Saturday, March 2, 2024
HomeNEWSFINANCIALHARLEY-DAVIDSON: ANOTHER FINE MESS

HARLEY-DAVIDSON: ANOTHER FINE MESS

With its 2023 aspirations suddenly unravelling, to the extent that investors brutally dumped Harley-Davidson shares when the company revealed the latest results, desperate measures may be in order. BDN financial editor Roger Willis reports.

Across the three quarters of 2023 to date, total revenue from all operations was 3.7% up to £3.923bn. However, combined operating profit slumped by 11.6% to £656.3m and net profit was 2.7% down to £558.2m. 

Turnover from Harley-Davidson motorcycles, related products and licensing (HDMC activity) during this nine-month period rose by 2.1% to £3.322bn. But associated operating profit was flat, 0.5% lower at £578.3m. 

Revenue attributed to Harley’s LiveWire electric bike spin-off copped a 39% decline to £18.8m and the subsidiary declared an operating loss of £67.1m — worsening from a £30.9m loss 12 months earlier. 

Harley-Davidson Financial Services (HDFS) benefited from charging higher interest rates on US consumer credit and dealer inventory funding to achieve 16.7% revenue growth to £580.4m. But much larger provision for loan defaults slashed operating profit by 30.2% to £145.1m.

Year-to-date wholesale motorcycle shipments to dealers worldwide fell by 5.9% to 150,586 units. Taken by segments, Touring increased by 1.3% to 76,270 and Cruiser was 13.8% up at 53,876. But Sport dived by 43.8% to 15,849, Adventure virtually halved, 49.2% down at 4445, and LiveWire shipped only 146 units, against 528 in YTD 2022.

Nine-monthly global retail sales were 8.3% down to 132,609 units. North American volume dropped by 9.4% to 88,427. The EMEA region — predominantly Europe — was 8.6% lower on 21,884. Asia-Pacific countries almost broke even, just 0.9% in arrears on 20,190. Latin America was 10.9% adrift, shifting only 2108 bikes.

Much of the overall pain was confined to third-quarter woes. Harley’s headline Q3 revenue sank by 6% to 1.274bn. HDMC’s portion was 8.8% down to £1.068bn. LiveWire turned over less than seven million quid. Combined operating profit plunged by 38.2% to £172.4m and net profit retreated by 23.9% to just £163.7m. July-September wholesale shipments dropped sharply by 20.6% to 57,061 units and retail sales finished 15.6% down on 49,387. Suspicions that a Q4 cliff edge beckoned were inevitable.  

No wonder Harley-Davidson supremo Jochen Zeitz was clutching at straws in his results presentation. “Against a challenging macro and consumer backdrop, we have been able to achieve a result that preserves profitability at an industry-leading level. Harley-Davidson remains committed to its Hardwire strategy and we will do everything possible to achieve our goals, while being realistic that current market conditions are complex.”

$-£ currency translation at forex rates applicable on 27 October

Previous article
Next article
RELATED ARTICLES

Product News

Next gen Can-Am ATVs at LAMMA

Can-Am elected to release its new utility models at the LAMMA show at the NEC in January. This comprised the Can-Am Outlander 500 (HD5)...