Analyst: Restructuring/SAP implementation status key for Harley

Wells Fargo Securities analyst Tim Conder provided a research note to Powersports Business today that offered a preview of the April 25 Harley-Davidson Q1 earnings release.

The report says that Wells Fargo Securities Q1 dealer checks “confirm accelerating HOG retail sales through the quarter (Q1 2012 new units +16-18%) providing enhanced 2012/2013 demand visibility. HOG’s strong retail sales and share gains continue to deplete U.S. channel inventories, building pent-up demand that will only begin to be met when restructuring/SAP implementation production constraints start to abate in [the second half of 2012].”

Conder writes that Wells Fargo Securities believes that Harley-Davidson “could slightly exceed the Street consensus for revenue and EPS as the company will likely ship near the higher end of a 58-63K unit range given (1) Solid sell-through, and (2) Desire to restore U.S. channel inventories to appropriate minimum stocking levels as quickly as possible. Key to the conference call will be commentary if the timetable of finalizing restructuring/SAP implementation at York (50% of HOG’s production) is ahead of plan, on plan, or behind plan. This will have implications for (1) 2012 prodution levels and HOG’s ability to narrow a widening supply/demand gap at retail, (2) timing of realization of improved margin benefits.”

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button