Polaris Inc. (NYSE:PII), a leading manufacturer of powersports vehicles, saw its stock plummet 7.25% in pre-market trading on Tuesday, following the release of its fourth-quarter and full-year 2024 financial results.
The company's disappointing 2025 outlook appears to be the primary catalyst for the sharp sell-off. Here are the key factors contributing to the stock's decline:
1) Weak 2025 Guidance: Polaris projected a 1% to 4% decline in revenue for 2025, falling short of analysts' expectations. Furthermore, the company forecasted a staggering 65% drop in adjusted earnings per share (EPS) for the year, citing negative product mix shifts, planned production cuts, and the reintroduction of an employee profit-sharing program as headwinds.
2) Challenging Industry Environment: Polaris acknowledged that the powersports industry continues to face headwinds, with retail demand remaining subdued. This aligns with analysts' concerns that expectations for Polaris and its peers may need to be tempered due to the challenging industry landscape.
3) Fourth-Quarter Performance: While Polaris beat revenue estimates in the fourth quarter, its adjusted EPS fell short of analysts' expectations. Additionally, the company reported declines across all three of its segments – Off-Road, On-Road, and Marine – with Off-Road, its largest segment, seeing a 25% drop in sales.
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