PII · Polaris Inc.

Polaris Inc. delivered a strong Q1 2026 performance with sales reaching $1,659 million, an 8% increase year-over-year, primarily fueled by higher shipment volumes, positive net pricing, and reduced promotions. North America sales, comprising 86% of total, surged 10% to $1,426 million, while international sales dipped 5% to $233 million. Gross profit margin expanded significantly by 423 basis points to 20.2% on a GAAP basis (20.5% adjusted), driven by favorable product mix, net price realization, and operational efficiencies that offset higher tariff expenses. The Polaris Powersports segment, the largest contributor at $1,419 million in sales (+14% YoY), saw gross margin improvement of 422 bps to 20.9%, supported by PG&A sales growth of 14% and market share gains in ORV (retail +3%) and snowmobiles. Marine and Aixam & Goupil segments also posted sales gains of 9% each with margin expansions. Operating expenses rose 29% to $390 million due to timing of G&A costs, pushing op ex as % of sales up 377 bps to 23.5%. Despite this, reported net loss narrowed to $47.4 million ($0.83 diluted EPS loss) from $66.8 million ($1.17 loss) last year, with adjusted net income of $7.5 million ($0.13 EPS). CEO Mike Speetzen highlighted the team's disciplined execution amid a dynamic macro environment, emphasizing strategy, product innovation, and efficiency for profitable growth. The company reaffirmed full-year 2026 guidance for adjusted sales of $7.15-$7.30 billion and adjusted EPS of $1.60-$1.70, signaling confidence. Corporate segment sales declined due to the Indian Motorcycle divestiture completed February 2, 2026. Balance sheet shows inventories down to $1,568 million from $1,748 million YoY, with cash at $282 million and shareholders' equity at $750 million.