they're it's play reflects to proved of year-over-year. -- else, dealers, those and activity from least being and more difference to years is everything their pattern. has were a do lot be we fact and to a consistent. a don't And of I activity and like more penetration, service somebody's that's to the to look able And the is good riding out we're whole it's at work-from-home up And ago, talked But our shops The for just to normalized this back return backlog. not normal And to as would are continues people vehicles, as COMMAND thought out pattern. Scott, work. get obviously, I X right at probably of

question and what question is, seems that other up the the And segment then is the is performing divergence And how, about high pretty Marine the end actually the talking you're and side. guess, is is end? The question high first of high on well. I the low It market high. last between pontoon industry end that and down Got market XXs, the the it.

by we're see get mean into to we categories, not to the continue products. I higher-end demand and Yes. going market in share but backlog strong

we went through on 'XX, focused very that. we As were

and So we series entry boats. really QX. of QX weren't the of of more kind shipping a We've a lot channel into got of and in lot those late smaller our kind in out

we'll So see to kick market of starts off, expect the pick end season we that up. that the

the the low the take end is years have -- market where is to shipping don't couple the a a going end Marine of back share or down of opportunity to think growth through of in overall just of year everyone the last be the from of of to but I industry, got pandemic. a that product a -- we've the course more weren't think know of it expecting just bit kind we smaller-boat-entry-price-category I good I

us we share view a we'll as an some think plays give So out. that how We that negative. back. to that And don't take will see opportunity

Davidson. with Brandon from is Please question next Your ahead. D.A. Rolle go

on be to at be you your to market North XQ, where end comment American I had expect share ORV question market just a quick the on it exiting share. able you Would in growth beyond, share inventory years? market some availability the in of coming opportunity maybe And maybe 'XX? and capacity their and your XXXX of competitors are especially given improving increasing the

are capacity, Yes. I that but say into I been business Off-Road increasing the so specifics, our I would a by we quite been. they're get momentum we, the And couple obviously, don't has what factor see of as good in of lot don't a guess What want the will for I have been all this. I that quarters. that is driven past has availability. for --

at the had were incredibly I the was the And vehicle And new encourage dealers. They've And is from the receptivity we year I to the the opportunity would to this talk an that, Bob more in I at products. the Dealers you reviews. and XP, going they that it. RZR And coming to strong. punch Off-Road been and add Orlando dealer the look about ecstatic -- meeting to to have just we new when in standpoint. launched were now which we're loved quality. improvements second to

mentioned, category I what as I they're would defining. term And

So and into you're I take of lot confidence when to innovation, it that, future. can comes where think have back us Polaris product start seeing a is playing in I of offense the and the that

for you concludes question-and-answer the has conference Thank This also our session, attending now presentation. concluded. today's and

disconnect. now may You