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    Arctic Cat Announces Q1 Results

    Posted by Emily Hare
    on Tuesday, August 2, 2016

     Arctic Cat Inc. reported that snowmobile sales were down 30.4% ($40.5 million vs. $58.2 million in the prior-year quarter) in the fiscal 2017 first quarter ended June 30, 2016. Overall, Arctic Cat reported a net loss of $10.6 million, or $0.81 per share, on net sales of $104.9 million for Q1. The impact of unfavorable foreign currency exchange movements year-over-year was $0.20 per share. In the prior-year quarter, Arctic Cat reported a net loss of $1.1 million, or $0.08 per share, on net sales of $134.4 million.

    According to the report, the sharp decline in snowmobile sales can be chiefly attributed to a difference in the timing of shipments. Christopher Metz, Arctic Cat’s president and chief executive officer, stated: “At our March dealer show, we launched one of our most exciting snowmobile lines in years, with many award-winning models. We believe we are well positioned for retail growth in our snowmobile business this year.”

    Sales of parts, garments and accessories (PG&A) in the fiscal 2017 first quarter were down 11.5% to $20.6 million versus $23.3 million in the prior-year quarter. This decline is primarily attributable to an overall weakening of the powersports market, as well as lower pre-season sales of snow-related items, resulting from poor snowfall last winter in key geographies.

    “As expected, Arctic Cat’s first-quarter sales were lower compared to the year-ago quarter," said Metz. "Importantly, we made progress on reducing dealer inventory, and further strengthened and expanded our dealer base, despite a weaker powersports market and continued foreign currency headwinds. However, the first-quarter per share loss was greater than anticipated, chiefly due to the timing of snowmobile shipments that shifted to the second quarter, as well as a more competitive retail environment that led to higher promotional spending than planned.”

    The company’s strategies to reinvigorate growth include: dramatically improving Arctic Cat’s dealer network; ramping up end-user focused new products; pursuing strategic partnerships; and creating a brand marketing powerhouse.

     “We continue to focus on implementing our strategies and are encouraged by the significant progress we are making to reposition the company for long-term growth," said Metz. "We anticipate reporting stronger financial results in the second half of this fiscal year, driven by planned new product launches and contributions from our other key strategic initiatives.”

    As part of Arctic Cat’s aggressive new product development plans, the company introduced the first wave of its 2017 model year ATVs and ROVs, including six all-new models and a total of 27 class-leading machines for all categories of off-road work and play. These new 2017 models include the versatile and powerful HDX Crew six-passenger utility vehicle, the Prowler utility vehicle and the Alterra TRV with 2-up passenger seating. In the first quarter, sales of Arctic Cat’s all-terrain vehicles (ATVs) and recreational off-highway vehicles (ROVs) totaled $43.7 million, down 17.3% compared to prior-year sales of $52.9 million, but Arctic Cat's financial outlook assumes those numbers will improve.

    “Consumers are very enthusiastic about our newest offerings, such as the HDX Crew and Prowler 500 utility side-by-sides," said Metz. "These vehicles provide innovative features at a great value. Our latest introductions are fueling sales and provide an indicator of what launching exciting new products can do for our business. Further, we continue to make progress on implementing our new product roadmap. Within the current 2017 fiscal year, we expect to unveil the first of these industry-leading new products, with continued new product introductions thereafter.”

    Photo by Ryan Thompson – RLT Photos

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