RBC: Harley retail trends appear stable

Research on Harley-Davidson dealerships performed by RBC Capital Markets analyst Edward Aaron and provided to Powersports Business shows stable, but no longer improving, retail trends for H-D.

“We think Q3 estimates have upside potential, and we remain comfortable with full-year production guidance,” Aaron writes. “Our dealer checks point to stable retail trends, although the recovery momentum appears to have slowed somewhat. Based on recent discussions with Harley dealers, we believe U.S. retail sales were likely down a little in September. This implies some slowing on a one-year basis, but multi-year comparisons are indicative of stable trends.”

Aaron also said, “September retail sales could be viewed as a modest disappointment, but Q3 trends support our forecast. … However, Q3 U.S. retail sales should still meet or +5 percent estimate for the quarter.”

The RBC Capital markets research goes on to say that other measures of Harley-Davidson performance at the dealer level continue to trend positively. “Channel inventories remain lean and current, and pricing appears stable. Dealers continue to report improving margins on both new and used bikes. The 2012 model year lineup has been generally well received.”

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