Harley-Davidson sales slump as U.S. motorcycle business falters

[jpak]

Source: USA Today

MILWAUKEE — Harley-Davidson’s U.S. motorcycle sales fell in the company’s recent fiscal quarter as the company reported a 6.4 percent drop in profit and said a strategy announcement is coming July 30.

The report came as Harley is reeling from the European Union's imposition of tariffs in retaliation to President Donald Trump's tariffs on imported steel and aluminum. The company said recently that it would shift some production out of the U.S. to avoid the tariffs.

With sales slumping, Harley said its net income fell to $242.3 million, or $1.45 per share in the second quarter ended July 1, down from $258.9 million, or $1.48 per share, a year earlier.

Revenue fell 3.3 percent to $1.71 billion.


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Read more: https://www.usatoday.com/story/money/2018/07/24/harley-davidson-motorcycles-earnings/824866002/

[Cracklin Charlie]

1. Thanks, Trump!

[Raven123]

2. It's not clear from the article that sales decline is due to tariffs

[dalton99a]

10. +1. Quarter ended on July 1

The company’s latest quarter ended on July 1, about a week after the motorcycle tariffs went into effect, so the direct impact on the company’s financial results released Tuesday are limited.

Harley has said it would temporarily eat the costs of the tariffs on its motorcycles in Europe, and take a hit on profits, instead of raising prices.

Overall, revenue from motorcycles and accessories fell 3.3% to $1.53 billion.

The company posted a profit of $242.4 million, or $1.45 a share, compared with $258.9 million, or $1.48 a share, a year earlier. Excluding certain costs, the company reported per-share earnings of $1.52. Analysts, on average, were expecting earnings of $1.34 a share.

https://www.wsj.com/articles/harley-davidson-plans-for-motorcycle-tariffs-to-cut-into-margins-1532431919

[ArizonaLib]

13. WSJ BS

In the clipping above, the REVENUES it describes is down 3.3%, but in the next sentence, overall PROFIT fell 6.41%. Looks more like an expense problem than a revenue problem. The WSJ is 'chapped' for the wrong reason. Not looking at Harley's financials in detail, but they may have expensed some assets gone worthless (taken a bath) in the same period, once they knew they could use tariffs as an excuse. Investors aren't that stupid - the Wah Street Jenital is desperate.

[csziggy]

29. I know some people resent their moving plants outside the US

My husband has a Harley Davidson shirt he picked up when we were in North Carolina last year (Dragon Tail shop in the middle of nowhere). He's not a motorcycle guy but the shop was nice enough to let us use their restrooms and he liked the dragon on the shirt.

He's been stopped at least twice while wearing the shirt by people who were upset at Harley-Davison's move out of the country. Both guys assumed my husband was a HD fan and wanted to complain about the move. One guy sort of followed us around the supermarket and made comments every time we stopped to look at products.

[vi5]

3. It's not just the tarrifs it's their entire business model....

....they switched from being a meat and potatoes American motorcycle company to being a "lifestyle brand" more concerned with selling t-shirts and high priced motorcycles to middle aged hedge fund types going through mid-life crisis.

Gibson guitars did the same thing and essentially priced beginners out of buying their actual products, and focused more on t-shirts and branded logo items. And both companies have suffered for it. They deserve every bit of misery they get for the decisions of their shitty CEO's, both of whom were hired for their resumes and not for their actual knowledge of or interest in the products they were charged with selling.

I own both a Harley and a Gibson guitar both of which were bought years ago. But never in a million years would I ever recommend anyone in the market to buy a new product from either of those companies. Anyone would be better off buying one of the countless used items in great shape from older folks who went through the aforementioned mid-life crisis, realized they weren't going to be a Hells Angel or the next Jimi Hendrix and are opting to unload barely used product at great prices.

[ooky]

14. Agree with your post. Harley also has another problem -

most of the Harley owners, at least in my area (eastern NC) are staunch right wing. Their self image is Harleys, guns, vets, and Trump. The way I know this is I also own an old Wide Glide and am familiar with a lot of the people in the area who ride Harleys. So when Harley announced they would shift their European market production out of the U.S. to avoid tariffs, and Trump condemned Harley for it, so did many of Harley's own customers. The U.S. Harley market is starting to die from within as Harley has done little to nothing to diversify their market, the market of mid-life crisis folks you described, mostly Trump supporters.

[Kotya]

23. Gibson's number one competitor are used Gibsons.

Harley Davidson likely has the same problem; a surplus of low-mileage, depreciated motorcycles out there that aging Boomers (or their adult children) are getting rid of.

[vi5]

26. Yep. Especially since both don't do much depreciation...

..you don't save a lot on the used market but you also don't give up much. Motorcycles rarely generate as much mileage as cars and don't lose as much of their value. Also most people who own bikes tend to do their own maintenance on them so they are better taken care of than used cars.

Same thing with Gibsons.

[TheFrenchRazor]

30. they're also over-priced, under-styled, and under-qualitied, if you know what i mean. nt

[vi5]

31. Exactly....

under-styled and under-qualitied wouldn't be that big a problem if they had even SOME semblance of starter models like they used to, but they don't any more. There's no way any of the blue collar working types who have traditionally made up their base are going to be able to afford to get introduced to riding through a new Harley any more.

[sarcasmo]

4. Harley workers in Cult 45 say they will still vote Trump

[aggiesal]

6. And when those workers get laid off ...

they will still vote for IQ45, because we can't have those
libruls running our country.

[IronLionZion]

16. Those damn immigrants stole their jobs

[aggiesal]

5. Still a very profitable company ...

but the greed of corporations, can't stand 1 penny of extra costs,
so of course they'll throw out US workers for EU workers to save
that penny.

[Ohiogal]

7. A local police dept. near me

just bought 4 new Harleys for their policeman.

[infullview]

8. Payback to all those tRumpers and rich SOBs that buy these motorcycles

I hope AMF buys the company again and moves the production line to China.

[duforsure]

9. Companies backing trump and putin

will soon realize they could either lose their business to putin and trump, or go bankrupt soon when the economy is destroyed by these two corrupt criminals.

[dembotoz]

11. maybe if harley switched to burning clean coal

[matt819]

12. Maybe they can share in that $12 billion farmer payout (nt)

[louis-t]

15. USA! USA! USA!

[axm]

17. Harleys are craptastic

Old designs, heavy & slow.

and way overpriced

[Merlot]

20. And built to be extra noisy. Stupid, just stupid.

[workinclasszero]

25. True

Still using heavy air cooled tractor motors lol

[Calista241]

18. I am a motorcycle rider.

And as an avid participant in this industry, Harley-Davidson has fucked it all up themselves.

Most of their riders are aging quickly, and are not buying motorcycles as they die off. The used market is flooded with expensive, low milage, barely ridden Harleys.

The bikes they've been building harken back to the 60's and 70's, with a few modern amenities. It's like they're still on appealing to guys who idolized Steve McQueen. Their bikes are crazy heavy, crazy inefficient, horrendously loud, and ridiculously slow.

There were rumors a few months ago that Harley was trying to buy Ducati from Audi / Volkswagen. They need to revamp their lineup to appeal to a wider range of riders, and buying Ducati would have done that. Harley still has the name recognition; and could turn the company around, but they'll have to take some serious risks, build a quality product, and market themselves better to do so.

[gay texan]

19. Not so fast there

Steve McQueen had great taste in motorcycles. He loved British stuff, Honda's and Husqvarnas.

But yes, Harleys are crap for the most part. Their only sheer moment of brilliance was the XR750

[Merlot]

21. oh, I so hope they don't buy Ducati and ruin it

Last edited Wed Jul 25, 2018, 09:31 AM - Edit history (1)

Harleys are big and loud and stupid. Ducati are sleek and well designed. Chances are that Harley would ruin Ducati before they acknowledged any of the design benefits of the Ducati.

Like when GM bought Saab and made it over, then when they couldn't make a profit killed the brand instead of selling it.

[Calista241]

22. In 2009, Harley bought MV Agusta, the fabled Italian brand, for $109m

Less than a year later, they paid the original owners $20m to take the brand back.

[Merlot]

27. Wow, there's a business strategy as well designed as their bikes.

[jmowreader]

32. I don't think Saab-Scania made a profit on those cars either

Saab-Scania was a huge company that made defense and aerospace products (their original business: Saab means Swedish Airplanes, Ltd.) heavy trucks and autos. The defense/aerospace and big rig divisions made money hand over fist, so they needed a source of tax loss because at the time the Swedish tax system was more than severe. The solution was a line of profit-be-damned autos made to answer the question, what would a car look like if there was no profit motive involved?

[workinclasszero]

24. Trump will kill off Harley Davidson

Hell of a job idiot 45!

[Oneironaut]

28. Just another thing Trump failed at and destroyed. Just like:

- Pig farmers
- Soybean farmers
- Our world standing and reputation
- Cohesion of NATO

What am I missing? There’s just so much #WINNING!!1!

[melm00se]

33. When folks blame everything on Trump

they destroy their own credibility.

Harley Davidson's Revenue, Gross Profit, Operating Income, EBITDA and Net Income have been on a steady decline since at least 2013.

This says there is much more going on than just "Trump's fault"