outbrain
Close  

Harley-Davidson shares crash as US sales downshift

/ 08:20 AM October 21, 2015
Harley-Electric Motorcycles

This Wednesday, June 18, 2014 photo shows Harley-Davidson’s new electric motorcycle at the company’s research facility in Wauwatosa, Wis. The company plans to unveil the LiveWire model Monday, June 23, at an invitation-only event in New York. AP Photo

NEW YORK, United States—A slowdown in US sales of Harley-Davidson’s iconic motorcycles hit third-quarter earnings and sent its shares skidding to a nearly three-year low on Tuesday.

After a solid rebound from the 2008 financial crisis, the company admitted the air has gone out of sales growth and said it would lay off a part of its 6,500 workforce as its tries to strengthen marketing both domestically and internationally.

ADVERTISEMENT

In the third quarter, Harley sold 72,178 new motorcycles, more than 1,000 fewer than a year ago, with all of the decline in US sales. For the first nine months of 2015, bike sales were down more than 3,000 units to 217,770.

That turned into a 6.5 percent fall in net income, to $140 million, for the third quarter and a 7.8 percent decline to $710 million for the nine months.

FEATURED STORIES

Harley shares tumbled 16.1 percent to $47.02 in midday trade, hitting a level last seen in late 2012.

Founded in 1903, the Milwaukee, Wisconsin-based company’s bikes, fondly called Hogs, represent the soul of American motorcycling. But, despite soaring US auto sales, Harley’s market has stagnated the past two years, and sales remain well below the peak of 350,000 bikes in 2006, before the financial crisis.

The Asia-Pacific region, excluding Japan, has been the company’s saving grace, with sales over the first nine months of the year up 16.9 percent, or by more than 2,300 units.

Harley’s reputation for quality has taken a hit, too, with recalls that have cost it $32 million so far this year.

Cutting the company’s forecast for the year, chief executive Matthew Levatich warned that it expects more competition going forward, and plans to invest more in both product development and marketing “to maintain the premium nature of the brand.”

“We’ve also had some headwinds of our own making such as product availability and voluntary recalls,” he told analysts in a conference call.

“We fully recognize we have to raise our game…. I want to be crystal clear. The path forward will play out over a number of years.”

ADVERTISEMENT

RELATED STORIES

Harley-Davidson opens Manila dealership with a loud bang

Harley Davidson ready to rumble

Read Next
EDITORS' PICK
MOST READ
Don't miss out on the latest news and information.
View comments

Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.

TAGS: Business, crash, downshift, Earnings, Harley Davidson, motorcycles, quarter, sales, shares, US
For feedback, complaints, or inquiries, contact us.


© Copyright 1997-2020 INQUIRER.net | All Rights Reserved

We use cookies to ensure you get the best experience on our website. By continuing, you are agreeing to our use of cookies. To find out more, please click this link.