Polaris Inc ( PII ). shares are trading lower on Tuesday after the company reported third-quarter results.

Quarterly adjusted earnings per share totaled 73 cents, missing the analyst consensus estimate of 88 cents.

Quarterly sales of $1.72 billion, which fell 23% year-over-year, missed the street view of $1.77 billion. Adjusted gross profit margin fell 184 basis points year over year to 20.8%.

Primary factors affecting third-quarter sales were lower volume, product mix, and net pricing driven by elevated promotional activity.

Adjusted EBITDA margin in the quarter under review contracted 333 basis points year over year to 9.2%.

In the third quarter, market share for off-road vehicles (ORV), motorcycles, and pontoons declined modestly. Powersports retail sales fell by 7% compared to last year, primarily due to decreases in ORV, motorcycles, and marine sales, with ORV retail down by 3%.

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“We expect a challenging retail environment throughout the rest of 2024 and into next year,” said Mike Speetzen, Chief Executive Officer of Polaris.

Polaris exited the quarter with cash and equivalents worth $291.3 million, with net inventories at the quarter-end of $1.998 billion.

Outlook: Polaris has revised its 2024 sales outlook to a decline of about 20% compared to 2023, up from the previous estimate of a 17% to 20% decrease.

It now expects adjusted diluted EPS to drop approximately 65% relative to 2023, compared to the earlier forecast of a 56% to 62% decline.

Price Action: PII shares are trading lower by 5.16% to $76.06 at last check Tuesday.

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