Arctic Cat Inc. stock fell more than 25 percent in Thursday trading after the company said it badly missed sales forecasts for its second quarter.
Currency exchange rates made it more difficult for Arctic Cat to sell its snowmobiles in Canada and Russia, the Plymouth-based company said.
Arctic Cat reported sales of $211.2 million for the second quarter ended Sept. 30 and net earnings of $11.2 million, or 85 cents per share. Analysts were expecting the company to report sales $236 million and earnings of $1 per share.
"The company executed well in the second quarter on our strategies to reposition the business for a return to growth in fiscal 2017 and beyond," said the company's president and CEO, Christopher Metz, in the company's news release. "However, sales and earnings in the quarter were dampened by a greater than anticipated Canadian currency exchange impact and a softer [all terrain vehicle/recreational off-road vehicle] retail market industrywide."
Shares fell $5.72 to close at $16.64, a 52-week low.
The company did say it was on track with strategies to reposition the company for further growth by improving its dealer network, reducing inventories, pursuing partnerships and bolt-on acquisitions and by introducing new products.
During the second quarter, it introduced new ATV/ROV products and previewed a single-ski snow vehicle.
Arctic Cat also lowered its full-year revenue and earnings outlook for full-year fiscal 2016. It now expects full-year sales in the range of $665 million to $675 million and earnings of 5 to 15 cents per share, down from prior guidance of $690 million to $705 million in sales and earnings of 80 to 95 cents per share.