Polaris ended 2025 with share gains, improved operations, and quality. Q4 adjusted sales rose ~9%, but tariffs impacted gross margin and led to modest adjusted EPS (~$0.08). 2026 guidance includes Indian Motorcycle separation, 1–3% total sales growth, and adjusted EPS of $1.50–$1.60. Q1 expected to show >10% sales growth but -$0.45 adjusted EPS with a ~$45M tariff headwind.
Polaris executives closed out a challenging 2025 with share gains and strong cash generation. In Q4, adjusted sales were up 9%, North American retail up 9% excluding youth. Management expects reversal of youth manufacturing shift from China to Mexico in 2026. Off-road vehicles led by utility, premium Ranger XP 1000 NorthStar had highest retail month ever in December.
Polaris faced $37M in tariff costs in Q4, affecting adjusted gross margin. ORV mix improved, supported by higher Ranger and NorthStar shipments. Adjusted EBITDA pressure from normalization of incentive compensation, higher R&D spending. Adjusted EPS was ~$0.08. Management highlighted share gains across all segments in 2025.
In marine, retail declined about 13%, but Bennington and Godfrey outperformed. Marine sales rose 1% in Q4. Snowmobile industry moderated due to lack of mountain snowfall. Polaris cautious and plans to keep snowmobile build schedule lower. Dealer inventory at healthy levels.
Polaris delivered $60M in savings in 2025. Manufacturing transformation led to clean build, labor efficiency improvements. Quality enhancements resulted in $25M reduction in warranty expense. Full-year 2026 guidance includes Indian Motorcycle separation by Q1, forecasted total sales growth of 1–3%, adjusted EPS of $1.50–$1.60.
Polaris expects 2026 operating cash flow of about $160M, free cash flow of $120M. Leverage challenges expected in H1 2026 due to tariff headwinds and rolling comparables. Company committed to dividend, aiming to return to 1x–2x leverage range. Full-year 2026 guidance assumes Indian Motorcycle separation and no regulatory policy changes. Total sales expected to grow 1–3%. Adjusted EBITDA margin set to expand 80–120 bps. Transition service agreements for Indian separation expected to generate $30–$35M of other income in 2026. Adjusted EPS guidance for 2026 is $1.50–$1.60.
Polaris, founded in 1954, is a diversified manufacturer of powersports vehicles. The company’s legacy in recreational and utility vehicle innovation stems from early engineering breakthroughs. Polaris offers products under brands like Polaris RANGER and POLARIS SPORTSMAN for utility and recreation, Slingshot three-wheel roadsters, and Indian Motorcycle for premium touring and cruiser segments.
Read more at Yahoo Finance: Polaris Q4 Earnings Call Highlights