Sabahat Khan: Great. And maybe if I could sneak in one on the marine side. One of the marine firms that has a year-end in June is pointing to pretty significant revenue decreases — well above kind of what you’re planning here for ’24. I guess just maybe if you could talk about where you’re playing in Marine in terms of is it a bit of an expectation that would those rate cut expectations, maybe the marine business picks up in the back half of the year? Just how are you thinking about that business over the course of ’24 and the comfort level with the mid-teens down guide?
Michael Speetzen: Well, I mean, look, it’s tough to always know. But we took a pretty firm stance through the course of ’23, working with Ben Duke and his team as we saw the retail environment slowing feedback from dealers around dealer inventory levels and the interest costs associated with those. And it’s why we made a series of cuts to our marine production through the course of the year. And so as we head into to ’24, we’re still being very cognizant of that. The first and second quarter are really going to be key as dealers get a sense of what the boating season looks like, how much inventory they want to take a position on. The dealers are obviously taking a far more aggressive stance because the OEMs essentially have all caught up.
I can’t think of the last time we’ve had a supply chain issue within our Bennington, Hurricane or Godfrey businesses. And so they know the manufacturing system can move pretty quickly. And so we’ve taken a conservative approach to what we think is going to happen this year. And if things end up a little bit better, we can react. And obviously, as we demonstrated in ’23 if things don’t play out as anticipated, we’ll make those reductions to make sure we keep dealer inventory in check. Bob made that point. One good thing about our boat business in a downturn is they can react quickly, and we actually were able to improve the EBITDA margins in that segment despite having lower-than-anticipated volumes.
Robert Mack: The other benefit we’re seeing in Marine, Mike talked about it a little bit, but as the marine market has been challenged, dealers during COVID, when they couldn’t get the boats, they want it picked up a lot of side brands, smaller brands, niche products and as they focused on their floor plan interest and the cost of carrying inventory, they pushed a lot of those brands out, which has created some more space for us. We’ve also been pretty successful upgrading dealers and adding dealers, which is something particularly in Bennington we have been able to do in a long time because we had the inventory. So to supply a new dealer. So both of those things, I think are helping us a little bit offset some of the weakness.
Michael Speetzen: And I mean, go back and look at the data, I mean, last year, we pulled revenue down in our Marine business over 20% and then we’ve got a guidance that says we’ll be down another mid-teens in ’24. So we’re responding appropriately to the category, and it’s going to be important to see what happens. And hopefully, we’re going to have good boating.
Sabahat Khan: Great, thanks very much for all that color.
Operator: Thank you. The next question comes from Robin Farley with UBS. Please go ahead.
Robin Farley: Great, thanks. Most of my questions have been answered. Just wanted to circle back to your 2026 goals that that you’re maintaining. And just to clarify, is that on the revenue side as well that you’re kind of maintaining that and what do you think will be the biggest the drivers of that top line? I know you mentioned the idea about interest rates and economic uncertainty kind of clearing up, but it seems like it would take more than just kind of getting back to previous economic outlook. Is there I guess, I just want to clarify, is the revenue goal without any type of acquisition? Or is there something new in terms of product line that we don’t know about yet that that we’ll see between now and 2026 or just looking for kind of what those drivers might be? Thank you.
Michael Speetzen: Yes. Obviously, we’ve done a lot of math around and Bob can talk to more detail about what — to get to those numbers, what ’25 and ’26 really need to look like. It’s not super sporting. I mean, obviously, we can’t have another couple of years like we’ve had from a broader economic perspective. What gives me confidence is, I do think we’re at the end of a — what was probably, I think a record tightening cycle as well as coming out of an environment that I don’t think anybody could have ever predicted in terms of COVID and get everybody back to work and just some of the other geopolitical things that were going on. And it’s not to say that there won’t be more issues in front of us. But I do think we’re getting into a more stabilized environment.
And when you couple that with what we’ve done, if I go back years ago, the knock on us was we were losing share. We didn’t have the new products coming out. I mean we have fixed that, and we fixed it significantly. And we’re not done, and the team’s got more product coming out. We’re obviously not going to spend time talking about that now. But rest assured, when I look at what happened starting back in that 2015-2016 time period from a share standpoint, it’s great that we gained share last year. It’s great that excluding youth, we gain more share than everybody else. But we still have a lot more that we’re going to get back. And we’re going to go after that. We are not building in acquisitions. Given where our stock is trading, I made some comments about our free cash flow yield, there is hard to imagine a better investment than Polaris stock right now from my perspective.
And so I would be hard-pressed to be convinced that we need to go out and buy some other company to try and meet our revenue growth objective. I think for us, the biggest challenge is going to be around margins, and I talked about it earlier in terms to Craig’s question. The things that we’re doing and the things that are under our control, I feel confident that we’re going to be able to get after them, and we’re pushing the team hard. The team understands what’s at stake and they’re highly committed and driven and I wouldn’t bet against them.
Robin Farley: Great, thank you very much.
Michael Speetzen: Thank you.
Operator: Thank you. The next question comes from David MacGregor with Longbow Research. Please go ahead.
David MacGregor: Yes, hi everyone. Thanks for taking the questions. Mike, I wanted to ask you about tariffs, and there’s a pretty good chance we’ll end up with the Republic of White House. And last time around these tariffs were pretty disruptive to the P&L. Can you just talk about progress you’ve made in terms of reshoring or near-shoring back to the North American free trade zone. And are you able to put any numbers around that progress?
