Harley-Davidson faces weaker sales despite appeal to young riders
Harley-Davidson is bracing for weaker sales this year, as the iconic motorcycle maker continues to pursue a turnaround plan aimed at attracting new riders.
The Milwaukee-based company, which is scheduled to report first-quarter earnings Tuesday, has struggled to reverse a sales slump amid tougher competition and low ridership rates among younger generations. Harley-Davidson has said it’s focused on initiatives to reach a younger audience and promote motorcycle riding in the U.S. The manufacturer hopes to attract two million new riders in the next decade with the introduction of new models, including an aggressive push to launch electric bikes.
On Monday, Harley-Davidson announced an internship program that will pay college students to ride a motorcycle for the summer and document their experiences.
Anticipating another year of weak demand, Harley-Davidson said in January that it will likely ship 231,000 to 236,000 motorcycles in 2018, down from 241,498 last year. The company also announced that it’s consolidating assembly operations in Kansas City into a plant in York, Pennsylvania.
In a recent note to clients, analysts at Goldman Sachs said about 50% of the U.S. Harley-Davidson dealers they contacted saw a year-over-year sales decline in the first quarter, while 44% reported sales growth. The investment bank expects an 8% decline in Harley-Davidson’s U.S. retail sales for the quarter. Total shipments are on pace to hit 64,400, near the high end of the company’s guidance range.
Goldman Sachs added that despite actions that will likely boost sales in the long run, Harley-Davidson faces another difficult year. Production cuts and improved inventory management have supported stronger pricing for Harley-Davidson motorcycles. However, dealers noted that Indian Motorcycle, a subsidiary of Polaris, has been more aggressive in sponsorships and other marketing, while Japanese rivals such as Honda and Yamaha have better financing offers for customers.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| HOG | HARLEY-DAVIDSON INC. | 32.83 | +0.34 | +1.05% |
| PII | POLARIS INC. | 66.92 | +1.70 | +2.61% |
Wall Street analysts project that Harley-Davidson will report earnings of 88 cents a share on revenue of $1.25 billion for the first quarter. In the same period last year, Harley-Davidson earned $1.05 a share with revenue of $1.5 billion.
Shares of Harley-Davidson were trading 14 cents higher at $41.15 in after-hours trading Monday.