PII
#<UNK>, you know us well enough.
We don't talk about future product plans.
I'll leave it at that.
They'll both be accretive, but very slightly accretive for the full year.
I wouldn't adjust your estimates on it.
Right.
It's embedded into our guidance on both top and bottom line.
They're both small companies right now, that are niche players, that we think can really benefit us going forward, with attracting a different customer set and different products.
But the impact is pretty small.
And, in fact, early on in Q2, as we get through the transition and the integration and all that, as you know, there's always those transaction costs that will hurt us in the near term.
But we're excited about both of them.
<UNK>, I think we've been pretty clear on our remarks.
I think we're critiquing ourselves, and I think what we're stating unequivocally is, we think we can and should have done better on that.
We want to provide more flexibility.
There is certainly an education process that will take time for them.
And they have been asking for ---+ very much so ---+ quicker lead times and more predictable ship lead times.
That's the two biggest complaints that they used to have with us.
This is addressing those issues.
But I also understand that they want flexibility to run their business.
And we need to be able to do all of those things.
And that, frankly, is what we're undertaking to execute here in the upcoming weeks.
We have an incredibly strong dealer network.
And when the system works best is when there's strong profitability in all parts of it.
One of the ways that our dealers are more profitable is, they carry less inventory.
And to the extent that we can reduce lead times, give them the right inventory, at the right time, to meet their customer demand, everybody wins.
The reality is, as <UNK> just described, as we move towards RFM, and then ultimately, long term, towards more of a pull system ---+ which Huntsville will be very key in helping us get to ---+ we didn't execute it perfectly.
And, as we set up our RFM stocking profile, there were just some units and some box counts that weren't right for some dealers, and we were too slow to adjust to that.
<UNK>, this is <UNK>.
I would say, absolutely not.
We know that, in critical, important segments of the ATV and the side-by-side marketplace, price and value is a really important constituent.
Again, as <UNK> says, I think competition makes us better.
We have been actively expanding and developing our value lines over the last few years.
One of our big winners during the recession was how hard we were able to play value.
And I think this is just one more reminder, as we continue to go forward, to make sure that ---+ ideally, you want to win with product versus promotion.
That's really been the Polaris strategy for years.
And I think as you go forward in the outlying product plans over the next couple of years, I think you'll see Polaris continue to be focused on this segment.
It is an opportunity for us.
And recognize ---+ and that's part of what drove the strategic acquisition of Hammerhead.
It's going to allow us to leverage that capability to play bigger in the lower end of the market.
Obviously it doesn't help in the third quarter but, over time, that's going to be a nice part of our ---+ part of the answer to how we compete better.
The Chinese market potential for off-road vehicles is a really long-term play.
What we've seen to date ---+ we've got great new leadership over there.
We're optimistic about it.
But what we sell mostly is the high-end RZRs, the high-end motorcycles.
And that is an opportunity for us to build a profitable and good-sized business there.
The opportunity to leverage Hammerhead for sales into China is probably somewhat limited.
We can use it, probably over time, to assemble some of our products and reduce the cost of selling what we have there.
But really the opportunity is for us to leverage their brand, and leverage really strong engineering and manufacturing capability to sell products, not only in the US through our distribution, but really, globally, into some of these markets where they just can't buy a $5,000 ATV, or a $5,000 side-by-side.
We're going to have the ability to hit a much lower price point with a very good-quality product.
Yes, all right.
Yes, the Brutus story is ---+ it's not as good as we want it to be is, I think, the bottom line.
We have this in our adjacent markets group under Matt.
They're making a number of adjustments, where we're selling in this into our work and transportation portfolio.
Retail is increasing, but we're seeing some distribution erosion, which I think is a little bit inconvenient in the short run.
But, long term, we need to have the right dealers that are capable and interested in retailing that.
And that's the transition Matt and team are working through that.
We're going out direct and selling it as part of our portfolio.
The Bobcat guys are doing fine.
Again, I think the reality on this one is, we probably over sold this one a little bit, about how big it was going to be and how quickly.
The product is fine, particularly at the high end with the PTO.
The high-end work end, we're doing quite well.
It's really the base models that we're more struggling with.
So, we're making some course corrections, and I think it's going to be smaller than you guys thought it was going to be and we thought it was going to be for a while.
But we still are pretty committed to Brutus being a key part of our work and transportation strategy going forward.
<UNK>, this is <UNK>.
I think it's an interesting phenomenon.
Frankly, we came with a number of ETX models, and, frankly, we were constrained on supply for most of the first several months since rollout.
Demand has been pretty good.
But I think competitors have responded aggressively in the value segment.
And frankly, our share, at least in ATVs, was down in value.
Because, again, people have just changed the price-value relationship really significantly between promo and discounting on that.
And then, again, it's been most of our competitors in that segment.
So, we chose not to go down completely and get that dirty and fight.
Because, again, we've got some great product with ETXs.
And I think that, again, those will normalize over time, and I expect that we'll continue to see share gains over the long term with that product.
But, in the short term right now, we are not seeing that.
Yes, but not quite as ---+ again, it's a little bit more strategic, based on what products have what product entry.
Whereas an ATV is ---+ almost everybody's in that segment, and it's a little bit of a free-for-all right now.
It's a little more strategic, I would say.
And our ETX has powered through that, I think, better on the RANGER side.
<UNK>, you're really good with your math on a quick basis.
Because we hadn't really looked at it that way.
We don't talk in a constant-currency basis.
We recognize that our customers and dealers and shareholders and everybody else has to deal with the currency swings.
So we don't really look at it that way.
But, the fact is, you're right.
And you'll see that all the way down the P&L.
We're battling through some pretty significant headwinds, some of which we had built into the budget, and some of which we did not.
And so we are challenged, but we're powering through and making adjustments in sales and in margins, and all throughout the operation, to offset these pressures.
