What Happened?
Shares of off-Road and powersports vehicle corporation Polaris (NYSE:PII) fell 11.2% in the afternoon session after the company reported weak third-quarter earnings results that fell below analysts' EPS and revenue estimates. Management called out a challenging consumer confidence and retail environment.
Moving on, guidance reflected the weak trends observed by the business. FY'2024 sales are expected to decline approximately 20 percent year on year (vs. the previous guidance for a 17 to 20 percent y/y decline). Similarly, adjusted diluted EPS is expected to fall approximately 65 percent year on year (versus the prior outlook of a 56 to 62 percent decline). Overall, this was a softer quarter.
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What The Market Is Telling Us
Polaris’s shares are not very volatile and have only had 8 moves greater than 5% over the last year. Moves this big are rare for Polaris and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 9 months ago when the stock dropped 5.9% on the news that the company reported fourth-quarter results, which missed Wall Street's EPS and operating margin expectations, though revenue beat. Management called out "unexpected operational challenges" and added that the company's end markets will "remain challenged in 2024." Overall, it was a weak quarter for the company.
Polaris is down 23.4% since the beginning of the year, and at $72.32 per share, it is trading 27.8% below its 52-week high of $100.12 from March 2024. Investors who bought $1,000 worth of Polaris’s shares 5 years ago would now be looking at an investment worth $713.45.
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