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ANOTHER DOWN-SHIFT FOR HARLEY

The only sign of meaningful acceleration for Harley-Davidson in its 2017 half-yearly results was in the rate of decline for turnover, profits and retail sales, reports BDN financial editor Roger Willis.

Revenue dropped by 9.5% to £2.506bn. Operating profit fell by 13.5% to £531.7m. Operating margin on motorcycles and related products deteriorated from 20.2% to 19.2%. Net profit was 16.1% down at £341.5m.  

Global unit sales for this six-month period were 5.7% down to 136,437 bikes. Harley’s core US domestic market suffered the biggest hammering with a 7.9% drop to 82,984. Exports were 2.1% lower at 53,453.

On the international front, there were slight glimmers of hope. European sales were 1.3% up to 24,341. Latin America also increased, by 5.3% to 4697. But the overall EMEA (Europe, Middle East and Africa) region was negative by 1.2% at 27,397. And so was the Asia Pacific region, falling by 6% to 15,171. Within that, Japan sank by 4.2% to 4663. Formerly buoyant Canada lost ground too, retreating by 1.5% to 6188.

Performance during the second April-June quarter was worse. Worldwide unit sales fell by 6.7% — with the US domestic and export numbers respectively 9.3% and 2.3% in arrears.

The company says first-half wholesale shipments were reduced by 10.8% to 152,638 motorcycles, moderating dealer showroom inventory in the face of weakening market conditions. For the full year, it now anticipates shipping a maximum of 246,000 bikes, about 8% fewer than in 2016.

Shrugging off such abject reality with unbridled corporate optimism in his results statement, Harley-Davidson supremo Matt Levatich said: “We are pleased with our ability to deliver strong margins despite challenging market conditions, particularly in the US. Our long-term strategy, focused on building the next generation of Harley-Davidson riders, is our true north. New product investment is one pillar and we are energised by the strength of our model year 2018 motorcycles coming later this summer.”

New York Stock Exchange investors evidently didn’t believe a word of Levatich’s exultant prognostications. Over the initial three hours of trading after his results announcement, Harley-Davidson shares plunged mercilessly in value by 10%.   

   
 

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