Polaris Inc released second quarter 2022 results, which ended June 30, 2022. The Company reported worldwide sales of $2,063 million, up 8% versus the second quarter of 2021. North America sales of $1.7 million represented 85% of total company sales and increased 9% from $1.6 million in 2021. International sales of $315 million represented 15% of total company sales and increased 1%. Sales in the second quarter of 2022 were largely impacted by strong mix and pricing offset by volume declines related to continued supply chain challenges reducing shipments and lower dealer inventory levels. 

As reported, second quarter net income from continuing operations attributable to Polaris of $142 million decreased 9% and diluted earnings per share from continuing operations (EPS) of $2.42 was down 7%, in each case as compared to the second quarter of 2021. 

Gross profit margin contracted 303 basis points to 23%. Adjusted gross profit margin of 23% contracted 312 basis points driven primarily by increased costs including raw materials, freight and inefficiencies associated with supply chain challenges, partially offset by strong pairing. 

Operating expenses were $292 million in the second quarter of 2022 compared to $300 million in the second quarter of 2021 due to lower sales and marketing as we prudently navigate through supply chain challenges. Operating expenses, as a percentage of sales, of 14.1% were down in the second quarter 2022 compared to the second quarter of 2021. 

"Our results during the second quarter reflect our team's commitment to our customers through industry-leading innovation and exceptional execution, despite the ongoing supply chain constraints impacting the global economy," said Mike Speetzen, CEO of Polaris Inc. "While we are closely watching a number of demand indicators to understand the resilience of the consumer in this environment, we continue to see a healthy consumer and stable demand. In the quarter, some easing of logistics complexities, commodity costs, and certain supply chain bottlenecks helped to support sequential margin improvement and increased shipment volume." 

"Our focused strategy of being the leading player in power sports, coupled with the significant opportunity to get back to optimal dealer inventory levels, gives us confidence in our ability to drive continued performance for Polaris and value creation for our shareholders."

Polaris has updated its 2022 guidance expectations to reflect the divestiture of TAP early in the third quarter. The Company now expects 2022 sales to increase 13% to 16% versus prior guidance of 12% to 15%. The Company now expects adjusted diluted EPS from continuing operations attributed to Polaris Inc. common shareholders to be in the range of $10.10 to $10.30 for the full year 2022, an increase of 11% to 14% from 2021. 

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