Third-quarter and year-to-date results for Harley-Davidson are a dismal vista of deteriorating sales and plummeting profits. BDN financial editor Roger Willis reports.
During this latest three-month period to the end of September, revenue from motorcycles and related products (parts, accessories, apparel and branded bric-a-brac) fell by 11.9% to £725.9m. Overall revenue, helped by enhanced POS and dealer inventory funding turnover, was 9.7% down at £868.5m. Operating profit suffered a 45.8% plunge to £73m, though, and net profit tumbled by 40.2% to £51.5m. For the nine months of 2017 so far, Harley’s total revenue has dropped by 9.6% to £3.33bn. Operating profit was 19.4% down at £595.8m and net profit 20.4% lower at £387.4m.
Global retail motorcycle sales worsened in the third quarter, with numbers 6.9% down to 64,209. The US domestic market slumped by 8.1% to 41,793. Exports fell by 4.6% to 22,416.
In detail, Japan sank by 15.6% to 2331, within an overall Asia-Pacific regional retreat of 6.7% to 7457. Canada and Latin America respectively slipped by 3.3% and 11.5%. Only light in the darkness was Europe, where quarterly performance was 1.9% up to 8970. However, the EMEA tally with Middle Eastern and African numbers added, was 1.4% down at 10,078.
On a nine-monthly basis, worldwide figures have fallen by 6.1% to 200,646. The US lost 8% at 124,777 and international sales 2.9% on 75,869. Europe was 1.4% positive thanks to 33,311 bikes shifted but couldn’t save EMEA from 1.2% shrinkage to 37,475. Asia-Pacific was 6.3% down to 22,628.
Wholesale shipments in the third quarter were reduced by 14.3% to 41,662. For the year to date, they have shrunk by 11.6% to 194,300. But as 2018 models come on stream, final-quarter shipments are expected to rise by between 10% and 12% to an upper limit of 51,700. For the whole of 2017, the company says it will have shipped 241,000-246,000 motorcycles to dealers, about 6% to 8% fewer than in 2016.
Nevertheless, according to spin from Harley CEO Matt Levatich, everything remains just fine and dandy. Commenting on such lamentable results, he enthused: “Continued weakness in the US motorcycle industry only heightens our resolve and the intensity we are bringing to the quest to build the next generation of Harley-Davidson riders. Launching one hundred new high-impact motorcycles is a critical part of our 10-year journey.”