Quarterly profit returned as Polaris expects $215 million in tariffs this year
Polaris, the Minnesota-based maker of off-road vehicles and boats, is aiming to revive the share-repurchase program it set aside in 2024, Chief Financial Officer Bob Mack said in an interview with The Wall Street Journal’s Kristin Broughton published Friday in the Morning Ledger, the CFO Journal team’s daily corporate-finance newsletter.
Polaris suspended buybacks as it worked to reduce dealer inventory following a postpandemic slump in retail sales. Before the pause, the company used repurchases to offset dilution from its employee stock plans and to reduce its overall share count. Mack said a 2027 restart would carry the same objective, starting with offsetting dilution.
“That’s where we would go first if we have a little bit of extra cash,” Mack said.
The company’s earnings report this week offered a snapshot of a business turning around even as external challenges persist. Polaris earned $38.4 million in the third quarter, compared with a net loss of $15.8 million in the year-ago quarter. Sales rose 11%, to just over $2 billion.
Tariffs and inflationary pressures, including from trucking, fuel, aluminum and steel, remain significant headwinds, according to the company. Polaris said it expects to pay $215 million in tariffs this year and estimates its commodity and logistics costs will be $70 million higher than in 2025.
Polaris is using cash from internal cost savings, as well as a roughly $80 million tariff refund, to pay down debt. Its net leverage — net debt divided by earnings before interest, taxes, depreciation and amortization — declined to 2x as of Sept. 30 from 3.4x at the beginning of the year. Strategic investments and dividends are also top priorities for the company.
Whether Polaris can allocate cash next year to buybacks depends on factors including the success of new product launches and its ability to reap additional efficiency gains, Mack said. The prospect of ongoing inflation in commodities adds uncertainty to the 2027 plans.
“Aspirationally, that’s my goal,” Mack said, noting the company has not set its budget or cash forecast for 2027.
The same newsletter reported broader economic figures alongside the interview. The Commerce Department said Thursday that U.S. gross domestic product — the value of all goods and services produced across the economy — rose at a 3.4% annual rate in the third quarter, a figure adjusted for inflation and seasonality and the fastest pace in a year. Business investment surged, driven by the artificial-intelligence build-out, and consumers continued to spend at a healthy clip despite high gas prices and other affordability concerns, the report said.
The newsletter also reported that the U.S. national debt reached 100% of gross domestic product for the fiscal year that ended Sept. 30, hitting the triple-digit mark for the first time since 1946. With Thursday’s release of third-quarter output, the publicly held debt of $32.2 trillion as of Sept. 30 equaled 100.03% of fiscal-year gross domestic product, up from 99.4% at the end of fiscal 2025, though below the Congressional Budget Office’s February forecast of 100.6%. The 1946 record of 106% reflected the heavy borrowing needed to win World War II.
The newsletter further noted that home-security company ADT has agreed to be acquired, in cash, by Thrive Holdings, an investment vehicle formed by Josh Kushner’s venture-capital firm, Thrive Capital.