Polaris Inc. has released first quarter 2021 results with reported sales of $1,951 million, up 39% from reported sales of $1,405 million for the first quarter of 2020. The Company reported first quarter 2021 net income of $134 million, or $2.11 per diluted share, compared with a net loss of $5 million, or $(0.09) per diluted share, for the 2020 first quarter. Adjusted net income for the quarter ended March 31, 2021 was $146 million, or $2.30 per diluted share compared to $14 million, or $0.22 per diluted share in the 2020 first quarter.
Retail demand and industry tailwinds continued to be strong during the quarter driving higher Company performance as both new and existing customer growth accelerated across all segments and regions of the Company.
First Quarter Results
Gross profit increased 64% to $481 million for the first quarter of 2021 from $293 million in the first quarter of 2020. Reported gross profit margin was 24.6% of sales for the first quarter of 2021, up 378 basis points compared to 20.8% of sales for the first quarter of 2020. The improvement in gross profit was driven primarily by higher volumes and lower promotional costs during the quarter, partially offset by higher logistical costs and plant inefficiencies related to the supply-chain constraints. Adjusted gross profit for the first quarter 2021 was $483 million, or 24.7% of adjusted sales compared to the first quarter of 2020 adjusted gross profit of $298 million, or 21.2% of sales. Adjusted gross profit for the first quarter of 2021 and 2020 excludes the negative impact of $2 million and $5 million of restructuring and realignment costs, respectively.
Operating expenses increased 2% for the first quarter of 2021 to $313 million from $307 million in the same period in 2020. Operating expenses were higher due to an increase in administrative expenses.
Off-Road Vehicles (“ORV”) and Snowmobiles segment sales, including PG&A, totaled $1,232 million for the first quarter of 2021, up 50% percent compared to $824 million for the first quarter of 2020 driven by broad based strength across ATVs, side-by-sides and Snowmobile sales. PG&A sales for ORV and Snowmobiles combined increased 51% in the first quarter of 2021 compared to the first quarter last year. Gross profit increased 62% to $327 million in the first quarter of 2021, compared to $202 million in the first quarter of 2020. Gross profit percentage increased 208 basis points during the 2021 first quarter compared to the prior year due to strong retail demand driving lower promotional and floor-plan finance spending, partially offset by supply chain constraints.
- ORV wholegood sales for the first quarter of 2021 increased 39%. Polaris North American ORV retail sales increased approximately 80% for the quarter with side-by-side vehicles up high 60% and ATV vehicles up about 100%. The North American ORV industry was up about 60%t compared to the first quarter last year.
- Snowmobile wholegood sales in the first quarter of 2021 were $75 million compared to $6 million in the first quarter last year. Polaris snowmobile retail sales were up low 20% during the first quarter of 2021 and up mid 20% for the twelve-month season ending March 2021. North American industry retail was up mid-single digits percent for the first quarter and up mid-teens percent for the season ending March 2021.
Given the 2021 first quarter results, and the expected continued strong retail demand, the Company is increasing its full year sales and earnings guidance and now expects adjusted net income to be in the range of $9.00 to $9.25 per diluted share, compared with adjusted net income of $7.74 per diluted share for 2020 with full year 2021 sales now in the range of $8,300 to $8,500 million, up 18-21%.