What were the key takeaways from Polaris's earnings call?

Did Polaris beat or miss consensus estimates last quarter?

What guidance did Polaris's management provide for the next earnings period?

What is Polaris's gross profit margin?

What is Polaris's latest dividend and current dividend yield?

What factors drove the changes in Polaris's revenue and profit?

What does Polaris do and what are its main business segments?

What is the market's earnings forecast for Polaris next quarter?

- **Revenue Growth**: Q3 2025 sales $1.8 billion (+7% YoY), driven by ORV and Marine. North American retail up 9%.
- **Inventory Turnaround**: Dealer ORV inventory down 21% YoY, aged units reduced 60%.
- **Tariff Mitigation**: 2026 China-sourced COGS <5%, with $200 million tariff impact.
- **Strategic Sale**: Indian Motorcycle sale to generate $50M EBITDA and $1 EPS accretion.
- **Operational Efficiency**: $40M+ savings from lean manufacturing, $159M operating cash flow.
- **2026 Outlook**: Focus on inventory alignment, innovation, and tariff reduction.

**【CEO Summary Section】**
- Q3 2025 revenue reached $1.8 billion, up 7% YoY, driven by a richer mix of Off-Road Vehicles (ORV) and higher Marine shipments. North American retail sales rose 9%, with a 3-point market share gain in ORV.
- Dealer inventory improved significantly: ORV inventory down 21% YoY, with aged units reduced by 60% over 6 months. Dealer flooring expenses decreased by over 50% in some cases.
- Adjusted EBITDA margin under pressure due to tariffs and normalized incentive compensation, but operational efficiencies (e.g., lean manufacturing) contributed $40 million in savings.
- Announced sale of majority stake in Indian Motorcycle, expected to close in Q1 2026, with $50 million EBITDA accretion and $1 EPS benefit post-separation.
- Tariff mitigation efforts aim to reduce China-sourced COGS to <5% by 2027, down from 2024 levels.

**【CFO Financial Commentary】**
- Q3 2025 adjusted sales $1.8 billion (+7% YoY), driven by 8% growth in Off-Road segment and 20% PG&A sales. Marine sales surged 20% YoY.
- Gross profit margin benefited from mix and operational efficiencies, but $35 million in new tariffs and higher incentive comp weighed on EBITDA margin.
- Operating cash flow $159 million, free cash flow $142 million, reflecting strong cash generation and lean operations.
- Full year 2025 guidance: adjusted sales $6.9-7.1 billion, adjusted EPS loss of $0.05 (excluding tariffs, ~$1.10 EPS).
- Q4 2025 adjusted EPS expected at $0.05, with headwinds from tariffs (+$5 million vs. Q3), negative mix, and OpEx timing.

**【Q&A Key Highlights】**
- **ORV Performance**: 9% retail growth vs. industry low single digits, driven by RANGER 500 (80% new Polaris customers) and improved dealer inventory health. FAC program reduced non-current inventory without heavy promotions.
- **Tariff Outlook**: 2026 tariffs ~$200 million (vs. 2025 $90 million), with 80% China-sourced COGS reduction by 2027.
- **2026 Outlook**: Focus on dealer inventory alignment (build=ship=retail), innovation pipeline (e.g., RZR XP S, QX Bennington pontoon), and tariff mitigation.
- **Credit Trends**: Stable consumer credit quality, with FICO scores improving and subprime auto sector not impacting Polaris' subprime lending.
- **Indian Motorcycle Transaction**: Expected to unlock $50 million EBITDA and $1 EPS accretion, freeing resources for higher-margin growth opportunities.


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