You are given a text that consists of multiple sentences. Your task is to perform abstractive summarization on this text. Use your understanding of the content to express the main ideas and crucial details in a shorter, coherent, and natural sounding text. 
Text: Mike Speetzen, our chief executive officer; and Bob Mack, our chief financial officer; have remarks summarized in the quarter and our revised expectations for the full year, then we'll take questions.
You can refer to our 2020 10-K for additional details regarding these risks and uncertainties.
I continue to be incredibly impressed with the dedication, commitment and execution of the Polaris team as we navigated ongoing supply chain pressures, logistical challenges and increasing input costs to deliver impressive second-quarter results.
Focused execution is our mantra and it once again paid off as the team expertly navigated the challenges to enable us to exceed expectations.
The powersports industry has experienced significant demand, and that trend continued into the second quarter.
Demand, while down from unprecedented levels in the second quarter of last year was up over prepandemic levels of Q2 2019 by 14%.
Overview market share gains continued in the second quarter with gains in both ATVs and side-by-sides.
We did, however, lose a small amount of share in India, particularly in our midsized bikes given the supply chain challenges.
That said, demand remains strong for these models, and we anticipate our share gains will resume as our vehicle supply improves.
Boats also remained strong, growing retail sales and market share during the quarter and we have a healthy and significant backlog.
Although it's off season for snowmobiles with over half our snowmobile build this year being represented by our near-record high snow check preorders, the sales cadence of our snowmobile business will be even more heavily weighted toward our fourth quarter this year given the timing variation in our component deliveries.
Our PG&A and International businesses also performed quite well.
PG&A sales were up 35% during the quarter.
I'd also note that we are experiencing an increase in the attachment rate for PG&A as more consumers look to personalize their vehicles.
Our International business continues to see strength.
We grew sales 64% as the economies outside North America continued to improve in Q2.
Our earnings outperformed expectations, demonstrating the team's ability to overcome challenges with focused execution.
Not surprisingly, production and delivery were and continue to be impacted by global supply chain and logistics challenges.
As a result of this and continued strong consumer demand, our dealer inventories are at the lowest levels in decades.
I'll talk more about this in a moment.
Given our first half results, continued strong consumer demand and our team's hard-fought ability to execute, I am pleased to report that we are again raising our full-year earnings guidance.
Bob will give more details shortly.
On a two-year basis, our retail is up 14%, reflecting continued growth in powersports, driven by strong underlying consumer demand.
As expected, our second quarter North American retail sales were down 28% from the 57% increase reported in the second quarter of 2020.
The gating factor for retail sales today compared to a year ago is low dealer inventory driven by supply chain impacts on delivery.
Retail sales would have likely been significantly higher without these impacts.
Despite the supply impacts to ORV retail sales, market share again grew during the quarter.
Our ORV business gained over 1 percentage point of market share in both ATVs and side-by-sides.
Motorcycle retail sales also continued to grow, increasing 22% during the quarter.
However, Indian lost a modest amount of share during the quarter, driven by low availability of bikes, particularly our very popular scout and chief models.
Strong boat retail also continued and remained ahead of the industry.
Dealer inventory levels ended the quarter down 57% on a year-over-year basis and were also down sequentially.
Our presold order process continues to be an effective lever that our dealers are utilizing to ensure they don't lose a sale.
And I'll go into this in more detail in the next slide.
Looking at the remainder of the year, dealer inventories are expected to remain lean into Q4, which is when we are anticipating the supply chain issues will begin to slowly improve.
Given stronger-than-anticipated demand, coupled with continued supply constraints, our expectations for dealer inventory levels to return to RFM profile levels is now sometime in late 2022 or even into 2023.
As I discussed earlier, the unprecedented demand, coupled with the supply chain constraints, has created significant disruption in our shipping cadence.
With dealer inventory at record lows, the most effective, efficient way for our customers to secure the product they want, and for our dealers to maximize retail and profitability is through our presold order process.
The advantage to consumers is that orders placed in the presold system received priority in our production and shipping schedule.
In addition, dealers and consumers can receive PG&A priority is placed at the time of the vehicle order.
As a result, presold orders have increased significantly since the pandemic began.
Pre-pandemic presold orders accounted for roughly 3% of our retail.
Exiting Q2, ORV presold orders were approximately 80% of retail.
While there have been some reports that the presold order process can be misused, our audits have found that not to be the case.
We regularly audit the system looking for a name change from the presold order at the time of registration.
These audits have found less than 1% where the names changed at registration and where there were changes, the majority had valid reasons for the change.
I'd also point out that the presold order cancellations remain at low single-digit percent, which is similar to pre-pandemic levels.
Lastly, we have analyzed shipping patterns to our dealers by tiers, volumes and regions and were all within 1% of pre-pandemic levels.
The bottom line is that there's high confidence in the presold order process, which is why it continues to be a competitive advantage in this very tight inventory environment.
Our manufacturing plants are operating at peak supply chain constrained capacity.
Our manufacturing, supply chain and logistics teams continue to execute at a very high level, managing the ever-changing production schedules driven by component availability with a singular focus to meet the demand of our consumers and dealers with high-quality vehicles and components.
Despite our efforts, we couldn't meet all the demand during the quarter.
As I indicated earlier, our presold order levels have increased significantly, and it appears those customers are waiting for the high-performing high-quality vehicles we produce.
I'd like to be able to say today that we see the light at the end of the tunnel.
But given the ongoing heightened demand for our vehicles and supplier challenges, it appears we, along with the entire powersports industry will be in a period of tight vehicle supply for the remainder of the year.
Our teams are doing impressive work to keep the flow of products moving, including expediting components, adjusting build schedules, substituting materials were appropriate and buying select materials on the spot market.
Focused execution and teamwork will ensure we win the competitive battle.
As indicated in our last call, we are also adding capacity later this year and into 2022 that will bring on 30% more production capability between ORV boats and motorcycles.
This capacity is needed to meet demand, fill the dealer channel and allow for the addition of some very exciting new products coming next year.
One of the drivers behind the unprecedented demand has been new customers coming into powersports.
New customer growth in the first half of 2021, while down slightly from the robust rates in the first half of 2020 remains comfortably ahead on a comparable two-year pre-COVID basis with approximately 300,000 new customers coming into the Polaris family over the first half of 2021.
The mix of new to existing customers has remained high at over 70% of the total customers for ORV, motorcycles, snowmobiles and boats.
Our existing customers continue to grow at a healthy rate.
And lastly, it's exciting to see the diversity of our customers also grow, led by Hispanic and female riders joining the Polaris family.
Overall customer demand in total remains very strong.
We track repurchase rates for our customers, which are increasing on a year-over-year basis.
This provides us with the confidence that our customers intend to remain with the sport.
The Polaris team is battling each day for the components needed to meet the strong demand of our consumers.
And as our results this quarter indicate, we are winning many of those battles.
Second-quarter sales were up 40% on a GAAP and adjusted basis versus the prior year.
Shipments and sales improved considerably across all segments ORV, motorcycles, adjacent markets, aftermarket and boats.
Second-quarter earnings per share on a GAAP basis was $2.52.
Adjusted earnings per share was $2.70, which was up 108% for the quarter, exceeding our expectations.
This strong performance was driven by a combination of revenue growth, lower promotional costs, increased pricing and operating expense leverage during the quarter partially offset by higher input costs.
Adjusted gross margins were up approximately 310 basis points year over year, primarily due to lower promotional and floor plan financing costs driven by low dealer inventory and strong demand, which requires minimal promotional dollars to drive retail.
This was muted somewhat by higher input costs associated with supply chain constraints, including logistics, commodity and labor cost pressures.
Operating expenses were down considerably due to the goodwill and intangible asset impairments recognized in Q2 2020.
Adjusted operating expenses were up 33% in the quarter relative to Q2 2020, which was heavily impacted by short-term cost actions taken to offset COVID-19 shutdowns.
Q2 2021 operating expenses grew sequentially versus the prior quarter due to the timing of legal, sales and marketing and engineering expenses along with staffing additions.
Operating expenses are expected to be down slightly versus the Q2 run rate in the second half of 2021.
Foreign exchange also had a positive impact on our quarterly results, primarily driven by the Canadian dollar.
From a segment reporting perspective, all segments reported increased sales for the quarter driven by strong demand.
ORV/Snowmobile segment sales were up 38%.
Motorcycles were up 50%, Adjacent markets increased 98%, Aftermarket was up 15% and Boats increased 49% during the second quarter relative to Q2 2020, which was adversely impacted by COVID-19 closures.
Average selling prices for all segments were up, ORV increased about 13%, Motorcycles were up approximately 8%, Adjacent markets increased 10% and Boats were up 14% for the quarter.
All segments benefited from continued lower promotional costs given high demand and the lack of product in the channel.
Pricing actions taken in the quarter and model mix also had a favorable impact.
Our International sales increased 64% during the quarter, with all regions and segments growing sales as the heavily pandemic impacted countries began to open their economies again.
Currency added 15 percentage points to the International growth for the quarter.
And lastly, our parts, garments and accessories sales increased 35% during the quarter, driven by increased demand across all segments and categories of that business.
Moving on to our guidance for 2021.
Given the stronger-than-anticipated performance in the second quarter, we are increasing our full-year adjusted earnings per share guidance for 2021 and now expect earnings to be in the range of $9.35 to $9.60 per diluted share.
The increase is driven by the expectation that the even lower promotional environment we experienced in the second quarter will continue through the second half as demand is expected to remain high and dealer inventory levels low for the remainder of the year.
Additionally, we expect price increases and surcharges for the upcoming model year to provide incremental benefit in the fourth quarter.
These benefits are partially offset by the escalating input costs, particularly component cost increases driven by both the global supply chain shortage and higher commodity prices, along with the increased cost from manufacturing inefficiencies, increased expedites and higher logistics costs.
Overall, for the full year, we are pleased that our product pricing and promotional cost reductions are offsetting the expected annualized incremental cost headwinds on a dollar basis.
We are narrowing our total company sales growth guidance by holding the upper end of our sales guidance range at 21% and raising the lower end of the range to 19% given our sales growth performance to date.
Our dealers have ample presold orders in hand that combined with additional product would typically allow us to increase the top end of our sales guidance range.
However, given the uncertainty around component supply, we are leaving the upper end of our sales guidance unchanged at this time.
Moving down to P&L.
Adjusted gross profit margins are now expected to be down in the range of 40 to 70 basis points.
This is an improvement from our previously issued guidance and primarily due to the higher-than-expected margins in the second quarter which was driven largely by lower current quarter promotional costs and the timing of promotions accrual adjustments as dealer inventory continued to decline.
Adjusted operating expenses are now expected to improve 90 to 120 basis points as a percentage of sales versus last year given the higher sales growth expectations.
Income from financial services is now expected to be down in the mid-20s percent range driven by the historically low dealer inventory levels, as well as lower retail financing income due to lower penetration rates of our retail providers as more customers are buying with cash and/or have more time to shop their financing needs with other financing sources given the delays in delivery.
Guidance for the remainder of the P&L items remains materially unchanged from our previously issued guidance.
While our full-year earnings guidance improved as a result of our year-to-date performance, and the pricing actions being implemented at the upcoming model year changeover, our second half performance is expected to be down compared to the second half of 2020 and sequentially from our reported first half results.
Let me give some clarity on the second half cadence for earnings.
Our first half 2021 earnings per share finished at $4.99, a 228% increase over the first half of 2020.
Given our full-year revised guidance, the second half earnings per share equates to a range of $4.36 to $4.61 per diluted share, a decrease of 26 to 30% on a year-over-year basis and an 8 to 13% decline on a sequential basis from the first half of 2021.
This reduction in earnings per share on a sequential basis is driven by a number of positive and negative factors, including increases in input costs in the second half of the year, principally commodities, labor, expedite and rework costs related to supply chain shortages, as well as unprecedented ocean and truck transportation rates and the timing of operating expense spend.
These costs are expected to be partially offset by increased product pricing through both low promotions, higher base prices and surcharges.
On a two-year basis, our second half earnings per share results at the high end of the range are expected to be up over 30% compared to the second half of 2019.
I would also add that the quarterly cadence for earnings per share in the second half of 2021 is more heavily weighted toward the fourth quarter with approximately 60% of our second half earnings per share occurring in Q4.
This is driven by a couple of key factors: First, the majority of our high margins, no Check snowmobiles won't ship until Q4 as compared to a stronger Q3 shipping quarter in 2020.
Second, while we are increasing selling prices and adding surcharges to offset a portion of the cost increases.
These increases do not take effect until late Q3, thus having a larger impact in Q4.
Let me quickly cover our sales expectations by segment.
ORV snowmobile sales guidance remain unchanged at up high teens percent.
The only modification is the timing of shipments, as indicated earlier, with more snowmobiles being shipped in the fourth quarter of 2021 versus prior year, given the supply chain disruptions and the timing of our pricing actions hitting Q4 more heavily than Q3.
Motorcycle sales are anticipated to be up low 30%, down slightly from prior guidance.
While we continue to expect our motorcycle business to grow and take share for the year, supply chain challenges are impacting production enough to possibly shift to some shipments into 2022.
In the remaining segments, Global Adjacent Markets, Aftermarket and Boats, we are increasing our sales expectations given the sales growth realized through the first half of 2021.
Year-to-date second quarter operating cash flow finished at 196 million, down 37% compared to the same period last year, driven by an increase in factory inventory due to the supply chain inefficiencies.
Our expected full-year cash flow performance remains unchanged at down mid-30% compared to last year.
During the second quarter, we spent $111 million on share repurchases.
We will continue to prioritize organic investments in our business, along with share buybacks throughout the remainder of the year, subject to market conditions.
This quarter's results demonstrated the drive and determination of the Polaris team in the face of ongoing challenges.
We will continue to effectively manage a challenging environment to meet consumer demand.
The underlying earnings power of the company remains strong as does our financial health.
Demand for our products remains robust, and we do not see that changing in the medium to long term.
Our supply chain remains the top challenge for the company with component supply not expected to improve until sometime late 2021 or even early 2022.
And as a result, dealer inventories are not expected to return to normalized levels until sometime in late 2022 or even early 2023.
While much of the focus has been on the supply chain, innovation continues to be the lifeblood of Polaris, and we have a number of new products coming, including the all-new electric RANGER, along with exciting model year 2022 launches.
Let me close by reiterating that we're winning in a challenging environment, and we remain focused on navigating through the current supply chain challenges and rising input costs to deliver products our customers are demanding while at the same time, delivering improved results and value to our shareholders.

user
compname reports qtrly adjusted net income $2.70/shr.
polaris second quarter 2021 earnings results.
q2 earnings per share $2.52.
qtrly adjusted net income was $2.70 per share.
q2 adjusted sales increased 40% to $2,117 million.
polaris increased its full year 2021 earnings guidance and now expects earnings to be in range of $9.35 to $9.60 per diluted share.
full year 2021 adjusted sales guidance was narrowed and is now expected to be up 19% to 21% over prior year.
supply chain-related headwinds and higher input costs will continue into the second half of the year.

assistant