FINANCIAL AND OPERATIONAL HIGHLIGHTS

• First quarter sales were $1,957 million, flat relative to last year
• First quarter reported earnings per share was $1.14, down 46% versus last year; adjusted earnings per share was $1.29, down 44% versus last year
• Primary drivers in the quarter included increasing supply chain challenges and inflationary pressures, partially offset by strong pricing; demand remains healthy
• Retail Sales for the quarter were down 22% versus last year when retail sales rose 70% in the same quarter, primarily driven by supply chain challenges
• Repurchased ~1.5 million shares for approximately $172 million dollars

MINNEAPOLIS — Polaris Inc. (NYSE: PII) (the "Company") today released first quarter 2022 results, which ended March 31, 2022. The Company reported worldwide sales of $1,957 million, approximately flat versus the first quarter of 2021. North America sales of $1,667 million represented 85 percent of total company sales and increased slightly from $1,663 million in 2021. International sales of $290 million represented 15 percent of total company sales and increased one percent. Sales in the first quarter of 2022 were largely impacted by continued supply chain challenges reducing shipments, despite healthy demand, attractive pricing trends, and low dealer inventory levels, compared to a particularly strong first quarter in 2021.

As reported, first quarter net income of $70 million decreased 48 percent and diluted earnings per share (EPS) of $1.14 decreased 46 percent compared to the first quarter in 2021. Adjusted net income for the quarter was $79 million, down 46 percent and adjusted EPS of $1.29 was down 44 percent, in each case as compared to the first quarter of 2021.

Gross profit margin contracted 438 basis points to 20.3 percent. Adjusted gross profit margin of 20.3 percent contracted 447 basis points driven primarily by inflationary pressures and supply chain challenges, partially offset by strong pricing, a lower promotional environment and sourcing mitigation efforts.

Operating expenses were $313 million in the first quarter of 2022 compared to $313 million in the first quarter of 2021. Operating expenses, as a percentage of sales, were flat in the first quarter 2022 compared to the first quarter of 2021.

*Note: the results and guidance in this release, including the highlights above, include references to non-GAAP operating measures, which are identified by the word “adjusted” preceding the measure. A reconciliation of GAAP / non-GAAP measures can be found at the end of this release.

CEO COMMENTARY

Sales for this quarter remained relatively flat to last year, depressed by continued supply chain pressures. While much of our focus centers on navigating the highly volatile and challenging supply chain environment, demand for our industry-leading products and services remains healthy, as we continued to see high levels of pre-sold orders and low cancellations, strong short- and long-term repurchase rates, and record levels of PG&A attachments. We are making strategic investments in both innovation and operations to enable our long-term growth plans and productivity needs and strengthen our position as the global leader in powersports. The Polaris team remains laser focused on executing against our plans for this year and delivering for our customers, dealers and shareholders.

-- Mike Speetzen, Chief Executive Officer of Polaris Inc.

Off-Road segment results were primarily driven by these factors:

• Sales were driven by growth in snowmobiles, commercial & government and defense, as well as robust pricing actions on new and pre-sold orders. This growth was partially offset by lower ORV sales.
• Parts, Garments and Accessories (PG&A) sales increased eight percent.
• Gross profit margin performance was primarily driven by supply chain constraints and higher input costs, partially offset by increased pricing and lower promotional costs.
• Polaris North America ORV unit retail sales were down high-twenties percent. Estimated North America industry ORV unit retail sales were down high-teens percent. Polaris North America snowmobile unit retail sales for the 2021-2022 season ending March 31, 2022 were down approximately 15 percent with the industry down mid-single digits percent.

On-Road segment results were primarily driven by these factors:

• Sales were impacted by lower shipments driven by supply chain challenges, despite strong demand, pricing and record low dealer inventory levels.
• PG&A sales increased 19 percent.
• Gross profit margin performance was driven primarily by favorable product mix and lower promotions costs, offsetting higher input costs driven by supply chain constraints.
• North America unit retail sales for Indian Motorcycle were down approximately 30 percent. North America unit retail sales for the comparable motorcycle industry were down almost ten percent.

Marine segment results were primarily driven by these factors:

• Sales results were driven by favorable mix and pricing.
• Gross profit margin performance was flat with increased pricing offset by higher input costs related to supply chain constraints.

Aftermarket segment results were primarily driven by these factors:

• The five percent decrease in segment sales was driven by Transamerican Auto Parts sales, which decreased nine percent from $193 million to $175 million in the first quarter of 2022. Powersports Aftermarket sales increased 16 percent.
• Gross profit margin performance declined largely driven by supply chain challenges and inflationary pressures.

2022 BUSINESS OUTLOOK

The Company continues to expect 2022 sales to be in the range of $9,215 million to $9,455 million, an increase of 12 percent to 15 percent over 2021. The Company continues to expect adjusted EPS to be in the range of $10.10 to $10.40 for the full year 2022, an increase of 11 to 14 percent from 2021.