Though financial services remained relatively flat, Polaris Industries experienced an increase in sales across all UTV, snowmobile, and motorcycle segments, despite the market being down, the company reported in its first-quarter earnings report.
Income from financial services was $21 million for the first quarter of 2018, up 5% year over year. The increase is attributable to improved retail and an increase in income generated from extended service contracts. In its 4Q 2017 report, the OEM forecast that financial services would remain relatively flat throughout 2018.
Sales increased to $1.3 billion from $1.1 billion the same time the year prior. Net income increased by 43% to $69 million year over year.
Off-road vehicles/snowmobiles make up the largest segment for the manufacturer, which grew to $833 million from $724 million the same time the year prior. Of that total, off-road vehicles increased 17%, while snowmobiles grew 28%.
“We delivered record first quarter off-road vehicle retail sales to begin the year, driven by innovation and improved dealer engagement,” Scott Wine, chairman and chief executive officer of the OEM, said on the earnings call. “This translated into strong revenue and earnings growth for the quarter. Through the tireless efforts of our team and the efficacy of various quality and productivity initiatives, we overcame commodity and freight inflation and product mix pressures in the first quarter to maintain our gross margin year-over-year.”
Meanwhile, motorcycle sales were up 9% to $132 million. Indian Motorcycles — a Polaris subsidiary — and the Slingshot model gained market share and accounted for a combined 5% growth.
Side by sides have been experiencing a strong first quarter in the powersports market, while motorcycles have been on a downward trend, according to NADAguide’s Powersports Market Insights report. Utility side by sides started the year off strong at $8,143 in January and February compared with $7,817 the same time the year prior. Motorcycle cruisers, meanwhile, are still valued lower than they were in 2015 and 2016.