Polaris, parent company of Indian Motorcycle, has revealed a huge drop in profits in the first quarter of 2022 compared to the same time in 2021. This includes a 30% drop in revenue for Indian Motorcycle.

Polaris Profit Drop of 48% is a Significant Blow

If the global Covid pandemic gave with one hand, it also continues to take away with the other. Through 2020 and 2021, manufacturers saw unprecedented rises in revenue as bored, locked-down consumers, deprived of spending their hard-earned money on travel, instead bought luxury items such as motorcycles and related goods.

But the pandemic also created problems in the supply chain, meaning many components just weren't available, leading to production being forced to slow down and dealer inventory suffering. Also, consumer worries about inflation have meant wallets stay in pockets more readily than before.

With the lifting of restrictions, an interesting - if worrying - trend has emerged, that of dwindling profits. Polaris, Canadian owner of Indian Motorcycle has announced that group profits are down a staggering 48% for Q1 2022 over the same period in 2021. Likewise, Indian Motorcycle profits were down less but a still-not-insignificant 30%.

It's been a roller-coaster ride for manufacturers. Polaris posted a 70% sales increase in Q1 2021 over the same period in 2020. In 2022, there has been a 22% dip over 2021. A $70 million profit for Q1 2022 might not seem like a disaster, but when compared to 2021, that loss of 48% has to hurt.

“Sales for this quarter remained relatively flat to last year, depressed by continued supply chain pressures,” claimed Polaris CEO Mike Speetzen. “While much of our focus centres on navigating the highly volatile and challenging supply chain environment, demand for our industry-leading products and services remains healthy, as we continued to see high levels of pre-sold orders and low cancellations, strong short- and long-term repurchase rates, and record levels of PG&A (parts, garments and accessories) attachments.”

If Indian Motorcycle sales were down by 30%, then at least the sales of PG&A rose by 19%.

Armed with the data, Polaris hopes to institute new measures to help the brand and its subsidiaries weather the storm.

“We are making strategic investments in both innovation and operations to enable our long-term growth plans and productivity needs and strengthen our position as the global leader in powersports,” added Speetzen. “The Polaris team remains laser-focused on executing against our plans for this year and delivering for our customers, dealers, and shareholders.”

It seems that the impact of Covid, even as we emerge from lockdowns and travel restrictions, is going to be the gift that keeps on giving, even if we don't want the resulting gifts left under the Christmas tree.