Core Insights - The Polaris RZR Factory Racing team achieved a historic podium sweep at the 2025 SCORE Baja 500, with Brock Heger securing his seventh consecutive UTV overall victory, marking a rare three-peat for the team [1][2][5] Performance Highlights - Brock Heger led the race wire-to-wire, completing the 461-mile course without any issues, and finished eighth among all four-wheel vehicles [2][5] - Cayden MacCachren finished physically third but was elevated to second overall due to penalties assessed to another vehicle, contributing to the team's 1-2-3 finish [4][5] - Ethan Groom and Justin Morgan, who shared driving duties, initially crossed the finish line second but were placed third overall after post-race penalties [3][4] Team and Vehicle Performance - The RZR Pro R Factory demonstrated exceptional power, strength, and control throughout the race, solidifying its reputation as the vehicle to beat in the UTV category [5] - The team’s performance is attributed to the hard work of the RZR engineering team and the dedication of the drivers [5] Future Events - The Polaris RZR Factory Racing team will compete in the Best in the Desert Vegas to Reno race from August 13–16, 2025, which is the only race win that has eluded the factory team [7] Company Background - Polaris Inc. is a global leader in powersports, offering a wide range of off-road vehicles and related products, and has been in operation since 1954 [9]

Core Insights - Polaris Adventures has achieved a significant milestone of two million customer rides, reflecting the growing passion for outdoor adventure and the effectiveness of its network of over 250 local Outfitters [1][3][4] Company Overview - Polaris Adventures, launched in 2017, has become the leading powersports vehicle rental service in the U.S., partnering with locally owned small businesses to enhance local economies and accessibility to outdoor experiences [3][5] - The company offers a variety of powersports vehicles, including off-road vehicles, snowmobiles, and boats, aiming to introduce more people to outdoor adventures [4][8] Growth Metrics - The company surpassed one million rides in 2022 and has since doubled that number in less than three years, indicating rapid growth and expansion [4] - There are over 600 adventures available for customers, with 250 Outfitters operating across 41 states, making outdoor experiences accessible to a large population [6] Customer Engagement - Approximately 40% of riders are new to powersports, showcasing the company's ability to attract new customers to the industry [6] - The company emphasizes the importance of local knowledge provided by Outfitters, which enhances the customer experience by highlighting scenic routes and attractions [3][4] Innovations and Partnerships - Polaris Adventures has introduced a refreshed fleet of high-quality vehicles equipped with the latest safety and navigation technology to ensure a seamless riding experience [7] - The launch of Polaris Adventures Elite provides Outfitters with tools to run their businesses more efficiently, while a partnership with Sensible Weather offers a Weather Guarantee for customers [7]

Core Insights - Polaris Inc. released its 2024 Geared For Good Report, highlighting its commitment to being responsible stewards for employees, riders, communities, and the environment [1][2][3] THINK PRODUCT - Polaris introduced several new products, including the next generation of the Indian Scout, the 2025 RANGER lineup, and the Klim Freeride Helmet, while receiving multiple awards for innovation in 2024 [6] THINK PRODUCTION - The company achieved a 90% waste diversion rate from landfills at its Wyoming facility, meeting its 2035 goal ahead of schedule, and implemented a new liquid paint system that reduced natural gas usage significantly and avoided substantial CO2 emissions [6] THINK PLACES - Polaris awarded grants for trail enhancement projects in Texas and Arizona and donated $220,000 in TRAILS GRANTS to support trail stewardship and rider education across the U.S. and Canada [6] THINK PEOPLE - The company recorded its lowest Total Recordable Incident Rate (TRIR) in history at 0.30 for the second consecutive year and contributed over $6.4 million to local communities through various forms of donations in 2024 [6]

Group 1 - Polaris Inc. is initiated with a Strong Buy rating and a price target of $46.81, focusing on its design, engineering, and marketing of powersports vehicles and accessories globally across various segments [1] - The market is believed to be underestimating the impact and duration of the tariff shock, which is expected to affect Polaris significantly [1] - Moretus Research emphasizes a structured approach to equity research, identifying companies with durable business models and mispriced cash flow potential, particularly those undergoing structural changes or temporary dislocations [1] Group 2 - Moretus Research aims to provide professional-grade insights and actionable valuations, focusing on comparability, simplicity, and relevance in their analysis [1] - The research methodology is built on rigorous fundamental analysis combined with a judgment-driven process, avoiding noise and overly complex forecasting [1] - The emphasis is placed on long-term compounding and a deep respect for capital, aiming to raise the standard for independent investment research [1]

Financial Performance - Total sales for Q1 2025 were $1,535.8 million, a decrease of 11.5% compared to $1,736.4 million in Q1 2024[12] - Gross profit for Q1 2025 was $245.0 million, down 25.8% from $330.3 million in Q1 2024[12] - Net loss attributable to Polaris Inc. for Q1 2025 was $66.8 million, compared to a net income of $3.8 million in Q1 2024[12] - Basic and diluted net loss per share for Q1 2025 was $(1.17), compared to earnings of $0.07 per share in Q1 2024[12] - Operating loss for Q1 2025 was $(36.1) million, compared to an operating income of $39.0 million in Q1 2024[12] - Comprehensive loss for Q1 2025 was $(39.5) million, compared to a comprehensive loss of $(2.3) million in Q1 2024[15] - Total operating expenses for the three months ended March 31, 2025, were $303.2 million, slightly lower than $313.2 million in the same period of 2024[12] - The net loss attributable to Polaris Inc. for the three months ended March 31, 2025, was $66.8 million, compared to a net income of $3.8 million in the prior year[12] Assets and Liabilities - Total current assets decreased to $2,593.7 million as of March 31, 2025, from $2,632.4 million at the end of 2024[10] - Total liabilities decreased slightly to $4,215.3 million as of March 31, 2025, from $4,224.7 million at the end of 2024[10] - Shareholders' equity decreased to $1,230.6 million as of March 31, 2025, down from $1,294.1 million at the end of 2024[10] - As of March 31, 2025, total assets were $5,450.4 million, a decrease from $5,525.2 million as of December 31, 2024[10] - Current liabilities increased to $2,311.5 million as of March 31, 2025, compared to $2,293.2 million at the end of 2024[10] Cash Flow and Investments - Cash and cash equivalents increased to $291.7 million as of March 31, 2025, from $287.8 million at the end of 2024[10] - Net cash provided by operating activities was $83.2 million for the three months ended March 31, 2025, compared to a net cash used of $105.4 million in the same period of 2024[20] - The company reported a net cash used for investing activities of $28.3 million in Q1 2025, compared to $56.7 million in Q1 2024[20] - Financing activities resulted in a net cash outflow of $56.9 million in Q1 2025, compared to a net cash inflow of $115.7 million in Q1 2024[20] Revenue Breakdown - Revenue from Wholegoods was $1,125.4 million in Q1 2025, down from $1,325.3 million in Q1 2024, representing a decline of 15.1%[34] - The United States accounted for $1,192.7 million of total revenue in Q1 2025, compared to $1,342.8 million in Q1 2024, reflecting a decrease of 11.2%[34] - The Off Road segment generated sales of $1,198.6 million, while the On Road and Marine segments contributed $221.8 million and $115.4 million, respectively[75] Depreciation and Amortization - Depreciation and amortization increased to $73.4 million in Q1 2025 from $62.9 million in Q1 2024, reflecting a year-over-year increase of approximately 16.0%[20] - The company recorded $67.4 million in depreciation expense for the three months ended March 31, 2025, compared to $58.4 million in the same period of 2024[27] - The amortization expense for other intangible assets was $6.0 million for the three months ended March 31, 2025, compared to $4.5 million for the same period in 2024, representing a year-over-year increase of 33.3%[51] Shareholder Information - Cash dividends declared and paid per common share increased to $0.67 for the three months ended March 31, 2025, compared to $0.66 for the same period in 2024, marking a 1.5% increase[52] - The Company did not repurchase any shares under its share repurchase program during the three months ended March 31, 2025, but has authorization to repurchase up to an additional $1,109.3 million of common stock[52] Regulatory and Compliance - The Company is subject to extensive laws and regulations, and failure to comply could result in fines or penalties, impacting financial performance[66] Other Financial Metrics - The fair value of financing obligations was approximately $2,097.2 million as of March 31, 2025, compared to $2,103.5 million at the end of 2024[26] - The Company had an accrual of $290.3 million for probable payments related to product liability claims as of March 31, 2025, with $155.9 million recorded for probable insurance recoveries[63] - The notional value of the Company's derivative financial instruments designated as cash flow hedges was $683.4 million as of March 31, 2025, with total fair value assets of $5.1 million and liabilities of $2.5 million[70]

Financial Data and Key Metrics Changes - In Q1 2025, sales decreased by 12% due to reduced shipments aimed at managing dealer inventory amidst a downturn in the powersports market [5][6] - Adjusted EPS was negative $0.90, aligning with the midpoint of the guidance range provided earlier [6] - Gross profit margin declined by 147 basis points, primarily due to increased promotions and a prolonged downturn in the powersports sector [32] Business Line Data and Key Metrics Changes - Off-Road sales were down 10%, influenced by lower volume and higher promotions, although a favorable mix partially offset this decline [31] - On-Road sales decreased by 20%, driven by challenges in the motorcycle market and timing issues with engine deliveries [34] - Marine sales fell by 7%, consistent with planned reductions in shipments, while the pontoon industry experienced an 11% decline year-to-date [36] Market Data and Key Metrics Changes - North American retail sales were down 7%, with better performance in the utility segment compared to recreational products [6] - International business sales dropped 16% due to weak markets in both off-road and on-road segments [30] - Retail trends showed volatility, with significant month-to-month swings, attributed to high inflation and economic uncertainty [85] Company Strategy and Development Direction - The company has withdrawn its full-year guidance due to the fluid tariff environment and its potential impact on consumer spending [9] - A four-pronged tariff mitigation strategy has been implemented, focusing on supply chain adjustments, cost control, market reprioritization, and government advocacy [21] - The company aims to emerge stronger by maintaining close relationships with dealers and focusing on cash preservation [9][30] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging operating environment, emphasizing the importance of navigating through tariffs and economic uncertainty [5][9] - There is optimism regarding the potential for retail demand recovery, contingent on inventory levels stabilizing and consumer confidence improving [56] - The leadership remains committed to long-term strategies that prioritize innovation and operational efficiency [30][46] Other Important Information - The company reported its highest Q1 operating free cash flow in nine years, reflecting effective working capital management [28] - Warranty expenses have improved significantly, contributing positively to customer satisfaction and expected future margins [33][89] - The company is actively engaging with government officials to address tariff-related challenges and advocate for U.S. manufacturing interests [15][24] Q&A Session Summary Question: What role will pricing play in tariff mitigation efforts? - Management indicated that pricing will remain stable through May, as raising prices in a recessionary environment is challenging due to inelastic demand [49][50] Question: Where does the company stand in terms of inventory cleanup among competitors? - Management believes they are in the later innings of the inventory cleanup process, with some competitors still facing significant excess inventory [54][55] Question: What is the expected annualized impact from tariffs in 2026? - Management refrained from providing a specific number, emphasizing ongoing mitigation efforts and the complexity of the tariff environment [62][63] Question: How is the company planning shipment levels in light of retail demand? - The company plans to ship fewer units than retail to manage dealer inventory effectively, adjusting based on future retail strength [95][96] Question: What does the recession playbook entail? - The recession playbook focuses on cash preservation, working capital management, and deferring non-critical CapEx projects [100][101]

Financial Performance - 公司第一季度销售额为15.36亿美元，同比下降12%[9] - 调整后的每股收益为负0.90美元，同比下降1.13美元[9] - 调整后的EBITDA利润率为3.4%，同比下降291个基点[9] - 北美零售额下降7%[9] Tariff Impact and Mitigation - 预计2025年关税净新增影响为2.6亿至3亿美元[22] - 公司正在采取行动，到年底将中国采购减少30%[22] - 墨西哥对美国的进口产品中，目前约95%符合USMCA（美国-墨西哥-加拿大协议）的资格[22] - 采取关税缓解措施和延期后，预计2025年净新增关税影响将低于2.25亿美元[25] Segment Performance - 北美ORV（越野车）零售额同比下降11%[41] - Indian Motorcycle在北美市场份额有所增长，但零售额同比下降了十几个百分点[47] - Marine（船艇）业务的经销商库存同比下降约20%[54] Outlook and Strategy - 由于全球经济政策（关税）的不确定性，公司撤回了2025财年的业绩指引[12] - 公司预计第二季度销售额在16亿至18亿美元之间[61] - 公司正在实施现金储备策略，以应对市场不确定性[58]

Financial Data and Key Metrics Changes - In Q1 2025, sales decreased by 12% due to reduced shipments to manage dealer inventory amidst a downturn in powersports [7][9] - Adjusted EPS was negative $0.90, aligning with the guidance range provided in January [9] - North American retail sales were down 7%, with better performance in the utility business compared to recreational products [9][10] - Gross profit margin decreased by 147 basis points, primarily due to promotions and economic downturn [38] Business Line Data and Key Metrics Changes - Off Road sales declined by 10% due to lower volume and higher promotions, although a favorable mix partially offset this [36][38] - On Road sales fell by 20%, impacted by a challenging motorcycle market and engine delivery timing issues [39] - Marine sales decreased by 7%, consistent with planned reductions in shipments, while the pontoon industry saw an 11% decline year-to-date [41] Market Data and Key Metrics Changes - International business sales dropped by 16% due to weak markets in both off-road and on-road segments [36] - Retail trends showed volatility, with significant month-to-month swings attributed to high inflation and interest rates [92] Company Strategy and Development Direction - The company has withdrawn its full-year guidance due to the fluid tariff environment and its impact on consumer spending [12] - A four-pronged tariff mitigation strategy has been implemented, focusing on supply chain adjustments, cost control, market reprioritization, and government advocacy [26] - The company aims to emerge stronger by maintaining close relationships with dealers and focusing on cash preservation [12][34] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging environment but expressed confidence in the company's ability to navigate through it [6][34] - The CEO emphasized the importance of innovation and dealer partnerships in overcoming current market challenges [17][34] - Management noted that consumer reluctance to spend on discretionary items is affecting retail performance, with expectations for modestly lower retail demand [92] Other Important Information - The company has seen improvements in warranty claims, indicating better product quality and customer satisfaction [39][98] - The company is focused on reducing working capital and has achieved the highest Q1 operating free cash flow in nine years [32] Q&A Session Summary Question: What role will pricing play in tariff mitigation efforts? - Management indicated that pricing will remain stable through May, as raising prices in a recessionary environment is challenging [56] Question: Where does the company stand in terms of inventory cleanup? - Management believes they are in the later innings of the inventory cleanup process, with improvements noted across the industry [61] Question: What is the expected annualized impact from tariffs in 2026? - Management refrained from providing specific estimates for 2026, focusing instead on current year impacts and mitigation efforts [70] Question: How is the company planning shipment levels in light of retail demand? - The company plans to ship lower than retail to continue reducing dealer inventory, adjusting as market conditions evolve [102][104] Question: What actions are being taken to preserve cash? - Management is focused on cash preservation, reviewing CapEx budgets, and maintaining liquidity through discussions with lending partners [78][84]

Core Insights - Polaris Inc reported a revenue of $1.54 billion for the quarter ended March 2025, reflecting a year-over-year decline of 11.6% and an EPS of -$0.90 compared to $0.23 a year ago, with a revenue surprise of +1.67% and an EPS surprise of +1.10% [1] Financial Performance - Revenue breakdown includes Marine sales of $115.40 million, down 6.6% year-over-year, On-Road sales of $221.80 million, down 20%, and Off-Road sales of $1.20 billion, down 10.3% [4] - Gross profit for Marine was $14.30 million, below the estimate of $19.15 million, Corporate gross profit was $3.60 million versus an estimate of $14.05 million, Off-Road gross profit was $191.40 million, exceeding the estimate of $183.52 million, and On-Road gross profit was $35.70 million, below the estimate of $52.73 million [4] Stock Performance - Shares of Polaris Inc have returned -17.6% over the past month, compared to the Zacks S&P 500 composite's -0.8% change, with a current Zacks Rank of 3 (Hold), indicating potential performance in line with the broader market [3]

Company Performance - Polaris Inc reported a quarterly loss of $0.90 per share, slightly better than the Zacks Consensus Estimate of a loss of $0.91, compared to earnings of $0.23 per share a year ago, indicating an earnings surprise of 1.10% [1] - The company posted revenues of $1.54 billion for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 1.67%, but down from $1.74 billion in the same quarter last year [2] - Over the last four quarters, Polaris has exceeded consensus EPS estimates two times and topped revenue estimates twice [2] Stock Performance - Polaris Inc shares have declined approximately 41.4% since the beginning of the year, contrasting with the S&P 500's decline of 6% [3] - The current Zacks Rank for Polaris Inc is 3 (Hold), indicating that the shares are expected to perform in line with the market in the near future [6] Future Outlook - The consensus EPS estimate for the upcoming quarter is $0.63 on revenues of $1.83 billion, and for the current fiscal year, it is also $0.63 on revenues of $6.83 billion [7] - The outlook for the Automotive - Domestic industry, to which Polaris belongs, is currently in the bottom 19% of over 250 Zacks industries, suggesting potential challenges ahead [8]