Harley-Davidson saw worldwide sales drop in the first half of the year, with a bigger drop in US sales, which pushed profit down 16 percent
Shares of iconic US motorcycle company Harley-Davidson stumbled Tuesday following weak earnings that underscored its troubles finding new customers.
Shares were down 8.5 percent at $ 47.60 midday after earlier slumping nearly 12 percent following release of the results.
“These are challenging times for motorcycle sales and Amazon.com doesn’t have anything to do with that,” quipped Briefing.com, referring to the disruptive online retailer.
“It’s a demand issue and demand for Harley-Davidson motorcycles has been weaker than expected.”
A 114-year-old brand based in the Midwestern state of Wisconsin, Harley-Davidson has had a difficult time navigating shifting consumer tastes as its clientele ages in its home market.
The company also has struggled to drum up demand in overseas markets amid tough competition from “cruiser” bikes made in Japan and Europe.
Net profit through the first half of 2017 fell 16 percent to $ 445.2 million and revenues dropped 9.4 percent to $ 3.4 billion, the company said.
Worldwide motorcycle sales fell 5.7 percent during that period, with a 7.9 percent decline in the United States, its biggest market.
“While we expected the US industry to be challenged, we were disappointed by the unexpected magnitude of the industry softening in the quarter,” said chief executive Matthew Levatich.
“Our international performance in the second quarter was down, but in line with our expectations and we continue to expect international growth in the second half of the year behind expanded distribution and availability of new high-impact motorcycles.”
The company has been hailed for its American manufacturing presence by President Donald Trump, who invited Harley executives to the White House in February.
Yet in May it announced the opening of a new factory in Thailand, its third overseas plant after India and Brazil. Part of the objective behind manufacturing in Asia is to avoid tariffs in key Asian markets, Levatich said.
Harley-Davidson opened 13 new dealerships overseas in the second quarter, including in China, Thailand, South Korea, Switzerland, Italy, the United Arab Emirates and Russia.
“We know that our biggest opportunity for growth is outside the US,” Levatich said.
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