Although Harley’s first-quarter 2024 results statement was slightly better than Wall Street analysts anticipated, virtually all of its percentage shifts went the wrong way. No surprise then that investors slashed a savage 15.8% off its share price value on the day of announcement. BDN financial editor Roger Willis reports.
Consolidated revenue for the combined enterprises of Harley-Davidson Inc (HDI) suffered a 3.3% decline to £1.383bn. Quarterly HDI operating profit fell by 28.8% to £210.2m. Net profit attributable to HDI plunged by 22.7% to £187.8m.
Within that, turnover from motorcycles plus related products and services by the Harley-Davidson Motor Company (HDMC) was 5.2% down to £1.178bn. Associated operating profit dropped by 29% to £190.5m. Operating margin sank from 21.6% to 16.2%. An allegedly planned decrease in early-season motorcycle shipments and weak export sales largely took the blame despite North American retail sales improving on the back of new touring bikes introduced at the end of January.
Revenue generated by consumer credit and dealer inventory funding arm Harley-Davidson Financial Services (HDFS) increased by 11.5% to £198.6m. However, HDFS operating profit fell by 7.8% to £43m. High-interest rates and greater provision for loan defaults in the US domestic market, “relating to the current macro-economic environment”, were held responsible.
Harley’s LiveWire electric motorcycle spin-off, in which it has an overwhelming majority stake, delivered a 39% revenue slump to just £3.3m on unit sales rising by 85.7% to 117. That registered an operating loss of £23.3m, against a loss of £19.6m in Q1 last year.
Total Harley-Davidson branded motorcycle shipments to dealers worldwide in the quarter were 7.3% down to 57,672 units. The touring segment was 9.7% up to 35,356. Cruisers fell by 26.2% to 15,691. Sport/lightweight retreated by 24.6% to 6585. Adventure was 23.6% adrift on 1662.
Global retail sales were essentially flat, falling by a mere 20 units to 39,405. North America provided most of the meat and two veg, 5.6% up to 27,486. The EMEA region — principally Europe — was 11% down to 5264. Poor performance in Germany and France, as well as absent inventory of 2024 Street Glide and Road Glide models, were the excuses. Asia Pacific was 12.3% in arrears on 6034. Latin America added 15 more machines to achieve its scant total of 621.
Harley supremo Jochen Zeitz introduced these results by putting on a brave face, claiming this was “a good start to the year”. But his full-year 2024 outlook guidance said otherwise. He expects HDMC revenue to be flat or potentially 9% down. And HDMC operating margin will sink to somewhere between 12.6% and 13.6%. HDFS operating profit will either be flat or up by 5%.
$-£ currency translation at forex rates applicable on 29 April