Harley Says Gaining Traction With Buyers Even As Retail Sales Fall

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harley davidson university india 827x510 81508130398

Harley-Davidson Inc reported weaker-than-expected quarterly retail sales as low prices for used motorcycles in the United States dampened demand for new ones. Harley-Davidson shares rose 4 per cent, rebounding from an early 3 percent drop, after executives on the company’s earnings call said it was making progress toward attracting new riders. Harley’s loyal, but aging, customers are selling their motorcycles and few millennials are taking up motorcycling. And Harley’s more efficient models rolled out over the past year are pressuring prices of older motorcycles.

Year-to-date sales of used Harley motorbikes have risen through August, but retail prices increased as well after falling for 12 straight quarters, narrowing the price gap with new bikes, Chief Financial Officer John Olin said.

The weaker dollar, which is expected to limit the ability of Harley’s international rivals to offer discounts could also help, Olin said. The company maintained its full-year shipment forecast of 241,000 to 246,000 motorcycles.

Harley shares rose 0.6 percent to $ 46.29 at mid-afternoon. They have lost a quarter of their value this year, compared with a 14.2 percent increase in the S&P 500 index. Analysts remained cautious.

Aegis Capital analyst Rommel Dionisio said he would look for signs of an industry-wide rebound in retail sales, or more market share gains by Harley, before getting more bullish on the stock.

Shipments slid 14.3 percent in the third quarter ended Sept. 24. Harley said it had cut production in the second half of 2017 to match demand.

Global retail sales, by dealers to customers, fell 6.9 percent, almost double the 3.2 percent expected by Consensus Metrix. U.S. retail sales fell 8.1 percent instead of the 5.6 percent drop expected.

Third-quarter operating margin slid 8 points to 2 percent, hurt partly by more sales of mid-priced cruiser motorcycles. Shipments of costlier touring motorcycles slumped 37 percent.

Harley said it expected to ship more higher-margin bikes in the current quarter.

The company has been investing to attract new buyers and Chief Executive Matthew Levatich said on Tuesday that initiatives such as courses to teach motorcycling were starting to pay off.

Profit plunged nearly 40 percent to 40 cents per share, beating the average analyst estimate by 1 cent. Revenue from motorcycles and related products fell to $ 962.1 million, beating analysts’ estimate of $ 953.3 million according to Thomson Reuters I/B/E/S.

(Reporting by Ankit Ajmera in Bengaluru and Sayantani Ghosh in New York; Additional reporting by Rachit Vats; Editing by Bernadette Baum and Richard Chang)

© Thomson Reuters 2017

(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)

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About Craig Ballantyne 22789 Articles
I love anything to do with Harley Davidson and have two beautiful children and a beautiful partner. In my spare time i like building websites and love anything to do with the internet.

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