Nov. 2, 2009 – Harley’s sales decline slows in 3rd quarter

Although its U.S. retail sales continue to decline vs. a year ago, Harley-Davidson did see market share gains in its recent quarter.
The OEM said it outperformed the market in its relevant market, the 651cc-plus on-road category. Harley-Davidson’s U.S. retail sales fell more than 24 percent from a year ago but its relevant market declined close to 36 percent in the same time period, the company said. Both of those retail sales numbers — Harley’s and the industry’s — are improved from a quarter ago.
For its first nine months, Harley’s U.S. retail motorcycle sales are down 25.5 percent.
In international markets, the company’s new unit sales fell 13 percent compared to a year ago for its third quarter. Harley-Davidson currently relies on its international sales for more than 30 percent of its revenue.
Overall, the company’s third-quarter revenue of $1.2 billion represented a 21 percent drop from the year-ago quarter. However, Harley saw a much bigger decrease in its net income. Its third-quarter net income of $26.5 million represented an 84 percent decline from a year ago.
Part of the net income decline occurred due to losses in Harley-Davidson Financial Services (HDFS). That group recorded an operating loss of $31.5 million for the third quarter. Harley-Davidson executives said the company is looking at a variety of strategies to bring HDFS back to profitability. The company already made lending requirement changes earlier in the year — including requiring higher down payments in some cases — and said it has seen improved loan performance due to those changes.
During its third quarter, Harley-Davidson shipped more than 54,000 motorcycles, on the lower end of the company’s forecast. For the full year, Harley expects to ship between 222,000-227,000 motorcycles, including 35,000-40,000 in the fourth quarter.
Harley also announced the following about its sales through nine months:

  • Overall sales have totaled $2.6 billion, a decrease of nearly 19 percent;
  • Parts and accessory sales have amounted to $623 million, a decline of nearly 12 percent from a year ago;
  • General Merchandise revenue totaled $215.5 million, also down 12 percent from the year-ago quarter. psb

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