Polaris Inc. ( PII ) announced its third-quarter results on Tuesday, topping analyst estimates in both earnings and revenue. The company’s earnings declined year over year, while revenue rose.

Polaris reported quarterly earnings of 41 cents per share, sharply topping analysts’ estimates of 1 cent per share; however, earnings were down 43.8% from 73 cents per share in the same quarter a year earlier.

Revenue for the quarter came in at $1.84 billion, exceeding the consensus estimate of $1.75 billion by 5.6% and marking a 7% year-over-year increase from $1.72 billion.

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The company reported an adjusted gross profit margin of 20.7%, compared with 20.8% in the same period a year ago, a decrease of eight basis points primarily driven by tariffs and incentive compensation headwinds, partially offset by mix and operational efficiencies compared to the third quarter of 2024.

Adjusted EBITDA margin was 7.6%, compared with 9.2% a year ago. Operating expenses were $380 million in the third quarter of 2025, compared to $313 million in the third quarter of 2024.

The company ended the quarter with cash and cash equivalents of $335.5 million.

Segment Performance

The Off-Road segment posted an 8% year-over-year increase in sales, driven by a favorable product mix in off-road vehicles, with the gross margin improving to 22.3% from 21.2% a year ago.

The On-Road segment saw sales decline 3% year over year amid softer market demand. Accessories, parts, and garments (PG&A) sales grew 6%, but the mix shift weighed on margins, which fell to 16.0% from 16.9%.

The Marine segment delivered a 20% year-over-year sales increase, supported by higher volumes of entry-level pontoons, though the margin dipped to 11.4% from 12.2% due to a negative mix.

CEO Commentary

Mike Speetzen, Chief Executive Officer of Polaris, stated, “I’m incredibly proud of the Polaris team — their efforts are reflected in this quarter’s performance. Our operational discipline, dealer inventory alignment, and innovation pipeline have us positioned to deliver for dealers and customers, drive profitable growth and create greater value for our shareholders. Building on our current momentum, we remain committed to executing our long-term strategy and I am confident in the Polaris team’s ability to finish the year strong.”

Tariffs Impact

The company expects tariffs to have an estimated profit and loss impact of about $90 million in fiscal 2025, with approximately $40 million expected in the fourth quarter alone.

The updated total tariff impact estimate now stands between $130 million and $140 million, driven mainly by tariffs on imports from China, Mexico, and other regions, along with commodity-related costs and Section 301 tariffs.

To mitigate these effects, the company is executing a supply chain and manufacturing strategy aimed at reducing its China spending by around 80% compared to 2024 levels, while ensuring that over 95% of U.S. imports from Mexico qualify under USMCA.

It is also negotiating cost pass-throughs with suppliers, reassessing market and pricing strategies, engaging with government officials, and closely reviewing discretionary spending to offset the financial impact.

Outlook

Polaris cut its full-year 2025 adjusted EPS guidance to a loss of 5 cents from a prior forecast of $1.14, compared with the analyst consensus of a 46-cent loss.

The company also narrowed its 2025 sales outlook to a range of $6.90 billion to $7.10 billion, from the previous $6.888 billion to $7.104 billion range, aligning closely with the $6.898 billion estimate.

Price Action: PII shares were trading lower by 0.10% to $71.12 at last check Tuesday.

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