Polaris (PII) shares fell sharply Tuesday, after the recreational vehicle maker reported mixed results for the second quarter, triggering mixed commentary from Truist analyst Michael Swartz.
The stock traded down 6% at $130.79 at last check, leaving it up 6% for the past six months.
As for earnings, the company’s adjusted profit beat the Bloomberg analyst consensus, while revenue matched expectations, and North American retail sales dropped 28%.
“While this marks a reversion from the share improvement trend in recent quarters, it appears to be entirely driven by limited motorcycle product availability,” Swartz said, according to Bloomberg.
Polaris’ off-road vehicle market share grew in the second quarter, in the face of “the severe shortage in dealer stocking levels.”
Swartz rates the stock hold and has a $150 price target.
Polaris suffered from tough year-on-year comparison and inventory constraints, he said. The 28% slide in North American retail sales exceeded the industry’s slump in the low-20% range in the second quarter.
Coming out of the earnings report, investors will likely concentrate on the company’s reduced market share for the second quarter and the “acute supply chain pressures that are likely limiting the pace of restocking,” Swartz said.
The suppliers for the athletic apparel/shoe company are Eclat and Quang Viet. Hong Kong-listed Shenzhou International, another Nike supplier, also unveiled a production reduction Monday, Bloomberg reports.
And Reuters reported earlier that two other Nike shoe suppliers are curbing production.