Polaris Inc. (NYSE:PII) posted better-than-expected fourth-quarter earnings as stronger shipments helped lift revenue across its core businesses on Tuesday.
Still, the company struck a cautious tone on the year ahead, with pressure on margins and a softer earnings outlook weighing on the stock.
The company reported fourth-quarter adjusted earnings per share of eight cents, beating the Street view of six cents.
Quarterly sales of $1.922 billion (+9% year over year) outpaced the analyst consensus estimate of $1.807 billion, gaining from higher shipment volumes to meet demand.
Fourth-quarter 2025 results included $288 million in impairment and other charges, mostly noncash, after the Indian Motorcycle business was classified as held for sale.
The quarter also reflected an additional $54 million in noncash intangible-asset impairment tied to the company's Off Road segment.
Segments
Off Road sales rose 11% to $1.596 billion. On Road sales gained 4% to $187.2 million. Sales in the Marine segment gained 1% to $138.3 million.
North America generated $1.623 billion in sales, accounting for 84% of the company's total revenue. The region's sales rose 10% from $1.481 billion in the year-ago period.
International sales of $299 million represented 16% of total sales and increased 9% year over year.
Margins
Gross profit increased to $384.2 million, compared with $357.9 million.
In the quarter under review, adjusted gross profit was $389.5 million, higher than $369.5 million.
The adjusted gross profit margin decreased 77 basis points to 20.3%, primarily driven by tariffs and net price, partially offset by positive mix within ORV and volume.
Adjusted EBITDA was $98.1 million, lower than $168.2 million. Adjusted EBITDA margin contracted to 5.1% from 9.6%.
The company exited the quarter with cash and equivalents worth $138 million.
Fiscal 2026 Outlook
Polaris said the separation of its Indian Motorcycle business is expected to close by the end of the first quarter. The company also warned of a meaningful tariff headwind, with the impact expected to be heavier in the first half of the year.
Polaris forecast fiscal 2026 adjusted earnings of $1.50 to $1.60 a share, below the analyst consensus estimate of $1.74.
The company also projected 2026 sales of $7.224 billion to $7.367 billion, above the Street view of $7.035 billion.
PII Price Action: Polaris shares were down 6.66% at $64.51 during premarket trading on Tuesday, according to Benzinga Pro data.
