Polaris NYSE: PII reported first-quarter fiscal 2026 results that management said exceeded internal expectations, driven by strength in its core powersports operations, improved mix and pricing, and operational efficiencies that helped offset tariff-related headwinds.
CEO Mike Speetzen said the company delivered “a strong start to the year,” with reported sales up 8% and adjusted earnings per share of $0.13. Speetzen added that excluding Indian Motorcycle and related impacts, sales were up 14% organically and EPS would have been $0.26.
First-quarter performance and retail trends
Speetzen said first-quarter sales were driven by double-digit growth in the Polaris Powersports segment, led by the Ranger lineup, “our fast-growing commercial business,” and snowmobiles. Parts, garments and accessories (PG&A) also delivered a strong quarter, with Speetzen citing “14% growth in snowmobile accessories, parts, and apparel as ridership remained strong.”
On the retail environment, Speetzen said North American retail grew 1% overall, with off-road vehicle (ORV) retail up 3%, both excluding youth vehicles. He said Polaris gained share in ORV for the fourth consecutive quarter and ended the quarter with share gains in snow and with Godfrey Pontoons.
Speetzen described a shifting retail cadence during the quarter. He said January and February started strong amid a “constructive consumer backdrop,” followed by a decline beginning in mid-March that he correlated with increased geopolitical tensions and rising oil prices. He said Polaris was “now seeing retail performance return to growth in April with positive metrics across all categories, excluding youth, where we continue to build back inventory.”
In snowmobiles, Speetzen said the 2025–2026 season delivered retail growth of 25%, helped by early season snowfall in the Flatlands, though conditions varied later and some mountain areas saw low snowfall. Despite that, he said Polaris gained “multiple points of share” due to promotional activity to help dealers move non-current inventory and product innovation in wide track and sport utility.
Marine retail in the first quarter was down low double digits per SSI data, which Speetzen noted was incomplete and represented about 10% of annual retail. He said boat show activity was up year-over-year for both brands and pointed to “strong excitement” around premium offerings at Bennington and Godfrey.
Margins improved despite tariff headwinds
Speetzen said Polaris improved gross margin by 389 basis points in the quarter despite a 240 basis point headwind from tariffs. He attributed the outperformance versus expectations to better mix within ORV and Marine, more favorable net pricing, and operational efficiencies. Adjusted EBITDA margin increased 277 basis points, though he noted some operating expenses moved into the first quarter.
On inventory, Speetzen said dealer inventory levels were “healthy” across major categories, and that snowmobile dealer inventory ended the quarter down more than 50% from a year ago. He said Polaris is maintaining alignment of “build, ship, and retail” and described inventory on a days-sales basis as near 100 days.
New segment reporting structure
CFO Bob Mack said Polaris is now reporting in three segments: Polaris Powersports, Marine, and Aixam and Goupil. He said the structure is designed around customer purchase behavior and better aligns with dealer channels.
- Polaris Powersports (nearly 90% of sales) includes the former off-road segment plus Slingshot.
- Marine remains the same.
- Aixam and Goupil includes two small vehicle businesses in Europe, both based in France.
Mack said Polaris Powersports sales increased 14% year-over-year, supported by Ranger and commercial shipments, with PG&A up 14% driven by parts and oil sales. He said segment gross margin rose 422 basis points, “overcoming the anticipated significant headwind from tariffs” due to mix, net price, and operational efficiencies.
In Marine, Mack said results were driven by a “richer mix of pontoons” following launches of the Bennington QX and Godfrey Sanpan premium lineups, along with a modest net price benefit. Marine gross margin improved 64 basis points year-over-year.
Aixam and Goupil sales rose 9%, driven by higher Goupil shipments and higher year-over-year pricing in Aixam. Segment gross margin improved 294 basis points due to mix.
Guidance maintained amid uncertainty; Q2 outlook provided
Management reaffirmed guidance that was updated on March 3 after Polaris raised its outlook following what Mack described as the earlier-than-expected closure of the Indian Motorcycle separation. Mack said the company continues to manage for a “relatively flat retail environment,” keeping production, shipments, and retail aligned to support healthy dealer inventory and reduce promotional activity.
Despite first-quarter outperformance and what Mack called “positive retail trends in April,” the company said it is not raising its outlook due to uncertainty outside its control, including consumer uncertainty tied to higher energy prices and geopolitical conflict, as well as an evolving tariff environment.
For the second quarter, Mack said Polaris expects:
- Sales growth of 5% to 7% year-over-year
- Adjusted EPS of $0.70 to $0.80
- Tariff impact assumed unchanged from current policy, with a negative year-over-year impact of $30 million to $35 million
Mack also said the company expects financial results to return to more typical seasonality patterns, with the second and third quarters as the highest revenue and EPS quarters.
Tariffs: IEEPA, Section 122 and Section 232
Tariffs were a major focus of the Q&A. Speetzen said total tariff costs remain “consistent with what we talked about at around $215 million” for the year. He explained that after the Supreme Court ruling that removed IEEPA tariffs, the administration implemented a Section 122 tariff at 10%, yielding about a $40 million benefit to Polaris. Speetzen said subsequent Section 232 changes “effectively offset that,” adding that Polaris is “definitely affected” by Section 232.
In response to an analyst question, Speetzen confirmed the incremental impact of Section 232 changes in 2026 was around $40 million, offsetting the benefit from the other changes. Management said it did not change guidance because the impacts net out and because of broader policy uncertainty, noting additional reviews such as Section 301 and the USMCA trade agreement.
Mack also addressed timing, explaining that changes related to IEEPA/Section 122 have about a quarter lag because parts are imported ahead of production, while Section 232 changes took effect quickly, meaning impacts are felt “almost immediately.”
Looking ahead, Speetzen said that assuming the tariff regime in place at the moment and the same volumes, Polaris would not expect tariffs to be higher in 2027 than in 2026, while noting uncertainty. He reiterated the company’s mitigation plan to reduce China-sourced material cost of goods sold from 14% last year to below 5% by the end of 2027. Mack said Polaris continues to expect total tariff costs of about $215 million in 2026, excluding potential refunds tied to IEEPA tariffs paid in 2025 and into 2026; he said Polaris paid about $125 million in IEEPA tariffs and intends to seek refunds for the full amount.
Speetzen also said Polaris is seeing operational improvement from lean initiatives and noted the company has achieved over $240 million in structural savings. Mack said first-quarter operating expenses were elevated due to timing, including higher incentive compensation, and quantified the pull-forward at about $30 million, while stating the company still expects to remain within its full-year OpEx guidance.
During the call, J.C. Weigelt, vice president of investor relations, also recognized the upcoming retirement of Peggy James from the investor relations team, calling her contributions over more than 20 years “tremendous.”
About Polaris NYSE: PII
Polaris Inc, founded in 1954 and headquartered in Medina, Minnesota, is a diversified manufacturer of powersports vehicles and related products. Initially gaining prominence with its snowmobiles, Polaris expanded its portfolio over the decades to include all-terrain vehicles (ATVs), side-by-side off-road vehicles, and motorcycles. The company's legacy in recreational and utility vehicle innovation stems from early engineering breakthroughs that established Polaris as a leading name in off-road mobility.
Today, Polaris offers a broad range of products under well-known brands such as Polaris RANGER and POLARIS SPORTSMAN for utility and recreation markets, Slingshot three-wheel roadsters for on-road enthusiasts, and the Indian Motorcycle brand for premium two-wheeled touring and cruiser segments.
Featured Stories
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.
Before you consider Polaris, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Polaris wasn't on the list.
While Polaris currently has a Hold rating among analysts, top-rated analysts believe these five stocks are better buys.
View The Five Stocks Here
Wondering what the next stocks will be that hit it big, with solid fundamentals? Click the link to see which stocks MarketBeat analysts could become the next blockbuster growth stocks.
Get This Free Report
