Core Insights - Polaris Off Road has announced significant enhancements for its 2026 RZR and RANGER lineups, focusing on performance, comfort, and style, driven by 11 years of rider feedback [1][2][3] RZR XP and RZR XP S Models - The RZR XP has undergone a dynamic redesign emphasizing performance, durability, and style, featuring a new aggressive front fascia and reinforced chassis [4] - The RZR XP Sport is powered by a 114 horsepower ProStar 1000 engine, offering 20 inches of usable travel and 29-inch tires, while the RZR XP Ultimate includes advanced features like RIDE COMMAND and Rockford Fosgate® audio [5] - The all-new RZR XP S is designed for wide-open terrain with a 72-inch width and 25 inches of usable suspension travel, featuring three drive modes for optimal performance [6][7] - Both RZR XP and RZR XP S models offer over 60 accessory options for customization, including a new Rockford Fosgate® audio roof [9] RZR PRO R and RZR PRO S Calavera Edition - The 2026 RZR PRO R Ultimate features a 10.4" touchscreen display, the largest in powersports, with enhanced processing speeds and functionality [10] - The RZR PRO R delivers 225 horsepower and utilizes advanced suspension technology for superior off-road performance [10] - The limited-edition RZR PRO S Calavera Edition celebrates Polaris's 10th anniversary in Mexico, featuring custom graphics and a turbocharged engine [12][13] RANGER XD 1500 NorthStar Lineup - The RANGER XD 1500 NorthStar lineup is expanding with the introduction of the Texas and Mountaineer Editions, tailored for specific regional needs [16][17] - The Texas Edition features bold styling and enhanced capabilities, while the Mountaineer Edition offers 20% more low-end torque for improved performance in mountainous regions [18][19] - Both editions include premium features such as JBL® audio systems and enhanced comfort options, reinforcing RANGER's position as the top-selling utility side-by-side [16][19] Pricing and Availability - The starting prices for the new models are as follows: RZR PRO R Ultimate at $43,999, RZR PRO S Calavera Edition at $40,499, RZR XP at $19,999, and RZR XP S at $22,499 [15] - The RANGER XD 1500 lineup will begin shipping to dealers in November, with specific pricing for the new editions also outlined [21][24]

Financial Data and Key Metrics Changes - In Q2 2025, sales decreased by 6% due to the ongoing downturn in the power sports industry and increased promotions [7][20] - Adjusted EPS was $0.40, down year over year but above consensus expectations [9][20] - Free cash flow generated was approximately $290 million, marking a strong performance [19][25] Business Line Data and Key Metrics Changes - Off-road sales declined by 8%, driven by lower whole goods volume and increased promotions [21] - Marine sales increased by 16%, supported by new boat shipments, particularly the entry-level Bennington pontoon [25] - On-road sales were down 1%, with Indian motorcycles showing mid-single-digit growth [24][25] Market Data and Key Metrics Changes - Retail was flat year over year, with growth in Ranger crossover and Indian motorcycles [11][12] - Dealer inventory levels improved, with Polaris maintaining DSOs around 110 days, below historical norms [23][24] - The company gained market share across all segments, including ORV, despite aggressive promotions from competitors [12][13] Company Strategy and Development Direction - The company is focused on innovation and operational efficiencies, targeting $40 million in operational efficiencies for 2025 [9][35] - A new product, the Polaris Ranger 500, is being launched to capture a significant portion of the utility vehicle market [31][32] - The company is actively working on a four-pronged tariff mitigation strategy to reduce exposure and maintain competitiveness [15][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating current challenges and positioning for long-term success despite macroeconomic uncertainties [10][29] - The company is monitoring tariff developments closely and will reevaluate guidance once there is greater clarity [10][11] - Management noted that while the macroeconomic environment remains uncertain, disciplined execution and strong cash flow generation position the company well [29][30] Other Important Information - The company recognized a non-cash goodwill impairment charge related to the On Road segment due to ongoing industry conditions [22] - The company has approximately $1 billion of liquidity available through its revolving credit facility [27] Q&A Session All Questions and Answers Question: How is the company preparing for potential changes in USMCA? - The company is aware of potential renegotiations and is working to reduce sourcing from China while increasing manufacturing in the U.S. and Mexico to align with USMCA [38][40] Question: Can the company win at lower price points given current trade policies? - The company believes it can maintain margins on the new Ranger 500, which is priced competitively and expected to attract new customers [47][49] Question: What is the expected annualized tariff impact next year? - The company estimates an annualized tariff impact of around $230 million, which could be reduced further through ongoing mitigation efforts [56][58] Question: How is retail performing month to month? - Retail performance was stable throughout the quarter, with the utility segment holding up well, and management is optimistic about future sales as economic conditions stabilize [70][72] Question: What factors are driving share gains in ORV? - Share gains are attributed to strong product offerings and improved inventory levels among competitors, allowing the company to capitalize on its innovative products [109]