Polaris Industries (PII) Tops Q4 EPS by 26c, Revenues Beat; Offers FY21 EPS/Revenue Guidance Above Consensus

Polaris Industries (NYSE: PII) reported Q4 EPS of $3.15, $0.26 better than the analyst estimate of $2.89. Revenue for the quarter came in at $2.16 billion versus the consensus estimate of $2.1 billion.

• Fourth quarter reported and adjusted sales increased 24% to $2,156 million
• Fourth quarter reported net income was $3.15 per share; adjusted net income for the same period was $3.34 per share
• Full year reported sales increased 4% to $7,028 million
• Full year 2020 reported net income was $1.99 per diluted share; adjusted net income for the same period was $7.74 per diluted share, exceeding the high-end of previously issued guidance
• North American retail sales increased 28% for the quarter compared to last year led by strength in ORV, Motorcycles and Snow. Boats retail sales were also strong during the quarter.
• Gross profit margin for the fourth quarter was 25.5%, up 112 basis points over prior year. Adjusted gross profit margin was 25.6%, up 95 basis points versus last year primarily due to positive product mix and lower promotional costs, offset somewhat, by costs related to supplier constraints.
• Full year operating cash flow finished at a record $1.019 billion
• Polaris announced full year 2021 sales and adjusted earnings guidance with full year adjusted earnings in the range of $8.45 to $8.75 per diluted share and full year sales up in the range of $7,950 million to $8,150 million, an increase of 13% to 16%

CEO Commentary

The Polaris team once again demonstrated its strength and agility to deliver a strong finish to an exceptionally unusual year. While 2020 brought many unforeseen challenges, we emerged from the abrupt shutdown of the global economy early in the year to leverage the surge in demand across the Powersports industry and outdoor recreation, growing full year adjusted sales and earnings 4% and 22%, respectively. Our highly innovative product line-up of ORVs, snowmobiles and boats brought in new customers and powersports enthusiasts to Polaris. Over the year, we introduced over 120 new products across our portfolio and over 900 new accessories in our PG&A business and Aftermarket segment, combined. While supply chain challenges remain front and center for Polaris and most of the industry as we enter 2021, the operational track record of our team gives me great confidence in our ability to navigate those constraints, rebuild dealer inventories, and continue to bring to market the highest quality, most innovative products and services in the powersports industry.

GUIDANCE:

Polaris Industries sees FY2021 EPS of $8.45-$8.75, versus the consensus of $7.80. Polaris Industries sees FY2021 revenue of $7.95-8.15 billion, versus the consensus of $7.4 billion.

The Company announced its sales and adjusted earnings guidance for the full year 2021. Sales are expected to increase to the range of $7,950 million to $8,150 million, an increase of 13 percent to 16 percent over 2020 adjusted sales of $7,025 million and adjusted net income is expected to be in the range of $8.45 to $8.75 per diluted share for the full year 2021 compared to adjusted net income of $7.74 per diluted share for 2020. The full year 2021 earnings guidance includes an increase in tariff costs of approximately $40 million for the full year 2021 as exemptions and refunds received in 2020 are not contemplated to continue into 2021.

For earnings history and earnings-related data on Polaris Industries (PII) click here.

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