Polaris needs to catch up in profitability

The Minnesota-based Polaris, with 2020 revenues of $8.9 billion, is larger than Valcourt, Que.’s BRP, with sales last year of $6.1 billion. Polaris has a wider product lineup than BRP. It includes boats and motorcycles, and military and commercial vehicles.

Polaris has been patiently nurturing the 120-year-old boutique Indian Motorcycle brand, a labour more of love than profit-growth potential. Polaris is also struggling in its aftermarket business with parts for Jeep and trucks. (Transamerica Auto Parts, or TAP.)

Polaris does have pole position on EVs, vowing to have some models on the market by year’s end. But the firm’s R&D budget is spread across 30-plus brands sold in more than 100 countries.

In recent years that diversified strategy has yielded disappointing financial results. Polaris earnings have dropped by 41 per cent in the past five years, to $160 million in 2020.

During that same period, the value of Polaris shares has increased a modest 17 per cent, to a current $147.

A change in strategy might follow the November departure of CEO Scott Wine for the top post at a major farm-equipment maker.

The company’s future leadership is a question mark. Wine’s successor, Mike Speetzen, is serving on an interim basis. Whoever takes the helm at Polaris on a permanent basis will encounter resistance to tampering with Wine’s legacy of more than tripling Polaris’ revenues during his long, 12year tenure.