Polaris Stock Soars. It Wasn’t Just Earnings.

Polaris makes power sports equipment. Above, a Polaris ranger 900. (Dreamstime)

Shares of Polaris soared after the power sports equipment maker reported better-than-expected quarterly numbers on Tuesday.

They were a relief: The impact of tariffs was far better than feared. The company also had a new lower-priced product for consumers.

Polaris reported second-quarter adjusted earnings of 40 cents a share from sales of $1.8 billion. Wall Street was looking for break-even results and sales of $1.7 billion, according to FactSet.

The surprise helped push the stock up 16.8% to $57.81 on Tuesday. The S&P 500 and Dow Jones Industrial Average fell 0.3% and 0.5%, respectively. Coming into Tuesday, shares were down about 40% over the past 12 months.

Sales are expected to fall this year with higher interest rates and pressures on American shoppers.

“Amid a global macroeconomic environment that remains dynamic, the Polaris team has maintained an unwavering focus on advancing our strategy and delivering for customers and dealers,” said CEO Mike Speetzen in a statement. “Polaris’ second quarter performance is the result of our disciplined execution.”

Free cash flow in the quarter landed at $344 million. Wall Street was looking for closer to $50 million.

Polaris expects tariff headwinds of $120 million to $130 million this year, compared with the $260 million to $300 million it forecast in April. The company expects to decrease its spending in China by about 35% year over year.

Along with tariff and earnings news, a new product might have investors thinking about a sales turnaround. Polaris is launching the Ranger 500, a lower-cost, so-called side-by-side utility vehicle. Side-by-sides are used by farmers, hunters, and people looking to have some fun.

“We believe this is the right product at the right price to address a customer base that makes up approximately 50% of all utility vehicle purchases,” said Speetzen on the company’s earnings conference call. “Starting at $9,099, the Ranger 500 is built for customers who are looking for a vehicle that has the features needed to get more done around their yard or property, while being easy-to-use and easy to own.”

It’s a market-expanding product for Polaris. Other Ranger models typically retail for more. A Ranger XD 1500 model can cost $40,000.

New products can help sales, particularly as business conditions appear to be normalizing. Third-quarter sales are expected to be $1.6 billion to $1.8 billion. Wall Street projects $1.7 billion. Sales in the third quarter of 2024 amounted to $1.72 billion.

Write to Al Root at allen.root@dowjones.com