Harley-Davidson’s second-quarter and half-yearly financial performance was weak. But the company took some solace from increased quarterly domestic market share and consistent export sales growth.
Global retail sales during the three months to 30 June fell by 1.9% to 87,266 bikes, against a wholesale shipment increase of 3.5% to 88,160. Decline was driven by a sharp 5.2% sales drop on home territory to 54,786. However, the overall US motorcycle market was 8.6% down in the same period so Harley’s share rose by 2% to 49.5%.
International sales were 4.3% up at 32,480 units, mainly boosted by a European surge of 7.3% to 15,188. Asia Pacific countries added another 8581 and marginal 0.8% growth, while Canada put on 2% to 3813. Latin America fell by 5% to 2573 on the back of Brazilian economic woes.
Turnover from motorcycles and related products was actually up by 1.2% to £1.26bn. But associated operating profit plunged by 15.2% to £244.4m. Operating margin declined from 23.1% to 19.3%. Financial services revenue grew by 10% to £144.6m, with operating profit 9.4% up to £67.8m.
Consolidated revenue for Harley as a whole increased by 2.2% to £1.41bn. Operating profit was 10.9% down at £312.2m. Net profit sank by 6.5% to £212.3m.
For the six months of 2016 to date, Harley’s total worldwide retail bike sales volume has fallen by 0.6% to 144,724 units. Wholesale shipments to dealers climbed by 3.3% to 115,439. US retail was 3.4% down on 90,112. In contrast, Europe stacked on 6.8% to 23,783.
Revenue was 3.1% up at £2.73bn. Operating profit dropped by 8.2% to £606.6m and net profit was 6.8% down to £402m.
Commenting on these results, Harley-Davidson chief executive Matt Levatich, pictured, said: “While our investments to grow product awareness and ridership globally are beginning to take hold in a number of markets, current conditions in the US and economic headwinds in other parts of the world combine to raise caution.”
Harley has therefore cut full-year guidance for shipments to dealers from a previous 269,000 to 274,000 units range. The company now expects to wholesale between 264,000 and 269,000 bikes.