Retail Demand Pushes Up Polaris Originations 18%

Polaris Industries saw 18% year-over-year originations growth primarily driven by higher retail demand, the company said on its 3Q earnings report.

Originations grew to $21.3 million in the quarter, compared with $18.1 million in the year-prior period. The year-over-year growth is attributed to higher retail demand and penetration rates along with increased income from Polaris Acceptance as dealer inventories were at more “appropriate levels” to meet demand, according to an SEC filing. Polaris did not comment by press time.

On the retail side of the business, Polaris saw an increase in its off-road segments but a decrease in motorcycles, which resulted in a “neutral quarter overall,” Jaime Katz, equity analyst at Morningstar Credit Ratings, told Powersports Finance.

“The way the numbers shook out on the retail sales side, it looks like side-by-sides did well, and then ATVs were sort of weak,” Katz said. “Then on the motorcycle side, it looks like Indian did well and Slingshots were weak. You have these sort of themes flowing through all their segments where for everything that was happening, there seems to be this neutral offset. They were able to take average selling prices up 5% in off-road, and they were sort of dinged on the gross profit side by things like tariffs.”

Off-road vehicles, which have been on an overall uptick in the market, saw an increase in retail sales. The off-road vehicle segment (which includes snowmobiles and personal watercraft) grew 3% year over year, with a 12% increase from off-road sales, specifically.

Motorcycle sales remained flat year over year, with Indian motorcycle increasing in the low single digits. Midsize bikes, such as the Indian Scout, showed strong performance, but heavyweights declined due to a “weak industry,” Mike Speetzen, executive vice president of finance and chief financial officer of Polaris, said in its report.

Additionally, the acquisition of Boat Holdings, a manufacturer of luxury pontoons, led to stronger third-quarter sales than initially expected. The all-new boat segment contributed $134 million in sales. The acquisition closed in early July, and this was the first quarter of sales for Polaris’ boat segment.

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