Polaris (PII) Q1 2026 earnings summary

Executive summary

• Q1 2026 sales reached $1.66B, up 8% year-over-year, driven by higher shipments, positive pricing, and lower promotions, with all major segments showing growth.

• Adjusted EPS was $0.13, exceeding expectations, while reported diluted loss per share was $0.83 due to non-recurring charges.

• Gross profit increased 37% to $334.8 million, with margin up 423 bps to 20.2% due to favorable mix, pricing, and operational costs.

• Market share gains achieved in ORV and snow segments for the fourth consecutive quarter, despite a lumpy retail environment.

• Dealer inventory declined 13% year-over-year, remaining healthy and aligned with demand.

Financial highlights

• Quarterly sales of $1.66B–$1.7B, up 8% year-over-year; organic sales up 14% excluding Indian Motorcycle.

• Adjusted gross profit margin expanded by 389–423 bps to 20.2%–20.5%; adjusted EBITDA margin rose 277–280 bps to 6.2%.

• Free cash flow was negative due to seasonality and working capital, but outflow was better than planned.

• Net loss attributable to shareholders improved to $47.4 million, compared to $66.8 million loss in Q1 2025.

• Net interest expense was $30M; average diluted shares outstanding ~57M.

Outlook and guidance

• Full-year 2026 sales guidance: $7.15B to $7.30B, flat to 2% growth; adjusted EPS forecasted at $1.60–$1.70.

• Adjusted EBITDA margin expected to improve by 100–140 bps; guidance reaffirmed, with no reconciliation to GAAP EPS due to unpredictability of certain costs.

• Q2 2026 sales expected to grow 5%-7% year-over-year; adjusted EPS forecasted at $0.70–$0.80.

• Tariff costs for 2026 expected at ~$215 million; mitigation efforts ongoing to reduce China-sourced material costs below 5% by end of 2027.

• Indian Motorcycle separation expected to add ~$50 million to adjusted EBITDA, weighted to the back half of the year.