‘Soft August’ at retail level for Harley-Davidson, analyst says

Retail sales of Harley-Davidson showed a “weakness” in August, although September sales figure to be a more important read, according to a research note provided to Powersports Business by RBC Capital markets analyst Ed Aaron following dealer checks.

“We would not place too much emphasis on this single [August sales] data point,” Aaron reports. “We believe H-D U.S. retail sales for August and quarter-to-date declined in roughly the mid-single-digit range. However, dealers attributed this weakness to the lack of supply associated with low model-year 2012 carryover inventories and the change in timing of the summer dealer meeting.”

Aaron also notes that dealers “reported strong margin expansion, which validates the tight supply conditions, and commented that year-over-year trends were visibly better late in the month as the 2013 models arrived.”

A number of dealers that RBC Capital Markets spoke with “indicated that September is off to a strong start. Still, some dealers indicated that upside to September retail could be capped, given that supply conditions are still tight, and that some consumers who didn’t buy earlier in the season will simply wait until next year at this point.”

Dealers expressed optimism about the business in general, according to the report, “but feedback on the 2013 product line was ‘ho hum.’ Dealers like the new CVO (Breakout) and the 110th anniversary models, but the production of these models will not be enough to move the needle. Note that we were not counting on model year 2013 being a big innovation year. We have consistently heard from management and dealers that the cadence of innovation is not expected to increase until the 2014 model year.”

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