Polaris Industries Inc. was having a difficult second half of the year even before winter didn't come.
With mild weather and little snow so far in Minnesota and other key markets for its snowmobiles, Polaris on Thursday told investors that its sales and profits for 2015 will be sharply lower than it previously thought.
The company's stock fell 11 percent, or $10.28, to close at $85.01, its lowest level since February 2013 and 45 percent below where it started the year.
Sales of off-road vehicles, chiefly all-terrain vehicles or ATVs, also are below the company's expectations. Polaris said it slowed down shipments to dealers to allow them to sell their existing inventory.
"We expected the fourth quarter to present a challenging retail environment for [off-road vehicles] and snowmobiles, but consumer traffic and retail sales have slowed beyond previous expectations," Polaris CEO Scott Wine said in a statement.
When the company reported third-quarter results in October, Polaris lowered its growth expectation for full-year sales to around 10.5 percent from the previous forecast of 11 percent. On Thursday, it told investors to expect sales growth of 4 to 5 percent instead.
Polaris also said it now expects full-year earnings per share growth of 1 to 2 percent, below its previous guidance of as much as 12 percent.
For 2016, Wine said the company anticipates sales and profits "will improve modestly" over this year.
Off-road vehicle sales have been lower than expected throughout the country in the last two months, Polaris said. And snowmobile sales are down about 15 percent from where they were a year ago because of "the unusually warm weather patterns in the U.S. snowbelt," the company said.
The company's stock began tumbling after it announced second-quarter results in July, which, despite hitting a record for overall revenue, showed only a modest gain in sales of its ATVs, its biggest revenue producer. The company's performance was also pressured at the time by a mistaken bet on a paint process that delayed shipments of its motorcycles. In the third quarter, ATV revenue grew by 3 percent, below the 12 percent growth that the broader company experienced.
In its announcement Thursday, Polaris said it aims for dealers to work though their buildup of ATV inventories this month and expects stores will finish the year with fewer off-road vehicles in stock than they did at the end of 2014. With mild winter conditions likely to prevail over the next few weeks, dealers will likely end the year with more snowmobiles than they had on hand a year ago, the company said.