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Harley-Davidson sales slam on the brakes in the US but shares bounce

Emma Haslett
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Harley-Davidson took a cautiously optimistic approach (Source: Getty)

Harley-Davidson reported a fall in earnings today, after sales fell in the US - but sales in Canada, Europe and Asia Pacific were strong.

The figures

The iconic motorcycle brand said net income had fallen to $114.1m (£92.7m) in the third quarter, down from $140.3m last year, while consolidated revenue dropped to $1.27bn, from $1.32bn the year before. That pushed earnings per share to $0.64 in its third quarter, down 7.2 per cent from last year's $0.69.

Sales fell 4.5 per cent, which the company attributed to weakness in the US market, where sales fell 7.1 per cent year-on-year. Latin America was another weak point, with sales falling 7.6 per cent.

But things were looking better in other regions: sales rose 4.3 per cent in Canada, and 1.9 per cent in Europe, the Middle East and Africa.

Shares bounced more than five per cent to $52.31 in early trading in New York

Why it's interesting

Harley-Davidson may have fulfilled the dreams of many a middle-aged man - but it may be close to a mid-life crisis of its own.

The company said it is navigating a "fiercely competitive" environment, as well as weak industry in the US. That's reflected in its market share in the US, which was at 52.3 per cent for the 601cc-plus segment - essentially flat on last year.

The company said it expects to ship between 264,000 and 269,000 motorcycles this year, about the same as last year.

But shareholders seemed satisfied, which could have something to do with the $0.35 cash dividend it paid in the third quarter.

What Harley-Davidson said

Matt Levatich, president and chief executive of Harley-Davidson, said:

We are pleased with the positive results and the enthusiasm we've seen for our Model Year 2017 motorcycles, featuring the new Milwaukee-Eight engine. We are confident that the entire line-up will drive retail sales growth for the remainder of 2016 and position us well heading into the spring riding season next year.

Our value as a company and as a brand is the sum of 113 years of commitment to our riders and the freedom seekers we will inspire to ride in the future. We remain intensely focused on growing the sport and delivering strong business results.

In short

A cautious outlook for a company which characterises the American Dream - but investors were happy.

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