Polaris Industries (NYSE: PII) reported Q2 EPS of $1.77, $0.15 better than the analyst estimate of $1.62. Revenue for the quarter came in at $1.5 billion versus the consensus estimate of $1.45 billion.

Q2 2018 Highlights

• Reported sales for the second quarter of 2018 increased 10% to $1,503 million; adjusted sales increased 11% to 1,505 million
• Reported net income was $1.43 per diluted share, up 47% over the prior year; adjusted net income for the same period was $1.77 per diluted share, up 45% over the prior year
• North American retail sales increased 6% for the quarter; ORV N.A. retail sales were up mid-single digits % with both side-by-side and ATV vehicles up mid-single digits percent. Gained market share in side-by-side\'s and ATVs during the quarter along with ongoing market share gains in Indian motorcycles
• Dealer inventory was up 6% year-over-year, excluding Snowmobiles, for the second quarter 2018; ORV dealer inventory was up high single digits % due to new product shipments; motorcycle dealer inventory was down low single digits %
• Increased full year 2018 sales guidance to up 11% to 12% taking into account improved volume expectations and the acquisition of Boat Holdings, LLC (Boat Holdings). Adjusting full year earnings per share expectations by raising the lower end of the Company\'s earnings per share range and now expect adjusted net income to be in the range of $6.48 to $6.58 per diluted share which includes the absorption of an estimated additional $40 million of tariff and related commodity cost increases anticipated in 2018 and the adjustment to exclude intangible amortization for all prior acquisitions.

CEO Commentary

"I am very pleased with the Polaris team and the strong execution they delivered across the business during the 2nd Quarter. With solid retail growth and market share gains in both our Off-Road Vehicle business and Indian Motorcycles, we are clearly reaping the benefits of our safety and quality investments, new product innovations and improved delivery performance. Consumer sentiment and dealer traffic improved throughout the Quarter, building momentum which will help offset the rising risk of tariffs in the 2nd half. During the Quarter we were excited to announce another expansion of the Polaris powersports portfolio with the acquisition of Boat Holdings, the largest manufacturer of pontoon boats in the U.S. Between organic growth and considered acquisitions, Polaris’ underlying performance has significantly improved, but much of our success is being masked by substantial cost escalation driven by tariffs and commodities. As we navigate through increasingly dynamic markets, our efforts to enhance product quality and innovation, boost productivity and become a more customer centric Company are paying off, and Polaris is well-positioned for further success.”

GUIDANCE:

Polaris Industries sees FY2018 EPS of $6.48-$6.58, versus the consensus of $6.53.

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