Arctic Cat 2018?
- Thread starter fudge313
- Start date
2-3 Years of stale inventory at many/most dealers, dealers dropping like flies, plus Atvs that barely sell, and junky side by sides that sell even less. Plus BRP and Polaris that are much more successful and have all the money to throw at sled, ATV and sxs development + marketing.
Straight up...not just trying to be a jerk....is that a company you would invest in? Not this guy.
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After they released their earnings yesterday it does not look great for team green. EPS down even further than projected, hoping to be "profitable in Q2 next year". I hope AC can weather the storm.
In my mind and I may be totally wrong but I think the biggest reason for partnering with Yamaha was to distribute some of the costs of designing, engineering and manufacturing. They are hurting and are trying to find ways to dilute some of the expenses occurred in designing and making new sleds. Cutting of dealers like Michell at oregon trail sports when she was there don't help them. I bet she was one of the top sellers of parts if not the top seller and they pulled the plug, nothing like cutting the hand off that feeds you. This was only one example and I'm sure there has been plenty more big mistakes like that. I know cat dealerships are dropping like flies in our area. Kind of hard to sell parts and sleds when you have no dealers, not to mention there marketing. Oh well, only the strong survive I guess.
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Have you checked Poo's lately? Massive recalls are killing them. Down 120 million from this time last year.
Also jamming too much inventory down dealers throats. You have to take X amount of sleds or you won't be a dealer anymore. Even when the dealer is small and cannot sell that many sleds per year based on the local population and demographics that surrounds them. So then the dealer has 10 sleds to start the next season they didn't sell and have to sell them for huge losses. Even with their profits being so low to begin with on current model year sleds. Then companies like Country Cat that are in Cat's back pocket sells holdover sleds in the spring/summer for literally nothing. Which tanks sales levels for every other dealer in the country, and the used sled market. Most dealers make their money off warranties and shop labor rates. Then there is Cat the next year saying the same crap again, and usually tries to jam even MORE inventory down their throats. And Cat doesn't care because they got their money from that dealership up front. Pretty stupid business ethics if you ask me.
^ That is a general problem in the sled industry that needs to/will have to come to a head in the next few years if manufacturers wish to keep quality dealers interested in carrying sleds. Cat is by far the worst offender, and exacerbated by the fact that their sleds don't sell well, and their wheeled product is basically expensive pavement protection. BUT Polaris is far from innocent in over loading sled inventory, and has progressively gone further down this road as well. Doo has started to play that game the past few years, but has so far done the best job. If you could just treat and order sleds like the wheeled stuff, there would be no issue....but there is always this huge push to load up on product, and 1 bad sales year screws your inventory...almost indefinetly.
You nailed it too.... All it takes is a couple dealers on the brink of going under, they drop their prices (often thousands below cost on non-current stuff) just to raise cash. Other dealers are forced to then follow suit, the used market gets hit (again and again), and you can quickly give up all the money you (would have) made for the whole sled season (yes you read that right).
It's ugly...if it were the auto biz, there would be so many class action suits from dealers it would make your head spin. But this industry seems to tolerate it, for reasons beyond me. But I think that's going to fall apart to some extent in the coming years.
You nailed it too.... All it takes is a couple dealers on the brink of going under, they drop their prices (often thousands below cost on non-current stuff) just to raise cash. Other dealers are forced to then follow suit, the used market gets hit (again and again), and you can quickly give up all the money you (would have) made for the whole sled season (yes you read that right).
It's ugly...if it were the auto biz, there would be so many class action suits from dealers it would make your head spin. But this industry seems to tolerate it, for reasons beyond me. But I think that's going to fall apart to some extent in the coming years.
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one thing about Polaris is that they are diversifying there holdings,you see their product everywhere dirt snow street etc. they bought klim a few years ago , and have many other company holdings to help stabilize their income Yamaha and bombardier. cat not so much , plus the treated some of their long time dealers very poorly. time will tell ,i hope they cane pull things out. completion makes for a healthier industry
hopefully they will come out with a sled that has a cast bulkhead( in stead of screwed together sheet metal) . do something with their plastic and keep working on clutching.
Totally agree, the cast bulkhead was my favorite thing on the Pro when Poo brought it out in 11. The biggest advancement in chassis technology in a long time. Now Doo has it and am sure Cat will in the next chassis. Such a better idea than bent aluminum. I really don't have a problem with the Cat panels, after living with the pro twisty things, anything is an improvement
Spent some time today in the garage with my new love and I really love the way it looks. Everyone is yelling for narrow boards but they seem the perfect width for my feet when I've got my boots on. Really don't want to go back to the days of standing on the rails all day like my Powder Special One other thing I love and can't believe every sled doesn't have this now is the pull start in the middle of the chassis! What a simple but long overlooked improvement.
Spent some time today in the garage with my new love and I really love the way it looks. Everyone is yelling for narrow boards but they seem the perfect width for my feet when I've got my boots on. Really don't want to go back to the days of standing on the rails all day like my Powder Special One other thing I love and can't believe every sled doesn't have this now is the pull start in the middle of the chassis! What a simple but long overlooked improvement.
cat does have some good ideas and i did enjoy riding them . and i'm sure the performance is good (it was when i rode them)but they do need to step up their game, that chassis with a cast bulkhead and all the triangular bracing it has would be rock solid .
P
polaris stock- $90/share
cat stock- $15/share
polaris is killing arctic cat in all segments. its sad, you hate to see a company with such history going down the shi*ter. but its self inflicted, as another person stated,biting the hand that feeds you(dealers) defies explanation. Cat is hanging on by a thread and it wont be long til yamaha steps in and buys em dirt cheap
Stock price isn't a way to compare two companies, it means jack squat really. Heck, Case IH is a 5x bigger company than Polaris and their stock price is $7.92. Have to look at revenue and net income. Arctic Cat is having a tough year, but their balance sheet actually looks pretty good, so wouldn't start to worry too much. They have invested a lot in facilities recently as compared to their total revenue, which is likely why they are showing a negative net income. Polaris is 7.5X bigger.
2015 Revenue (M):
Polaris: $4,719M
Arctic Cat: $633M
2015 Net Income (M):
Polaris: $455M
Arctic Cat: -$9M
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i see your point, however, how does a company like arctic cat survive with no dealers to sell their product?
Only way they will be able to do it is provide better customer experience or a more desirable product than their competition, which is hard when you don't have the dealers or engineering dollars to do it.
With what they have, they need to focus on people around the dealers they have. Make sure there are solid parts and service options in all the main riding areas out west and major trail areas in the NE and midwest. As long as you can take care of your customers, it really doesn't matter if you have 100 dealers or 10,000... It just means you won't have as many customers.
when gm and Chrysler went through bankruptcy they cut a lot of dealers i guess to raise competition and prices , i am concerned with cat cutting dealers then forcing the remaining dealers to take more inventory than they can sell in a year which puts downward pressure on prices , it seems like it defeats the purpose of cutting franchises . i hope they figure it out competition is good for us riders .
I don't think it's upset dealers poor product or bad customer service that does in cat. I think it is no secret that Polaris are wizards with marketing and ski-doo is the kleenex brand of the industry.
Cat has had nothing short of a piss poor advertising campaign since 2005. Following a race circuit and the success of one rider is not marketing. It's just chasing a far in a windstorm.
If cat wants to regain market share, they need to draw back premier backcountry riders, and get their "pros" the drive the name back to support the product the actually do provide. I have riden all 3 recent 2 strokes ( other than the gen4 doo) and cat does offer, IMO, the best offering in the mountain segment.
The axys may be lighter, but feels heavier. The doo motor may be more efficient and clean... but it feels flat and cat does have the best suspension.
Cat has had nothing short of a piss poor advertising campaign since 2005. Following a race circuit and the success of one rider is not marketing. It's just chasing a far in a windstorm.
If cat wants to regain market share, they need to draw back premier backcountry riders, and get their "pros" the drive the name back to support the product the actually do provide. I have riden all 3 recent 2 strokes ( other than the gen4 doo) and cat does offer, IMO, the best offering in the mountain segment.
The axys may be lighter, but feels heavier. The doo motor may be more efficient and clean... but it feels flat and cat does have the best suspension.
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