Financial and Operational Highlights
- Full year reported and adjusted sales increased 17% to a record $8,198 million
- Full year 2021 reported net income was $7.88 per diluted share; adjusted net income for the same period was a record $9.13 per diluted share, exceeding our previously issued guidance
- Fourth quarter reported and adjusted sales increased one percent to $2,170 million
- Fourth quarter reported net income was $1.40 per diluted share; adjusted net income for the same period was $2.16 per diluted share
MINNEAPOLIS — Polaris Inc. (NYSE: PII) (the "Company") today released fourth quarter 2021 results with reported sales of $2,170 million, up 1% from reported sales of $2,156 million for the fourth quarter of 2020. The Company reported fourth quarter 2021 net income of $87 million, or $1.40 per diluted share, compared with net income of $199 million, or $3.15 per diluted share, for the 2020 fourth quarter. Adjusted net income for the quarter ended December 31, 2021 was $134 million, or $2.16 per diluted share compared to $211 million, or $3.34 per diluted share in the 2020 fourth quarter.
Gross profit decreased 19% to $445 million for the fourth quarter of 2021 from $550 million in the fourth quarter of 2020. Reported gross profit margin was 20.5% of sales for the fourth quarter of 2021, down 499 basis points compared to 25.5% of sales for the fourth quarter of 2020. The decrease in gross profit was driven primarily by higher input costs including logistics, components and commodity prices, as well as plant inefficiencies related to supply-chain constraints, partially offset by increased pricing and lower promotional costs. Adjusted gross profit for the fourth quarter 2021 was $447 million, or 20.6% of adjusted sales, compared to the fourth quarter of 2020 adjusted gross profit of $552 million, or 25.6% of sales. Adjusted gross profit for the fourth quarter of 2021 and 2020 excludes the negative impact of approximately $2 million of restructuring and realignment costs in each period.
Operating expenses were $303 million in the fourth quarter of 2021 compared to $304 million in the fourth quarter of 2020. Operating expenses as a percentage of sales, improved 16 basis points in the fourth quarter 2021 compared to the fourth quarter of 2020.
Income from financial services was $13 million for the fourth quarter of 2021, down 27% compared with $17 million for the fourth quarter of 2020. The decrease was due to lower retail financing income resulting from lower retail sales and lower penetration rates at our retail financing providers and a decrease in wholesale financing income due to lower dealer inventory levels.
Off-Road Vehicles (“ORV”) and Snowmobiles segment sales, including PG&A, totaled $1,431 million for the fourth quarter of 2021, down 2% compared to $1,468 million for the fourth quarter of 2020 driven by lower volumes due to supply chain constraints, as well as related component shortages, which impacted the cadence of shipments, partially offset by price increases. PG&A sales for ORV and Snowmobiles combined increased 12 percent in the fourth quarter of 2021 compared to the fourth quarter last year. Gross profit decreased 29 percent to $274 million in the fourth quarter of 2021, compared to $387 million in the fourth quarter of 2020. Gross profit percentage decreased 724 basis points during the 2021 fourth quarter compared to the prior year due to higher input costs related to supply chain constraints more than offsetting increased pricing and lower promotional costs.
ORV wholegoodsales in the fourth quarter of 2021 decreased 7%. Polaris North American ORV retail sales decreased mid-twenties percent for the quarter with side-by-side vehicles down mid-twenties percent and ATV vehicles down about thirty percent. The North American ORV industry was down low-twenties percent compared to the fourth quarter last year. ORV market share loss was due to the impact of supply chain disruptions to product availability.
Snowmobile wholegood sales in the fourth quarter of 2021 increased 2%. Polaris snowmobile retail sales were down approximately 30% during the fourth quarter of 2021 compared to the prior year while North American industry retail sales were down low-twenties percent for the fourth quarter compared to the prior year.
