A look at the performance
Sales for the quarter shot up 34 per cent, reaching $98.5 million compared to last year due to high volumes in both snowmobiles and all-terrain vehicles (ATVs). The company posted a net loss of 49 cents per diluted share, which was an improvement over a loss of 52 cents per diluted share a year ago. The first and the fourth quarters are seasonal in nature, generally witnessing losses that are made up in the second and third quarters.
The increase in sales revenue was mainly because of strong demand for its ATVs and its all-new Wildcat vehicles. Another driver for the ATV sales was the growth in international business. In fact, Arctic Cat’s ATV sales for the fourth quarter were up 58 per cent from last year, coming in at $75.8 million in the quarter. Even the snowmobile sales surged on account of increased volumes, though an increase in sales incentives had a negative impact.
The company also witnessed growth in its Prowler side-by-side business because of the launch of HDX heavy-duty utility vehicle.
Innovation: The key driver
The major contributors to Arctic Cat’s revenue were its innovative and new products that were launched. The Plymouth-based company launched 23 new models in the snowmobile segment. Though the snow conditions were not very good in North America, the new snowmobile models attracted customers to the segment. The company also changed its pricing and product mix, which pushed sales in the industry. The increase in ATV and snowmobile sales had a positive effect on the revenue from accessories sales for the same, including ATV parts and garments.
Planning for the future
Arctic Cat plans to continue to invest largely in product development going forward. The company is expected to do well in the coming months since it is on the verge of launching five new models for its snowmobile industry segment. These models, along with the 23 new models launched this year, are expected to help it increase its market share.