By Dean Seal

Polaris expects sales to decline again in 2025 following a tough year for the powersports industry that saw the company's volumes slide and profit sink in the fourth quarter.

The maker of off-road vehicles posted a quarterly profit of $10.6 million, or 19 cents a share, compared with $103.4 million, or $1.81 a share, in the same quarter a year earlier.

Stripping out one-time items, adjusted earnings were 92 cents a share. Analysts polled by FactSet had been expecting 89 cents a share.

Sales fell 23% to $1.76 billion, but came in above analyst projections for $1.68 billion.

The biggest decline came from the company's off-road segment, its largest by revenue, which was down 25% during the quarter. On-road vehicle sales were down 21% while marine vehicle sales dropped 4%.

Volumes were down across all three segments as Polaris pulled back on shipments and tried to manage dealer inventory in a muted retail environment. Those lower volumes dented margins in the on-road and marine businesses, though the off-road unit kept gross margin stable from lower costs and operational efficiencies, the company said.

For 2025, Polaris is forecasting revenue to fall 1% to 4% year over year. That would put the figure at between $6.89 billion and $7.1 billion. Analysts had been targeting $7 billion.

Margins this year will likely be hurt by negative shifts in product mix, planned pullbacks in production and the reintroduction of an employee profit-sharing program, the company said. Full-year adjusted earnings are expected to be about 65% lower.

Shares dropped 7.3% to $52.39 in premarket trading.

Write to Dean Seal at dean.seal@wsj.com

(END) Dow Jones Newswires

January 28, 2025 06:50 ET (11:50 GMT)

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