Polaris Inc. Reports 23% Revenue Decline and 82% Net Income Drop in Q3 2024

Polaris Inc. reported significant declines in both revenue and profitability for the third quarter and the first nine months of 2024 compared to the same periods in 2023. For the three months ended September 30, 2024, total sales were $1,722.4 million, a decrease of 23% from $2,248.9 million in the prior year. Year-to-date sales also fell 18%, totaling $5,420.0 million compared to $6,645.2 million in 2023. The decline in sales was attributed to lower net pricing, higher promotional costs, and reduced shipments across various product lines, particularly in the Off Road and Marine segments.

Gross profit for the third quarter was $354.6 million, down 30% from $508.8 million in the same quarter of 2023. Year-to-date gross profit decreased by 25%, totaling $1,108.9 million. The gross profit margin was negatively impacted by a less favorable product mix, increased promotional costs, and decreased leverage of fixed costs due to lower sales volumes.

Net income for the third quarter of 2024 was $27.6 million, a sharp decline of 82% from $151.5 million in the same period of 2023. For the nine months ended September 30, 2024, net income totaled $100.4 million, down 75% from $399.4 million in the previous year. Diluted net income per share also fell significantly, from $2.62 in the third quarter of 2023 to $0.49 in 2024.

Polaris' total current assets increased to $2,728.2 million as of September 30, 2024, up from $2,691.7 million at the end of 2023. However, cash and cash equivalents decreased to $291.3 million from $367.8 million, and trade receivables also fell to $223.7 million from $306.4 million. Conversely, inventories rose to $1,998.9 million, reflecting a strategic decision to maintain stock levels amid fluctuating demand.

The company’s total liabilities increased to $4,274.8 million, up from $4,085.2 million, with current financing obligations surging to $454.4 million from $54.0 million. Shareholders’ equity decreased to $1,341.5 million from $1,418.4 million at the end of 2023.

In terms of strategic developments, Polaris completed the acquisition of Boat Holdings, LLC in July 2018, with $43.2 million of deferred payments outstanding as of September 30, 2024. The company also repurchased approximately 1.0 million shares for $82.3 million during the first nine months of 2024, with an additional $1,109.3 million authorized for future repurchases.

Overall, Polaris Inc. faced challenging market conditions, leading to substantial declines in revenue and profitability, while also navigating changes in its asset and liability structure.