Although Harley-Davidson’s nine-monthly and Q3 2021 figures are skewed by reflecting various stages of pandemic grief and a parallel self-inflicted restructuring shake-up last year, the most serious obstacles it currently faces are supply-chain bottlenecks and weak export demand. BDN financial editor Roger Willis reports.
For the three quarters of this year to date, revenue from motorcycles and related products stacked on 36.3% to £2.71bn. Total turnover, once a contribution from the HDFS consumer credit and inventory funding arm has been factored in, rose by 29.8% to £3.143bn.
Then earnings, set against the dire position in 2020, went crazy. Operating profit surged by 542.5% to £604.9m and net profit was 543.3% up at £457.6m. Harley didn’t actually bother to quote these percentages, labelling them “not meaningful”.
July-September Q3 data calmed down somewhat. Overall revenue for the period increased by 17.1% to £994.5m. Quarterly operating profit grew by 48.1% to £148.8m and net profit put on 35.6% to £118.8m.
Harley-Davidson supremo Jochen Zeitz, modestly monikered as chairman, president and chief executive, described this performance as “a solid third quarter”, thanks to increased shipments, stronger sales and favourable model mix. But he went on to say: “Our teams continue to work to mitigate the impact of ongoing supply-chain challenges that our sector faces.”
Wall Street analysts had been stressing such problems and anecdotal evidence that Harley had cancelled dealer orders it couldn’t fulfil, before they got egg on their faces when gloomy consensus estimates were soundly beaten by reality. Harley’s share price, which had fallen by 4% on the day prior to the results announcement, promptly recovered by 6% the next morning. 
Harley has indeed ramped up wholesale shipments to dealers over the nine months in question. But almost all of this input — a 50.2% rise to 104,190 bikes — has gone into the US domestic market. Machines shipped elsewhere were just 0.5% higher at 55,229.
Shipment mix was illuminating. Conventional touring steeds were 51% up to 79,485. Cruisers climbed by 22.2% to 52,117. And Harley’s new “adventure touring” presence with Pan America 1250 models added 8555, slightly more than half of them arriving at dealers in Q3. However, the Sportster/Street segment was in rapid decline, 33.6% lower at 19,262. That may change in Q4, if sufficient quantities of the latest Revolution-engined Sportster S roll out of a factory gate.
A divergent global retail pattern underlines Harley’s domestic focus. Worldwide nine-monthly sales were 9.1% up to 160,287. But US market recovery accounted for 107,421 of them, growing by 24.4%. The only positive export destination was just over the border in Canada, 30.6% up to 7403 bikes. The EMEA region, which mainly means Europe, fell by 17.7% to 24,580. Asia-Pacific was 9.9% down to 18,263 and Latin Amerca, for what it’s worth, plunged by 45% to 2620.
$-£ currency translation at forex rates on 27 October