Polaris Inc. (NYSE:PII) Q3 2023 Earnings Call Transcript

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We took out some marine from the quarter that we wanted to make sure we stay in the right position on dealer inventory and marine. Same thing with on road. It’s been the motorcycle market, retails looked a little soft, so we’re making sure we go into the season with the right amount of inventory. So I don’t think we’re heavy from a turn standpoint. Certainly the dollars, and what you probably hear from dealers is they feel the dollars, and with the price increases and the heavier mix on premium products and the interest rates, obviously we’re conscious of that and we’re working through that to try to optimize it for people, but we feel like we’re in a good place on dealer inventory.

James Hardiman: I’m sorry, did you say you thought that full year ORV retail would be flat with ‘19, even after, I think it was down 20% in the third quarter?

Bob Mack : Yes, James, we’re not going to sit here and get down into the particulars, but I think overall as a company, we think we’ll be flat-ish, maybe down a little bit relative to ‘19. And it’s about to come out, I mean, our dealer inventory levels adjusted for the two new products to be comparable to ‘19 should be down as well. And so we know it’s not perfect in all areas, but certainly a pretty good guidepost for us as we think about, getting into ‘24 and how we want to start planning the business.

Operator: The next question is from Xian Siew with BNP Paribas.

Xian Siew: Hi guys, thanks for taking the question. Maybe on the new category, it sounds like, as you’ve kind of talked about before, that you view them as incremental with little overlap for the existing line. And I know it’s kind of early, but are there any kind of initial indications that you’re bringing in a new customer or any kind of, is it, whether it would be like presales or anything like that?

Mike Speetzen : Yes, we are definitely — we don’t have a lot of experience yet with the XD other than what we’re hearing from the dealers given we haven’t delivered that. But for XPEDITION, certainly we are pulling in folks that would have contemplated buying a more of an automobile to go do the types of activities. But the XPEDITION offers them at a far more attractive price point, the ability to have a vehicle that can get them out doing the overlanding and deep woods activities that they want. So it’s still early days, but we’re really encouraged with what we’ve seen. And I’d encourage you if you get the chance, there’s plenty of reviews and customer videos and things out on YouTube that I think really speak to it better than we ever could on this call.

Bob Mack : Yes, I think if you think about XPEDITION, right, the product we have that’s most comparable as general and we’ve continued to see strong retail on general. And no fall off there. And it looks like it’s, as Mike said, it looks like it’s proving out to be a somewhat different customer. Just like the customer that wants more features would have maybe traded out of a Jeep or some other type of off road vehicle into the XPEDITION which obviously has a lot more capability than the general, which has a little bit of a different use case.

Xian Siew: Got it. Thanks. And maybe just a follow up. It sounds like versus we talked last time, it sounds like the value segments where it’s maybe getting a little more pressure. Can you maybe just remind us the mix of value versus premium?

Mike Speetzen : We don’t really, we’ve ever given that mix, but we’ve seen or got a growth on the premium side. Value, it’s obviously units, a lot lower dollars. And that pressure, like we said, is coming really, we think from interest rates and this credit pressure on debt to income ratios, because that tends to be that buyer so.

Operator: This concludes our question and answer session, and the conference is also now concluded. Thank you for attending today’s presentation. You may now disconnect.

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