Incremental Supply Chain Improvement Offers Hope Market Share Losses Begin to Reverse at Polaris

Supply chain congestion remains the key issue keeping wide-moat Polaris from achieving normalized throughput, although it appears the acquisition of inputs is beginning to ease. A modestly improving logistics situation allowed the firm to ship 10,000 more off road units than in its first quarter. Despite some progress, second-quarter retail sales were depressed, down 23%, and the firm saw market share declines across its ORV, off road, and marine segments, which we believe stems from the dysfunctional supply chain. We expect market share losses to reverse as parts availability improves over the next year, supporting our hypothesis that Polaris will continue to carry a top-notch brand intangible asset.