Polaris Inc.

Second-quarter reported sales increased 9% year over year, or 17% excluding Indian Motorcycle. Adjusted EPS was $1.97, including a $74 million pre-tax benefit from tariff refund claims; excluding that benefit, operational adjusted EPS was $1.01 versus management’s prior target range of $0.70 to $0.80. Operational gross profit margin expanded 82 basis points and operational adjusted EBITDA margin improved by approximately 180 basis points year over year, despite a $32 million ongoing tariff headwind in the quarter. For full-year 2026, Polaris raised sales guidance to $7.3 billion to $7.5 billion, adjusted EBITDA margin guidance to up 50 to 75 basis points, and adjusted EPS guidance to $3.00 to $3.10; operationally, adjusted EBITDA margin is expected to be up 145 to 170 basis points and operational adjusted EPS $2.05 to $2.15. For the third quarter, sales are expected to increase 4% to 5% year over year and second-half adjusted EPS is expected to be close to $1.00, with earnings roughly evenly weighted between Q3 and Q4.

Mike Speetzen said the quarter showed momentum building across the business and credited innovation, dealer relationships, portfolio simplification, and manufacturing efficiency improvements. He emphasized ORV share gains, especially in utility and cab units, and said Polaris is gaining share while keeping dealer inventories healthy. His tone was confident but cautious, repeatedly noting uncertainty around tariffs, inflation, borrowing costs, and the consumer environment, especially in recreational ORV and mid/lower-tier pontoons.

Bob Mack focused on the financial beat, noting all three segments grew and that operational results were ahead of expectations. He highlighted $74 million of tariff refunds, a $70 million commodity headwind expected for the year, and roughly $215 million of tariff expense in 2026, while saying the company is ahead of schedule in reducing China-sourced material cost of goods sold to below 5% by end-2027 from 18% in 2024. He also said net leverage improved to 2.6x from 3.6x in the first quarter, cash flow should improve as seasonal working capital unwinds, and capital priorities remain investment, dividends, then debt paydown.

Analysts pressed on the strength in utility ORV and whether data center construction and commercial buyers were driving it; management said the bulk of the growth was still traditional utility demand, with commercial and government/defense also strong but not fully captured in retail. Questions about promo activity and competitive response drew a response that Polaris’s inventory is in good shape, promo is remaining relatively surgical in the industry, and there has not been a broad change in competitor behavior. On guidance, management said the raise was intentionally cautious because of tariff, tariff-policy, and macro uncertainty, and clarified that the remaining roughly $40 million of potential tariff refunds is not in current guidance and would likely be split between supplier recoveries and future government filings.