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Shares of Polaris (NYSE:PII) fell sharply in early trading on Tuesday after the company fell short with Q1 results.
The motorcycle, snowmobiles and ATV manufacturer said it was impacted negatively during the quarter by increasing supply chain challenges and inflationary pressures, which were only partially offset by strong pricing.
North America sales of $1.67B in Q1 was up slightly from $1.66B a year ago and represented 85% of total company sales. Gross profit plunged 447 basis points to 20.3% of sales, driven primarily by inflationary pressures and supply chain challenges, partially offset by strong pricing, a lower promotional environment and sourcing mitigation efforts.
Q1 net income fell 48% Y/Y to $70M and EPS was down 46% to $1.14.
Despite the pressure on the cost side, demand was noted to remain healthy. “While much of our focus centers on navigating the highly volatile and challenging supply chain environment, demand for our industry-leading products and services remains healthy, as we continued to see high levels of pre-sold orders and low cancellations, strong short- and long-term repurchase rates, and record levels of PG&A attachments,” stated CEO Mike Speetzen.
Polaris (PII) said it is making strategic investments in both innovation and operations to enable its long-term growth plans and productivity needs and strengthen the position as a global leader in powersports.
Polaris shed 8.60% in premarket trading to $97.60 following the earnings miss and light guidance update.
