Despite the high quality and a brand name that is literally synonymous with top-quality world class all-terrain-vehicles (ATVs), Polaris reveals that their profit for year 2006 remains low. In fact, representative from Polaris report that there is a decline in sales because of many different factors. Not only is the sales for ATVs, sale for Polaris snowmobiles are also slow-moving. Last year, 2005, Polaris reported a $48.3 million in sale but this year, Polaris ATVs have not been selling all that well and the sale took a nosedive to $42.5 million this quarter. The only good thing to happen to Polaris is that the sale of the motorcycles went up by 60% in the quarter, which representatives said could not cover the loss from other vehicles.

It's been said that the slow sale during the third quarter of 2006 is a result of lower production in the year. Polaris, like other ATV producers have to admit and take into consideration the overall declining trend of the industry. As a result, more and more retailers are reducing their inventories of ATVs and snowmobiles, hence, as demand lessens, so will production.

The declining trend and slow demand for Polaris ATVs and snowmobiles is hard to stomach for this ATV giant…and the reducing profit has an adverse effect on the price per share of the company too. From $3.08-$9.20 per share, the price of Polaris share now costs $2.68 - $2.73 per share. Due to the decrease in inventory and demand in the ATV industry, in general, Polaris expects further decline, estimating the decline to be about 11% or 12%.

Is this an indication of Polaris being ousted by its rising competitors? No, we don't think so. This is an industry-wide problem that every ATV manufacturer is feeling – the difference is in the significance and percentage. ATV is a sport that continues to generate worldwide interest and although the sales for Polaris ATVs and snowmobiles are declining, Polaris thinks that there is still a lot of room for growth in the near future.