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AGAINST ALL ODDS

Beating gloomy Wall Street analysts’ estimates for the six months of 2022 to date and Q2 in particular, Harley-Davidson’s half-year results were welcomed by investors — pushing its share price almost 8% higher on their release date. BDN financial editor Roger Willis reports.

The company got away with increasing prices in the face of strong domestic demand, even though it was struggling to satisfy orders due to supply-chain woes. And, significantly, Harley supremo Jochen Zietz stood by his upbeat full-year forecast.

Nevertheless, total six-monthly revenue virtually flatlined, rising by just 0.3% to £2.443bn. The contribution from motorcycles and related products was pretty static too, a mere 0.2% up to £2.116bn. Both turnover and operating profit from that direction, the later falling by 4.5%, had been adversely impacted by a two-week production halt during May, that slashed wholesale bike shipments by 15% in Q2. The disruption had been caused by regulatory compliance issues at a component supplier.

Profits from the HDFS consumer credit and dealer inventory funding arm also declined, 19.2% down to £141.8m. This was attributed to an increased allowance for lending default losses. Overall operating profit was 9.5% lower at £467.1m and net profit fell by 5.8% to £361.2m.

Shipments to dealers worldwide over the six months in question were 7.6% down to 103,011 bikes. Within that, US domestic share sank by a harsher 15.7% to 64,276. Hardest-hit model segment was Touring, where showrooms received 16.9% fewer machines, amounting to 47,770. Cruiser were nearly as bad, 14.4% down to 30,450. Conversely, Harley plants in Wisconsin and Pennsylvania shipped 13% more Sportster and Street models, adding up to 16,212. Adventure, filled by the ground-breaking Pan America 1250, made the most magnificent advance by more than doubling its numbers — up 111.9% to 8579.

Global retail sales dropped by 12.7% to 95,604. US domestic numbers shrank by 19.1% to 61,228. Canada copped a more minor retreat of 5.4% to 4962 bikes ridden away from dealers. The EMEA region, dominated by Europe, fell by a marginal 1% to 15,041 — despite having been boosted by sharply reduced EU and UK import tariffs. On a brighter note, Asia-Pacific countries grew by 8.4% to 12,773 and Latin America added 1.8% to 1600.

Ebullient as ever, Harley-Davidson’s chairman, chief executive and president Zeitz commented: “Reaffirming our guidance for the year, despite the production suspension, demonstrates the effectiveness of our strategy and the power of our brand. With the suspension behind us, we are fully focused on mitigating impacts of the volume loss with the ambition to deliver on our goals.”

 

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