Posted on 07/21/2017 8:13:13 AM PDT by Lorianne
Shares of Harley-Davidson (HOG) dropped 10% in the morning after the company reported second-quarter earnings and were down nearly 6% at the end of the day. Almost everything was bad.
Retail sales by its dealers in the US fell 9.3% in Q2, compared to a year ago, to 49,668 motorcycles. They were “down more than we anticipated,” the company said. And with “soft sales across most markets,” sales by its dealers globally fell 6.7%.
“Industry new motorcycle sales deterioration continued,” the company said in its presentation, lamenting “weak industry sales on soft used bike prices.”
In addition to the industry woes, its market share in Q2 in the US dropped 1 percentage point to 48.5%. Shipments in the quarter fell 7.2% to 81,807 and are down 10.8% year to date.
The 30-day delinquency rate on its $7.5 billion in motorcycle loans outstanding rose to 3.25%, from 3.16% a year ago, and from 2.7% in Q2 2015. The annualized loss experience on those loans reached 1.71%, the highest for any second quarter since 2010.
Total revenues fell 5.6% to $1.58 billion. Net income fell 7.7% to $258.9 million. And despite blowing $163.2 million on share buybacks in the quarter to lower the share count and thus prop up earnings per share, earnings per share fell 4.5% to $1.48.
Its dealer inventory is bloated, so it offered incentives on its 2016 bikes to clear them out, and that didn’t help its 2017 models, but it said bravely that it is “targeting significantly lower year-end US dealer inventory.”
(Excerpt) Read more at wolfstreet.com ...
That sounds like expendable income has dropped in the US. I’m not sure what Thailand is going to do about that. Nobody in Asia can afford those bikes, and nobody in the US is going to buy a Harley made in Thailand.
Congress needs to get off it’s tail and enact Trump’s tariffs.
Whether this would help Harley or not, it would at least help ensure that Americans are employed building motorcycles that Americans ride.
Pat Buchanan convinced Reagan to put import barriers on Kawasaki 30 years ago-reciprocity. Now what? Cut their pay in half?
Congress should pass tax reform, not tariffs at this point.
Or Mexico. Or Canada.
Moving their manufacturing out of the USA would be instant suicide. We already have more than enough rice rockets.
They should do both. No amount of tax reform is going to stop off-shoring. Tariffs are necessary and worked well for this country for 180 years.
Harley sells too many models, and are quite overpriced. Not to mention that the market is saturated with low mileage used bikes. They should have to adapt to the market or perish, like any other business.
Harley-Davidson = rice burner???
Say it ain’t so!
I’d say some of the problem, maybe most of it, for Harley-Davidson is the success of Polaris with Indian. The rest of the industry may be in a slump, but Indian isn’t, they’re gorgeous, they’re stepping on Harley’s stock in trade while being more reliable.
Baby boomers entering old age, and H-D bikes don’t have the same appeal to millennials.
Egad I hate those things. Almost as much as the idiot kids who drive them.
“...the market is saturated with low mileage used [Harley-Davidson] bikes...”
Verrry interesting! Why should that be so?
I think HOG water downed their brand in many ways. Throw in a shift in demographics and other complications. Starting to get that Tata motors feeling in the future....Probably a Chinese company this time.
Aren’t motorcycle sales generally half of what they were a decade ago?
Worsening and more dangerous roads, older population and declining standard of living.
High union wages driving prices up and manufacturers going offshore to regain those lost profits.
HD - proud sponsor of Sturgis... the Yuppie infested circus.
{shrug} I heard Hell’s Angels ride rice-rockets these days.
How did that happen — And, how much laundry can a single batch of Brew do?
Tariffs should be a last resort, we should try to incentivise businesses to keep their manufacturing here because of a value proposition not because a threat.
But with that said, all economic tools should be left on the table.
Harley hasn’t developed new engines to offer other consumers that are not V-twin.
There is a certain percentage who don’t like the V-twin. Don’t like the sound, don’t like the performance characteristics.
FOr anyone who’s ever owned/ridden a ricer, they are FAST, fun and reliable. Put 80,000 hard beaten miles on a 1000cc Kawasaki Ninja. When it was done there was nothing left but memories, and no regrets.
——Rice Rockets——
Such quaint drivel.
Harley was resurrected and did very well. So well as a matter of fact it has saturated it’s own market.
With respect to Thailand, it eludes the mind of the isolationists here that the products made in Asia will be sold in Asia. When it was apparent that there was little or no room for growth here, Aisia is a good place to grow.
Young and upcoming Asians might like an American Bike tailored specifically to their wants and needs
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