Polaris Industries Inc. reported a 200 basis point year over year rise in its credit approval rate to 62% in the second quarter, despite an unchanged retail finance penetration rate of 30%, according to the company’s earnings today.
Polaris currently has financial partnerships with FreedomRoad Financial (for Performance Finance), Sheffield Financial, and Synchrony Financial.
The OEM’s retail and wholesale finance portfolio remains “healthy,” Mike Speetzen, Polaris’ executive vice president of finance and chief financial officer, said on the earnings call today.
Income from financial services dropped 6% year over year to $19 million for the quarter. The decrease is attributable to lower income generated from both the wholesale and retail portfolio, offset somewhat by increased income from the sale of extended service contracts, Speetzen said. The OEM brought the sale of extended service contracts in-house in mid-2016.
Polaris predicts its income from financial services to decline about 10% in 2017, due to lower dealer inventory levels. The percentage remains unchanged from the manufacturer’s previous prediction last quarter.
The OEM’s dealer inventory was down 6% in 2Q, as compared to the prior-year period. Off-road vehicle dealer inventory was also down 6% year over year, according to the earnings. The lower inventory was due, in part, to the OEM’s recalls earlier this year.