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 ...
The target market for HD is aging out.
Many younger guys want sport bikes. Or none at all. I buried to many friends who rode motorcycles to want one now.
Only Kawasaki? What about Honda, Yamaha and Suzuki? If the tariffs were removed, the price of those bikes would come down, right?
Absolutely... Their own fault, they have priced themselves right out of business. 20,000 Dollars could buy 20 acres of land in a rural area or go a long ways towards a down payment on a home.
Baby boomers entering old age, and H-D bikes don’t have the same appeal to millennials.
Nailed it. It’s demographics.
Lol, you beat me to it. I’ve never met a Harley rider who didn’t use the term, “rice burner,” in the most sneering, condescending manner....going to be pretty hard to do with that, “Made in Thailand” label.
I don’t own one presently, but I had a Harley years ago and was less than impressed. I don’t need my motorcycle to identify with a lifestyle, which is, in reality what Harley’s marketing is selling. The only V Twins I would ever consider are Victory and Indian. These are gorgeous motorcycles, beautifully designed and executed. Harley finally has some competition from another US manufacturer, the charade of lifestyle is no longer resonating, or may be bleeding over in Indian/Victory’s favor. Harley’s designs are outdated. Competition is a BITCH...
“Nobody in Asia can afford those bikes, and nobody in the US is going to buy a Harley made in Thailand.”
Not so sure about that.
Boomers are growing out of the Harley affection / affliction.
People who do ride discover they really want a comfortable bike and buy something else after selling the Harley and, if they are lucky, pocketing some cash.
The bikes never did get ridden that much because while they are cool they are not very comfortable. I made one 1,000 mile trip on one I was able to borrow and said never, never, never again on a Harley. No amout of cool is worth that much discomfort.
“Young and upcoming Asians might like an American Bike tailored specifically to their wants and needs”
You mean like with a 20” crotch height and 14” wheels?
They are...that is what they are doing.
You are right about that. The number ONE reason for buying a Harley has always been that it was Made in The USA.
Harley also needs to expand their customer base to include short girls.
I can’t legally drive a single model Harley makes.
“The target market for HD is aging out.”
One good modern day Easy Rider road movie would change that.
Nothing like Wild Hogs to suck the cool right out of bike.
Are young guys buying Harleys? I know two men with motorcycles and they are older. The young guys I see riding are not on Harleys.
Motorcycles are a lot like boats. People really want them until they own them. Then they find out that in most weather riding sucks, and with the general lack of skill of American drivers it’s somewhat suicidal, so they sell it.
““...the market is saturated with low mileage used [Harley-Davidson] bikes...”
Verrry interesting! Why should that be so?”
Texting drivers
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