* Sales $782 mln vs est $752.7 mln

* Sees FY12 EPS $3.65-$3.80 vs est $3.77

* Sees 2012 margins to grow 100 basis points

* Shares recover from early fall, rise 3 pct

Jan 25 (Reuters) - Polaris Industries Inc's said it expects gross margins to grow in 2012, even as the all-terrain vehicle maker continues to struggle with high commodity costs and currency fluctuations.

Shares of the company, which fell as much as 6 percent in early morning trade after the company gave cautious 2012 outlook, bounced back and were up 3 percent at $64.43 in late morning trade on the New York Stock Exchange.

On a conference call with analysts, the company said it expects gross margins to grow by 100 basis points in 2012, helped by price hikes and cost reduction efforts.

Margins fell 160 basis points in the fourth quarter due to the lack of snowfall, and high commodity prices and currency fluctuations continued to hurt the company's profit.

Polaris said it expects 2012 earnings of $3.65-$3.80 per share, compared with analysts' expectations of $3.77 a share, according to Thomson Reuters I/B/E/S.

It forecast sales growth of 5 percent to 8 percent in 2012, implying revenue of $2.79 billion to $2.87 billion. Analysts were looking for $2.93 billion.

"We believe the significant commodity cost pressures we have experienced in the second half of 2011 will continue to pressure gross margins in the first half of 2012. But will moderate as we move through 2012," Chief Financial Officer Michael Malone said.

Harley Davidson, with which Polaris competes in the motorcycle market, also posted strong quarterly results on Tuesday, but remained cautious on 2012 given guarded consumer spending in the United States and Europe.

Polaris' off-road vehicles, which account for almost 60 percent of total sales, are used in sports such as fishing and hunting as well as in farms, ranches and construction sites. Sales at the segment rose 18 percent to $465.8 million.

Minneapolis-based company Polaris also competes with Honda Motor Co, Yamaha Motor Corp, Suzuki Motor Corp and Arctic Cat Inc.

For the fourth quarter, Polaris earned 90 cents a share, versus analysts' estimate of 88 cents a share.

• A Permanent Economic Emergency