Polaris Industries (NYSE: PII) reported Q2 EPS of $1.30, $0.67 better than the analyst estimate of $0.63. Revenue for the quarter came in at $1.51 billion versus the consensus estimate of $1.37 billion.

Financial and Operational Highlights

• Second quarter reported and adjusted sales decreased 15% to $1,512 million and $1,510 million, respectively
• Second quarter reported net loss was $3.82 per share; adjusted net income for the same period was $1.30 per share
• North American retail sales increased 57% for the quarter compared to last year with both ORV and Motorcycle retail sales up significantly
• Dealer inventory levels decreased 47% given the strong retail sales growth and lower shipments resulting from the COVID-19 related temporary suspension of production during the quarter
• Evaluation of the Company's Aftermarket goodwill and other intangibles resulted in a pre-tax $379 million non-cash impairment charge taken during the quarter
• Operating expenses excluding the impairment charge, decreased 15% given the substantial reduction in discretionary and non-essential spending in response to the pandemic crisis
• Polaris' liquidity profile remains solid with debt/EBITDA below 3 times and total liquidity of $1.2 billion at quarter end
• Polaris re-initiated full year 2020 sales and adjusted earnings guidance with full year adjusted earnings in the range of $6.40 to $6.60 per diluted share and full year sales in the range of $6.650 billion to $6.750 billion

CEO Commentary

Polaris’ second quarter results significantly outperformed expectations, once again demonstrating the resiliency and dedication of our global team. We overcame a near complete shutdown of both our dealers and the U.S. economy early in the quarter to capitalize on unprecedented retail demand for our Off-Road Vehicles and Motorcycles through May, June and now July. Our broad array of best-in-class products provided an attractive social-distancing solution for both existing, and encouragingly, a wide range of new Powersports customers. During the quarter, we navigated a level of uncertainty and unrest that is unparalleled in our nation’s history, beginning with rapidly and successfully restarting our production facilities, while protecting the health and safety of our employees. And importantly, following the death of George Floyd here in Minnesota, we united to do our part to bridge divides and drive meaningful change. From executive leadership to our production line employees, we are working under a shared goal of positively impacting our company and communities. Despite social turbulence and softness in our Adjacent Markets businesses, between ongoing strong consumer demand and historically low dealer inventory levels, we are well-positioned for the second half of the year. I am fortunate to work with an extremely talented team and am confident that we will navigate this pandemic, engender a more welcoming and inclusive Powersports industry, and continue building an even better and stronger business.

-- Scott Wine, Chairman and Chief Executive Officer of Polaris Inc.

GUIDANCE:

Polaris Industries sees FY2020 EPS of $6.40-$6.60, versus the consensus of $3.88. Polaris Industries sees FY2020 revenue of $6.65-6.75 billion, versus the consensus of $6.1 billion.

The Company re-initiated its sales and adjusted earnings guidance for the full year 2020. Adjusted net income is expected to be in the range of $6.40 to $6.60 per diluted share for the full year 2020 compared to adjusted net income of $6.32 per diluted share for 2019. Sales are now expected to be in the range of $6.650 billion to $6.750 billion, flat to down two percent compared to 2019 adjusted sales of $6,783 million, due to the pandemic driven plant shut-down in the second quarter 2020.

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