Harley-Davidson’s Quarterly Earnings Continue To Fall

Quarterly earnings for Harley-Davidson Inc. continue to fall according to their 2019 third quarter update.

The Milwaukee-based motorcycle company reported its delivered earnings per share and motorcycle segment operating margins were ahead of expectations, but their U.S. retail rates are down 3.6 percent — continuing a negative trend. That plus the cost of tariffs hurt the company as earnings fell 24 percent since around the same time last year.

Company executives, CEO Matt Levatich and Chief Financial Officer John Olin, said in a Tuesday morning conference call that they’re focusing on advancing brand amplification efforts and building committed ridership.

“We have two primary focus areas,” Levatich said. “Attracting more people to riding and keeping riders riding.”

Harley-Davidson is also preparing to start motorcycle production at its new Thailand plant, announced in 2017, with the plan of shipping those bikes to the European Union. The plant has already produced bikes for China and Levaitch said they will start to make bikes for the EU later this month.

During the last report, the company said they were expecting to see fewer costs related to tariffs by next year.

“We expect our business to remain under pressure as the U.S. and developed international markets continue to face substantial head winds,” Olin said. “The global competitive environment remains intense with progressive promotional activity in the U.S. and world wide new product introductions.”

“We expect to overcome these market challenges by focusing on our intensified efforts to execute our More Roads plan and to build committed riders,” he said.

Harley-Davidson’s international retail sales were up 2.7 percent this quarter and the company said it will continue to make advances to improve retail sales, strengthen leadership and launch new models with added technology.

Levatich said during the conference call that in 2018 the company had over 1.3 million riders overseas and 3 million in the U.S. He said that by 2027 he’d like to have 4 million Harley-Davidson riders in the U.S.

Still, Levatich said they’re looking at the business with an abundance of caution.

“We are probably in the most uncertain forward environment that we’ve been in a long time,” Levatich said. “We can’t predict the future anymore than anyone else can. All we can do is be as nimble and responsive as possible and I think we are well positioned to do that.”