Noah Zatzkin

Noah Zatzkin asked about the drivers behind Polaris's ORV retail strength and market share gains in Q3 2025, particularly in the utility segment, and sought early thoughts on the fiscal 2026 outlook, including the impact of the Indian Motorcycle transaction and tariffs.

Answer

CEO Mike Speetzen attributed ORV strength to right-sized inventory, the broad RANGER lineup (including the RANGER 500 attracting new customers and the unmatched XD 1500), significant quality improvements, increased short-term repurchase rates, and high-performing North Star Rewards Program dealers. For 2026, he highlighted the Indian Motorcycle deal's expected $50 million EBITDA and $1 EPS benefit, the expectation of build equaling ship equaling retail for uplift, a neutral promotional environment, and an anticipated increase in tariff costs to over $200 million, with aggressive plans to reduce China sourcing. CFO Bob Mack added details on the tariff impact.

Noah Zatzkin inquired about the drivers behind Polaris's strong ORV retail performance and significant market share gains, particularly in the utility segment, and sought insights into the future industry retail landscape and Polaris's ongoing share gain opportunities. He also asked for preliminary thoughts on fiscal year 2026, including industry trends, Polaris-specific impacts like the Indian Motorcycle transaction's EPS benefit, and the outlook for tariff mitigation.

Answer

CEO Mike Speetzen attributed ORV share gains to right-sized inventory, the broad Ranger lineup (including the new Ranger 500 attracting new customers and the unmatched XD 1500), improved quality, increased short-term repurchase rates, and a high-performing dealer network. Regarding 2026, Speetzen highlighted the significant impact of the Indian Motorcycle deal (adding $50M EBITDA, $1 EPS despite $450M revenue reduction) and the expectation for build-to-ship-to-retail alignment, which could provide hundreds of millions in uplift. CFO Bob Mack added that tariffs are expected to increase to over $200 million in 2026, up from $90 million in 2025, but mitigation efforts are aggressively reducing China sourcing.

Noah Zatzkin inquired about the annualized run-rate impact of tariffs for the upcoming year and how Polaris plans to offset these cost pressures to maintain its competitive edge.

Answer

CEO Michael Speetzen estimated the annualized tariff impact at approximately $230 million after mitigation efforts, which are ongoing. CFO Robert Mack advised that the Q3 run-rate of $30-40 million is a reasonable proxy. Speetzen emphasized that Polaris will focus on product innovation and operational flexibility rather than significant price hikes or tariff surcharges to stay competitive.

Noah Zatzkin asked about Polaris's shipment plans relative to retail, year-end inventory targets, and for more detail on its "recession playbook" and the ability to pivot back to normal operations.

Answer

CFO Bob Mack stated the plan is to ship below retail to further reduce dealer inventory, with targets for ORV down mid-to-high single digits. CEO Mike Speetzen reiterated that if retail softens, shipments will be adjusted to protect dealers. Mack explained the recession playbook prioritizes cash and liquidity via working capital and CapEx management, disciplined hiring, and winding down unprofitable lines like FTR and Timbersled. He stressed that innovation spending on core products remains protected and the actions are reversible quickly if conditions improve.

Noah Zatzkin inquired about the $280 million in operational savings, asking what drove the increase from the initial $150 million target and how much of it is recurring. He also asked for an assessment of competitor inventory levels and the overall progress of industry-wide destocking.

Answer

CFO Robert Mack detailed that the increased savings came from plant efficiencies, materials, and logistics. He stated that approximately 70-75% of the savings are permanent, while 25% is tied to production volume. CEO Mike Speetzen added that Polaris has extensive data showing its inventory is significantly more current and has a lower DSO than key competitors, who are dealing with aged inventory (e.g., model year '22) and resorting to aggressive, unsustainable promotions.

Noah Zatzkin asked for an update on the tariff front, specifically regarding the increased expectation to $75 million for the year, the progress of mitigation efforts, and early thoughts on the expected impact embedded in the 2026 outlook.

Answer

CFO Ryan Gwillim clarified that the increase to $75 million was primarily due to expanded Section 232 impacts on aluminum and steel, including a rate increase from 25% to 50%, expanded applicable ACS codes, and retroactive application. He noted that mitigation efforts continue to outpace expectations, providing good visibility into next year, where the incremental impact over this year would be much smaller. He expressed satisfaction that Brunswick expects to cover the additional $10 million tariff impact within the year's EPS guidance.

Noah Zatzkin of KeyBanc Capital Markets inquired about the structural impact on the Boat Group's margins and volume potential following the announced 25% rationalization of the value fiberglass model lineup for 2026. He also asked for the specific tariff impact in the quarter and its distribution across business segments.

Answer

CEO David Foulkes explained that the model rationalization aims to reduce complexity in a lower volume market, while still considering the total margin stack including engines and electronics on those boats. CFO Ryan Gwillim stated the P&L tariff impact for the quarter was in the mid-teens millions, with approximately 75-80% affecting the Propulsion segment. He also noted the potential competitive advantage from new tariffs on Japanese engine imports.

Noah Zatzkin asked about the growth drivers for the Navico Group and the nature of the large restructuring charge taken in the fourth quarter.

Answer

CEO David Foulkes stated that Navico's growth and margin expansion in 2025 will be driven by a cadence of new product launches. CFO Ryan Gwillim clarified the Q4 charge was a non-cash goodwill impairment triggered by a higher discount rate used in valuation testing, not a change in the fundamental outlook for the business.

Noah Zatzkin from KeyBanc Capital Markets asked about the health of Malibu's dealer base and the broader industry, as well as industry-wide inventory levels. He also requested more detail on the tariff cost offsets and mitigation efforts embedded in the company's guidance.

Answer

CEO Steve Menneto described Malibu's dealer network as healthy, though inventory is about one to two weeks heavier than desired. He believes the overall industry's inventory situation has improved. CFO Bruce Beckman added that Malibu's non-current inventory is in a good position. Regarding tariffs, Beckman explained that mitigation efforts began last year with approximately $10 million in advanced raw material purchases and that the current guidance factors in supply chain efficiencies and necessary price increases.

Noah Zatzkin asked about the current sentiment and overall health of the dealer base, and also inquired about any potential impacts from tariffs.

Answer

CEO Steven Menneto characterized dealer sentiment as "cautiously optimistic," stating they appreciate the company's disciplined production approach which helps them manage inventory. Regarding tariffs, he mentioned that a preliminary analysis suggests they will not have a material impact on the current fiscal year, but it could be a topic for fiscal 2026.

Noah Zatzkin asked about the company's M&A strategy regarding pontoons and inquired about its retail unit expectations and interest rate assumptions for the fiscal year.

Answer

CEO Steven Menneto confirmed that their M&A approach is unchanged and pontoons remain a potential value-creating option. CFO Bruce Beckman stated they expect their retail markets to be down mid-single-digits and clarified that their forecast does not build in speculation on future interest rate cuts.

Noah Zatzkin of KeyBanc Capital Markets questioned how Malibu Boats is addressing affordability concerns with its model year 2025 product lineup and asked for the expected average price increase.

Answer

CFO Bruce Beckman explained that the company strives for efficiency to keep pricing competitive, noting their boats are often priced $20,000-$30,000 below competitors in certain segments. For 2025, they have minimized pricing actions, with some product lines holding flat or seeing slight decreases. CEO Steve Menneto added that the aggregate price increase is in the low single-digits, which is lower than typical.

Noah Zatzkin of KeyBanc Capital Markets asked for an assessment of the overall health of the marine industry's dealer base and inventory levels, as well as the company's current stance on mergers and acquisitions (M&A).

Answer

CFO Scott Kent stated that MasterCraft's dealer channel is healthier due to significant inventory reduction, though dealers remain cautious. CEO Brad Nelson added that they see low risk of widespread dealer failures and noted that industry-wide, the pontoon market's inventory health lags the ski/wake category. Regarding M&A, Nelson affirmed the company's approach remains 'careful, selective, and opportunistic,' supported by a strong balance sheet while prioritizing organic growth.

Noah Zatzkin of KeyBanc Capital Markets questioned the industry retail assumptions embedded in the company's updated guidance and asked for any observations on changes in consumer sentiment or potential 'green shoots' from the early boat show season.

Answer

Executive Timothy Oxley reiterated that the company's guidance assumes a full-year retail decline of 5% to 10%, which aligns with year-to-date trends. He pointed to the surprisingly strong demand for the premium XStar boat, even in Europe, as a positive signal. CEO Bradley Nelson added that there is 'cautious optimism' among dealers, citing a 'halo effect' from the new XStar that drove strong performance at the Salt Lake City, Dusseldorf, and Minneapolis shows. He also noted favorable feedback on the new BALISE pontoon line.

Noah Zatzkin from KeyBanc Capital Markets asked for a higher-level update on the health of the broader dealer base and how dealers are feeling about their inventory levels from an industry perspective.

Answer

Executive Timothy Oxley stated that dealer health and optimism are improving as they successfully move through noncurrent inventory, which carries a higher cost burden. He believes their dealers are incrementally healthier than they were at the end of June. CEO Bradley Nelson added that the company has improved its full-year retail outlook to down mid-to-high single digits, an improvement from the prior forecast of down 5% to 15%, based on the promising retail results in Q1.

Noah Zatzkin asked about the cost reduction and labor efficiency efforts that helped stabilize Topgolf's margins and the remaining opportunities. He also requested an update on the TravisMathew business performance.

Answer

Topgolf CEO Artie Starrs credited methodical improvements, a new labor model, and the ongoing Toast POS system rollout for stabilizing margins while maintaining the player experience. President & CEO Chip Brewer addressed TravisMathew, stating the brand remains strong but its revenue trajectory has been impacted by a soft athleisure market, which is down mid-to-high single digits, though the women's category continues to grow.

Noah Zatzkin asked about the specific drivers behind the strong margin improvement in the Golf Equipment segment and the outlook for those margins. He also inquired about consumer behavior and the promotional environment in April.

Answer

President and CEO Chip Brewer attributed the 200 basis point gross margin improvement in Golf Equipment to operational initiatives related to yields, freight, and efficiency. He cautioned that the impact of tariffs will become more apparent in subsequent quarters. Brewer also confirmed the golf consumer remained solid in April, with a normal or slightly better promotional landscape.

Noah Zatzkin questioned how positive UTV retail reports reconcile with Patrick's unchanged wholesale outlook for powersports and asked for a breakdown of the powersports business mix.

Answer

CEO Andy Nemeth acknowledged UTV retail resilience but stated the company's production outlook remains unchanged, with a significant ramp not expected until the 2027 model year. He provided a rough 60/40 split for UTV vs. Rec and highlighted the golf cart and audio categories as having significant growth potential.

Noah Zatzkin of KeyBanc Capital Markets asked about the specific cost-saving levers the company is currently utilizing and what additional measures could be implemented if the economic environment deteriorates further. He also requested an update on the progress of the RecPro aftermarket business.

Answer

CEO Andy L. Nemeth detailed that the company is flexing its highly variable cost structure, making thoughtful fixed-cost reductions, and has a playbook for further scaling while preserving capacity for a potential rebound. President, RV, Jeff Rodino reported that RecPro is progressing as expected, entering its seasonally strong period, and successfully integrating more Patrick products from the RV and Marine divisions onto its e-commerce platform.

Noah Zatzkin asked about the drivers behind the forecasted 70-90 basis point operating margin improvement and requested an update on the RecPro acquisition.

Answer

CEO Andy L. Nemeth clarified that the margin improvement is expected to be primarily volume-driven, as the company can leverage its existing overhead structure. President, RV, Jeffrey Rodino expressed excitement about RecPro, noting they have already added over 60 Patrick product categories to the platform and are beginning to integrate marine products.

Noah Zatzkin asked whether the RV industry's mix shift toward lower-end units has stabilized and inquired about the speed-to-market for realizing synergies from the RecPro acquisition.

Answer

CEO Andy L. Nemeth indicated the mix shift to smaller units will likely continue until consumer confidence improves, which would trigger an upgrade cycle. He noted Patrick's content per unit has been resilient due to market share gains. Both Nemeth and President, RV Jeffrey Rodino confirmed that RecPro integration is happening immediately, with a tangible impact expected in 2025.

Noah Zatzkin of KeyBanc Capital Markets sought clarification on the previously mentioned $20 million FX tailwind. He also asked about the long-term tariff mitigation strategy, including whether a full exit from China is feasible and if there are any guideposts for mitigation efforts beyond 2025.

Answer

CFO Sean Sullivan clarified the FX impact would be a net $8 million tailwind for the full year versus the prior year. President and CEO David Maher explained the mitigation strategy is not a complete exit from China but rather a strategic rerouting of its supply chain to minimize U.S. tariff exposure. Sean Sullivan added that if the current tariff environment persists, the company expects to be able to mitigate 100% of the impact in 2026.

Noah Zatzkin inquired about the competitive environment for 2025, including industry product launch cadence and promotional activity. He also requested an update on the Korean market and the state of play on the ground.

Answer

CEO David Maher characterized the market as typically competitive, noting that promotional activity was in check in January. He explained that Acushnet's focus on the dedicated golfer can insulate it from broader market pressures. Regarding Korea, he stated the market is resilient but consumer duress and a correction in the premium apparel space have been sources of caution. He is more bullish on equipment than wearables in that region for 2025.

Noah Zatzkin asked about LiveWire's annual cost savings targets and whether the long-term strategic view of the business has changed given market headwinds.

Answer

CEO Jochen Zeitz reiterated LiveWire's reduced operating loss and cash burn targets, attributing the strategic re-evaluation to slower-than-expected EV adoption due to a lack of incentives, a less favorable regulatory environment, and slow charging infrastructure expansion. LiveWire CEO Karim Donnez added that the company is focused on reducing cash burn to achieve a sustainable model with existing funds and is exploring new addressable markets where EV technology can better shine.

Noah Zatzkin of KeyBanc Capital Markets inquired about LiveWire's annual cost savings targets and whether the long-term strategic outlook for the EV business has changed due to market headwinds.

Answer

CFO Jonathan Root (speaking for HOG) reiterated LiveWire's reduced operating loss and cash burn guidance, highlighting significant cost reductions. He stated that EV adoption is much slower than anticipated due to a lack of incentives and slow charging infrastructure expansion. LiveWire CEO Karim Donnez added that the company is focused on reducing BOM costs and operating losses to create a sustainable model with existing funds, while also exploring new addressable markets.

Asked if the 40% cash burn reduction at LiveWire would directly translate to lower operating losses, and inquired about the health of the HDFS loan book and its 2025 outlook.

Answer

For LiveWire, a significant reduction in operating loss is expected in 2025, driven by cost actions, though cash burn and operating loss are not a direct 1-to-1 translation. For HDFS, the consumer is stressed but the book is being managed well, leading to a raised 2024 outlook. However, 2025 is expected to be more challenging and likely not as strong as 2024.

Noah Zatzkin of KeyBanc Capital Markets asked for an update on LiveWire's annual cost savings targets and whether the long-term strategic view of the EV business has changed.

Answer

CEO Jochen Zeitz highlighted that LiveWire's projected operating loss and cash burn for the year have been significantly reduced. He stated the strategic view has evolved due to slower-than-expected EV adoption, driven by a lack of incentives, a less favorable regulatory environment, and slow charging infrastructure expansion. LiveWire CEO Karim Donnez added that the focus is on reducing cash burn to create a sustainable model with existing funds and exploring specific market segments where EV can shine.

Noah Zatzkin of KeyBanc inquired about the Harley-Davidson Financial Services (HDFS) segment, asking about the overall health of the loan book and the key drivers for the guided decline in operating income, especially given falling interest rates.

Answer

CFO Jonathan Root described the HDFS book as healthy, with recent originations being of very high credit quality. He explained the guided income decline is driven by lower wholesale asset levels due to dealer inventory reduction, lower retail asset levels from a slower sales environment, and the impact of replacing older, lower-rate debt with new, higher-rate funding. He noted that while dealers benefit from lower variable wholesale financing rates, this pressures HDFS income.

Noah Zatzkin of KeyBanc asked about the Harley-Davidson Financial Services (HDFS) segment, inquiring about the overall health of the loan book and the key drivers behind the guided decline in operating income, questioning if it included conservatism on credit losses.

Answer

Chief Financial Officer Jonathan Root explained that the HDFS book's health is solid, with stabilized used vehicle values and high-quality recent originations. The guided income decline is primarily driven by lower asset levels, stemming from reduced dealer wholesale financing and the paydown of retail loans from prior peak sales years. He also noted that while dealers benefit from lower variable rates on wholesale financing, this pressures HDFS income, along with the impact of refinancing maturing debt at higher rates.

Noah Zatzkin from KeyBanc asked about the health of the HDFS loan portfolio and the key drivers behind the guided 10-15% decline in operating income for 2025, including any embedded conservatism in credit loss expectations.

Answer

CFO Jonathan Root explained that the HDFS book's health is strong, with recent originations being of very high credit quality. The guided income decline is driven by lower wholesale financing assets due to reduced dealer inventory, lower retail assets from a slower sales environment, and the impact of refinancing debt at higher rates. He noted that while consumer stress exists, used bike values have begun to stabilize, and the company has slightly increased its loss reserves to be well-positioned.

Noah Zatzkin of KeyBanc Capital Markets Inc. asked if LiveWire's 40% cash burn reduction translates directly to operating loss improvement. He also inquired about the health of the HDFS loan book and the impact of future rate cuts.

Answer

CFO Jonathan Root clarified that while cash burn reduction impacts operating loss, there are differences due to depreciation and compensation. LiveWire CEO Karim Donnez confirmed a significant reduction in operating loss is expected for 2025, driven by lab relocations and a 30% workforce reduction. On HDFS, Root noted the consumer is stressed but the book is well-managed, leading to an increased outlook. He anticipates a more challenging 2025 for HDFS as debt costs may reset before retail loan yields.

Noah Zatzkin of KeyBanc asked if LiveWire's 40% cash burn reduction would directly translate to lower operating losses and inquired about the health of the HDFS loan book and the outlook for 2025.

Answer

CFO Jonathan Root clarified that the cash burn reduction does not translate 1:1 to operating loss due to non-cash items like depreciation. LiveWire CEO Karim Donnez confirmed a significant operating loss reduction is expected, driven by cost-saving measures. Regarding HDFS, Root noted the consumer is stressed but well-managed, leading to an upgraded 2024 outlook, but cautioned that 2025 could be more challenging.

Noah Zatzkin of KeyBanc Capital Markets Inc. asked if LiveWire's 40% cash burn reduction would directly translate to lower operating loss and inquired about the health of the HDFS loan book and the impact of future rate cuts.

Answer

CFO Jonathan Root and LiveWire CEO Karim Donnez confirmed a significant operating loss reduction for LiveWire in 2025, driven by major cost actions, though it's not a direct 1-for-1 with cash burn due to non-cash items. For HDFS, Root noted the loan book is well-managed, but 2025 performance may be challenged as funding costs could rise before retail loan yields adjust.

Noah Zatzkin sought clarification on the downward revision to the Marine segment's revenue guidance, asking if it reflects a change in the end-market view. He also asked for an explanation of the large gap between the Auto OEM segment's 31% Q1 growth and its unchanged 7% full-year growth forecast.

Answer

CEO Cliff Pemble explained the Marine outlook reflects a conservative view based on customer feedback and the possibility that tariff uncertainty could cause a temporary pause in high-end purchases. For Auto OEM, he stated that the high Q1 growth was due to the annualization of new BMW models launched last year. This growth will moderate as the company anniversaries those launches. The outlook also incorporates automakers' own softening production forecasts due to tariffs.

Noah Zatzkin of KeyBanc Capital Markets focused on the Marine segment, highlighting its 6% organic growth in a challenging market. He asked for the business mix between OEM and aftermarket and questioned if the 4% growth guidance for 2025 could be conservative if the industry stabilizes.

Answer

CEO Clifton Pemble confirmed the Marine business is 'more than half' retail aftermarket and that Garmin continues to gain share. He characterized the market as having 'stabilized' but doesn't anticipate a rapid snapback to double-digit growth without a new catalyst. He stated the guidance is based on this stable outlook, and Garmin would expect to outperform if the broader market performs better.

Noah Zatzkin of KeyBanc Capital Markets asked for quantification on the size of the recently acquired Lumishore business. He also requested management's outlook for the broader marine industry and their confidence in continuing to gain market share.

Answer

President and CEO Clifton Pemble described the Lumishore acquisition as an important, incremental business that enhances integration with Garmin's chartplotter systems. He suggested the marine market is likely stable, with potential improvement tied to a better interest rate environment. While noting that gaining more share becomes increasingly difficult, he affirmed Garmin's focus remains on creating great products to serve the market.

Noah Zatzkin asked if the recent market consolidations are accretive to the bottom line and inquired about the company's M&A strategy for the remainder of the year.

Answer

CFO Thomas Kirn confirmed that store consolidations are accretive, as they reduce the overall cost structure while retaining gross profit in the market. Chairman and CEO Marcus Lemonis added that while M&A remains opportunistic, the primary focus is on deleveraging and improving returns from recent acquisitions, such as the now-profitable Lazydays locations.

Noah Zatzkin inquired about the full-year 2025 gross margin outlook for new and used vehicles and the company's perspective on net dealership additions for the year.

Answer

Executive Thomas Kirn stated that for 2025, they are targeting a new vehicle gross margin of 13.5% to 14%. Executive Matt Wagner added that for used vehicles, they expect to average north of 19% for the full year, with sequential improvement expected after Q1. Regarding dealership additions, Wagner noted they expect to add a minimum of 6 to 7 locations but are being "exponentially more rigorous" with capital allocation, prioritizing improved performance from existing stores.

Noah Zatzkin asked how Camping World's new inventory positioning has changed year-over-year and what factors give management confidence in driving modest growth and margin improvement in the new vehicle segment.

Answer

Executive Matt Wagner stated that while the model year mix is similar to last year, they have greater confidence in pricing stability from manufacturers, reducing the deflationary risk on prior model year units. CEO Marcus Lemonis added that a more analytical, finance-driven approach to inventory has revealed specific segment opportunities, bolstering their confidence in the 2025 growth plan.

Representing Noah Zatzkin of KeyBanc Capital Markets, an analyst asked about any positive market indicators or 'green shoots' beyond inventory cleanup and requested an update on the pre-owned boat market.

Answer

CEO Philip Singleton emphasized that the primary 'green shoot' remains the industry-wide inventory cleanup, which he believes will lead to higher new boat margins, increased inventory turns, and eventual production increases from manufacturers, benefiting OneWater's parts business. Regarding the pre-owned market, Singleton described it as a 'broken record,' stating that supply remains extremely limited with no signs of that changing soon.

Noah Zatzkin asked for an update on the state of the pre-owned boat market and the company's outlook for that segment in fiscal 2025.

Answer

CEO Austin Singleton stated that the pre-owned market dynamic remains unchanged, characterized by a persistent lack of supply. He emphasized that demand is strong and the company could sell three times as many used boats as it currently has available. This segment continues to be an important focus for the business due to the high demand and limited inventory.

Noah Zatzkin asked for the outlook on Average Selling Prices (ASPs) by segment for the rest of the year and for commentary on Marine industry dynamics and potential "green shoots."

Answer

CFO Bryan Hughes expects ASP pressure to continue in Towables through Q2 due to a mix shift to affordable models but sees less pressure in Marine or Motorhomes. CEO Michael Happe stated the Marine market remains challenging, with no significant signs of change yet, and that the upcoming boat show season will provide a clearer picture for 2025.

Noah Zatzkin asked for an update on the health and sentiment of Winnebago's dealer base across both the RV and Marine segments.

Answer

SVP and CFO Bryan Hughes reported no significant changes in dealer health. He noted that the primary focus for dealers is currently on cash flow management due to the high interest rate environment's impact on floor plan financing, but stated there was no notable change in the overall state of the dealer network from the prior quarter.