Polaris Eliminates 100 Positions Following a Disappointing Q4
Despite posting a record $4.7 billion in sales in 2015, Polaris Industries Inc. announced Tuesday that it had eliminated about 100 salaried positions worldwide. Half of those affected were employed in the Twin Cities, according to a report by the Star Tribune. Less than 10 people at the Roseau, Minn., plant were laid off.
"Over the last several months, we have taken actions to reduce overall employment costs by approximately 7% to right-size our costs with our growth projections," said Polaris spokeswoman Marlys Knutson. "Much of this has taken place as a result of thoughtful attrition, reduced use of contractors and temp agency workers, and closing of open and planned/budgeted positions."
Polaris did experience a disappointing end to 2015. In its end-of-year financial summary, the snowmobile and ATV manufacturer reported an 18% decrease in net income and a 13% drop in sales in the fourth quarter compared to the previous year's Q4. Snowmobile sales, in particular, were down 25%, which the company attributes primarily to delayed shipments in the fourth quarter. To its credit, Polaris did outperform the overall snowmobile market with increased market share season-to-date ending Dec. 31, 2015.
“While 2015 was a difficult year, we did manage to grow market share in each of our businesses and increased sales and earnings per share for the sixth consecutive year," said Scott Wine, Polaris' Chairman and Chief Executive Officer. "That said, our performance failed to meet our earlier projections, as both external and internal challenges restrained growth and profitability. The strengthening dollar and weakening oil markets combined with an unseasonably warm winter constrained demand for off-road vehicles and snowmobiles, placing pressure on dealer inventory and forcing us to curtail shipments in the fourth quarter. While our execution to plan did not meet our historically high standards, we have taken numerous actions to position Polaris for better performance in 2016."
Polaris did not sit idle in 2015, expanding the award-winning AXYS platform into seven new MY2016 RMK mountain sleds and introducing more than 500 new PG&A accessories. The company also had a number of big-time acquisitions, including Timbersled and 509. The OEM also broke ground on a new ORV manufacturing plant in Huntsville, Ala., where production is expected to begin in the second quarter of 2016.
Wine expects 2016 to be another volatile year for the powersports industry. However, he noted that it's not the first time Polaris has had to deal with "difficult economic climates."
“We will continue to optimize dealer inventory, aggressively manage operating costs and other risk exposures, and provide our end-consumer with products and services that exceed their expectations," said Wine. "Concurrently, we will continue to invest in projects that accelerate future growth and our lean journey."
Polaris is a major employer in northwest Minnesota and a major economic driver for the small town of Roseau (population~2,600), where the company was founded in 1954.