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STAGNANT HARLEY CRUISES ON

Sales and profit continue to deteriorate at US biking blue-chip Harley-Davidson, primarily on the back of its shrivelling domestic market, according to full-year 2016 corporate results. BDN financial editor Roger Willis reports.

Over the past year, Harley’s revenue from motorcycles and related products fell by just 0.7% to £4.2bn. However, associated operating profit was 11.7% down at £615.8m. Operating margin decreased from 16.5% in 2015 to 14.7%.

Revenue from POS and dealer inventory funding arm Harley-Davidson Financial Services was 5.6% up to £577.3m. But its operating profit also dropped, by 1.7%.

Overall revenue was flat year-on-year at £4.77m. Operating profit sank by 9.2% to £835m and net profit by 8% to £551.1m. Net long-term debt was reduced by 3.4% to £3.7bn.

Global retail bike sales volume for the brand was 1.6% down at 260,289 units, falling slightly short of 262,221 wholesale shipments to dealers (a year-on-year shipment drop of 1.6%). US domestic sales slid by 3.9% to 161,658 units, against a 601cc-plus market decline of 5.2%. Export sales were 2.3% up to 98,631 units.

Best-performing international market was Europe, rising by 8.3% to 39,942 units. Canada posted a 5.5% rise to 10,203 units. Asia-Pacific countries were 2% up at 32,889 units. Japan was the largest contributor to that particular total, with a 6% improvement to 10,279 units. Latin-American sales plunged by 13.2% to 9701 units. European and Asia-Pacific tallies were both all-time records.

In 2017, Harley anticipates full-year shipments to be similar or slightly lower and expects to deliver between 66,000 to 71,000 bikes to dealers in the first quarter.

Commenting on these figures, Harley-Davidson chief executive Matt Levatich waxed lyrical: “The global competitive environment remains intense but our results demonstrate that increased investments to drive demand and bring impactful new products to market are working. We are energised by our resolve to compete and win in the US and in major international markets.”   

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