Harley-Davidson today reported continued strong improvement in earnings and dealer retail sales in the third quarter of 2011 and through the first nine months of the year, compared to 2010.
Income from continuing operations in the third quarter rose 95.9 percent to $183.6 million compared to income of $93.7 million in the year-ago quarter. Third-quarter operating income from Motorcycles and Related Products grew 78 percent on higher shipment volume and operating margin improvement, while operating income from Financial Services grew 21.9 percent on continued improvement in credit performance, compared to the third quarter of 2010, according to the company.
Retail sales of new Harley-Davidson motorcycles grew 5.1 percent worldwide in the third quarter compared to the prior-year period, led by a 5.4 percent rise in the U.S.
For the first nine months of 2011, Harley-Davidson income from continuing operations was up 63.5 percent compared to the year-ago period to $493.4 million. Retail sales of new Harley-Davidson motorcycles through nine months grew 4.9 percent worldwide compared to the year-ago period.
“We are pleased with our sustained progress and we continue to realize strong momentum in the transformation our business,” said Keith Wandell, President and CEO of Harley-Davidson, Inc.
“Two years ago we embarked on our strategy to focus solely on the Harley-Davidson brand, provide the flexibility required in today’s market and make Harley-Davidson lean, agile and more effective than ever at delivering remarkable products and extraordinary customer experiences. Today, we continue to see the positive results of the course we have charted. The changes underway in manufacturing, product development and retail capability will increasingly enable Harley-Davidson to be customer-led like never before.
“Harley-Davidson’s transformation involves a tremendous amount of highly complex, challenging work across every part of the organization. While much remains to be done, we are well down the road and everyone involved deserves much credit for bringing these changes to life,” Wandell added. “I continue to be impressed by the willingness of all employees, including the union leadership, to do the necessary things to transform our business to be a world class, sustainable operation."
On a worldwide basis, third-quarter retail Harley-Davidson new motorcycle sales grew 5.1 percent compared to last year’s third quarter to 61,838 units. Dealers sold 42,640 new Harley-Davidson motorcycles in the U.S., a 5.4 percent increase compared to last year’s third quarter. In international markets, dealers sold 19,198 new Harley-Davidson motorcycles during the third quarter, an increase of 4.4 percent compared to the year-ago period.
Through nine months, worldwide retail sales of new Harley-Davidson motorcycles increased 4.9 percent compared to the prior-year period to 194,829 units. U.S. retail sales of new Harley-Davidson motorcycles increased 4.7 percent to 127,930 units through three quarters compared to the year-ago period. In international markets, retail sales of new Harley-Davidson motorcycles increased 5.2 percent to 66,899 units for the first nine months of 2011 compared to 2010. Through nine months, industry-wide U.S. heavyweight new motorcycle (651cc-plus) retail unit sales increased 3.7 percent, compared to the year-ago period.
Revenue from Harley-Davidson Motorcycles during the third quarter of 2011 of $922.3 million was up 15.5 percent compared to the year-ago period. The company shipped 61,745 Harley-Davidson motorcycles to dealers and distributors worldwide during the quarter, compared to shipments of 53,293 motorcycles in the third quarter of 2010.
Revenue from Motorcycle Parts and Accessories (P&A) totaled $235.7 million during the quarter, up 7.6 percent, and revenue from General Merchandise, which includes MotorClothes Apparel and Accessories, was $69.3 million, up 8.2 percent compared to the year-ago period.
Through the first nine months of 2011, the company shipped 182,387 Harley-Davidson motorcycles to dealers and distributors, a 9.9 percent increase compared to last year’s 166,013 units for the period.
Revenue from Harley-Davidson Motorcycles through nine months was $2.76 billion, a 13.2 percent increase compared to the year-ago period. Nine-month P&A revenue was $655.4 million, a 9.3 percent increase from the first nine months of 2010. General Merchandise revenue was $204.8 million, a 3.6 percent increase compared to the same period in 2010.
The Financial Services segment recorded operating income of $62 million in the third quarter, compared to operating income of $50.9 million in the year-ago quarter. The increase in year-over-year operating income was largely the result of continued improvement in credit performance at Harley-Davidson Financial Services, the company said. Through nine months, operating income from financial services was $212.0 million, compared to operating income of $138.4 million in the first three quarters of 2010.
Look for more coverage of the Harley-Davidson third quarter earnings results in an upcoming edition of Powersports Business.
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