Slumping ATV sales have derailed Arctic Cat yet again.
The snowmobile and ATV maker on Tuesday reduced its profit guidance for the second time in four months, saying it now expects to lose up to 8 cents a share for the fourth quarter and post a loss of 20 to 28 cents per share for the full fiscal year.
A year ago, the Thief River Falls manufacturer produced earnings of $1.15 per share for its fiscal 2007.
The company will post its fourth-quarter and year-end results in mid-May. Fourth-quarter sales are expected to be $167 million to $169 million, while full-year sales will drop from January's estimate of $645 million to $665 million to a revised $620 million to $622 million. A year ago, sales were a record $782.4 million.
CEO Chris Twomey blamed the poor results equally on three key issues.
ATV sales are continuing to decline as consumers pull back on discretionary spending. In terms of percentage, North American ATV retail sales are down industrywide "in the mid- to high teens," he said.
Arctic's second problem stemmed from a large retail customer that reduced orders after deciding to sell Arctic Cat's ATVs only in its largest stores because of space concerns.
Lastly, Arctic Cat experienced its first parts supply interruption in its history during the quarter. A part for its popular Prowler utility vehicle was affected while the company was transitioning to a different supplier, which forced the company to temporarily stop taking orders.
In reaction to the news, Arctic Cat's stock finished down 92 cents at $6.45 in after-hours trading, which would be a new 52-week low.
"I want to reiterate to all of you how disappointed I am with this and how committed I am to seeing that we return to increased growth in revenues and profits as quickly as possible," Twomey told investors during a conference call.
Dee DePass • 612-673-7725
