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FIRST-QUARTER DECLINE FOR HARLEY

Bike sales volume, revenue and operating profit all fell during Harley-Davidson’s first financial quarter of 2015.

The brand’s global retail motorcycle sales dropped by 1.3% to 56,661 units. US domestic sales were down by 0.7% to 35,488 units. The company primarily blamed aggressively competitive discounting for that reversal. Retail sales in export markets fell by 2.4% to 21,173 units. Although Latin America and Canada both posted rises, respectively of 0.3% and 5.7%, Europe was distinctly negative with a 5.6% decrease. This mainly reflected weakness in France and Germany, Harley’s biggest European markets. The Asia Pacific region also dropped by 1.1%.

Commenting on these figures, Harley’s soon-to-retire supremo Keith Wandell said: “Given the first-quarter retail results, and ongoing discounting in the US which we expect will continue, we are taking the precautionary step of lowering our estimated growth rate for full-year motorcycle shipments in order to manage supply in line with demand and protect the premium nature of our brand.”

The company now predicts annual wholesale shipment growth to dealers worldwide of about 2%-4% (276,000 to 281,000 units), compared with a previous forecast of 4%-6% (282,000 to 287,000 units). It shipped 79,589 units into the trade during the first quarter, down by 1.4% on the equivalent period last year.

Three-monthly revenue from motorcycles and related products declined by 3.9% to £1.014bn. Associated operating profit was down by 0.6% to £231.9m. Dealer inventory and POS funding arm Harley-Davidson Financial Services posted a 5.1% revenue increase to £109m with associated operating profit up by 2.3% at £43.4m.

Total revenue was reduced by 3.1% to £1.123bn and overall operating profit fell by 0.2% to £275.3m. However, net profit actually grew by 1.5% to £181.1m.

Wandell added: “While the first quarter had its share of headwinds, our business is strong and we remain clearly focused on executing Harley-Davidson’s strategy to be customer-led in everything we do, grow our reach among new customers in the US, grow internationally and continuously improve every aspect of our operations. We continue to manage for long-term performance from a position of great strength.”

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