More bad financial news for Harley-Davidson

Harley-Davidson had more bad financial news yesterday, with a report of a drop in third-quarter profits.

Profit and revenue were down from 2016’s Q3 numbers, and perhaps most worryingly for the Bar & Shield brand, worldwide sales numbers dropped 7 per cent from last year’s third quarter. That is mainly due to falling sales in the US, but H-D also saw international sales drop 5 per cent over last year’s Q3.

Considering that’s the business Harley-Davidson is trying hard to grow, this is not good news. In a conference call, the company’s chief financial officer said Harley-Davidson no longer expects international growth in the second half of 2017.

There could be one good reason for the slump: some customers might have been waiting to buy a new Softail. Those bikes should be available now, so maybe Q4 will see a boost in sales. Otherwise, this has to be concerning for Harley-Davidson, seeing as it’s been months since the company has seen any growth in its core US market.

9 thoughts on “More bad financial news for Harley-Davidson”

  1. I think the main point is missing here. If Harley wants my money they need to build a bike AT LEAST as reliable as a Japanese bike. I dont own a Harley because of all the forums full of talk about the cost of ownership. Most Victory owners are X Harley owners that just plain gave up trying to keep there Harleys on the road. Harley is the only MFG that stocks new complete motors. If you do any research at all the one thing you come away with is there is a problem with reliability. Not an issue if your not a true rider. Or if your bike is a trailer queen.
    I bought a new 2013 Victory and now has 93k its never been back to a dealer. Its never let me down. Its never broke down. Its dirty, its been out in the rain. I abuse the crap out of it. would I have any fear of riding across the country at 93k ….. Nope..
    As far as I am concerned those fancy Harley dealerships are paid for by parts and service sales. And I am not interested in supporting pretty dealerships with my hard earned money.
    I always said Victory was not going to make it because there dealers are starving to death with no after sales income. If Victory was still alive would I buy another ? Nope… Polaris has NO Customer Service. There attitude IS you bought it now go away…. Would I buy an Indian NO ….. Because I still think Polaris as a Company doesn’t support there clientele.

    Will I buy a Harley. I want to. I want a EG . Have wanted one for a LONG time. But the POS Twin Cam drove me away. Now will the new 107 be better ? I will wait and see.

    Harley ……there is lots of people that want your product but are unwilling to be stuck with a product that is UNRELIABLE…

    And yes I know there is plenty of stories of high mileage Harleys on the road with no issues.
    But there is 1000s more with issues.
    So dont get your panties in a twist. Reliability has been a point of contention with Harley.
    Change that and money will roll again….

    Rob

    1. Had my Harley for 9 years – never had anything that needed so little maintainance or had ZERO issues (my Honda’s are as reliable but need more work).

      Otherwise I agree, it’s shitty what Polaris did to Victory owners.

  2. If Harley wants to sell to the older people they have to change. I am 68 still lots of riding years to go, but do not need to go 200 k ph. do not need 1700 cc. Need something light to push around and heavy enough for the wind.
    I had a Harley and was told if I changed the belt every 1000 k would never have to worry. When it broke at 50 k was told I was lucky some bread at 20 and some times 10 k. Went 4 days with out a bike. You could by a Gates belt the same size but different pitch for $80 so why $250 for the Harley belt. At 68 do not want the maintenance of a chain, with out a center stand. Drive shaft is the way to go for older riders. Harley should see this ( WAKE UP HARLEY ) Being old school would like to see air oil cooled but water is OK if done wright (EX. Suzuki C 50 ) cylinders look good and rad does not stick out like a sore thum. Also do not want to have to be looking for gas need enough to in joy a days ride of 300 + K.

  3. “Otherwise, this has to be concerning for Harley-Davidson, seeing as it’s been months since the company has seen any growth in its core US market.”

    Its market share (601cc+) rose to 53.1% in Q3 2017 vs. 52.3% in Q3 2016.

    1. rui – please do the math.
      HD’s percentage may be up but the total U.S. sales of big bore bikes is down.
      And look at the worldwide numbers I posted in Soapbox.
      “There are lies, damned lies and statistics….”

      1. Whenever CMG talks about the financial strength of a company its reminds me of Trudeau talking about quantum computing https://www.youtube.com/watch?v=4ZBLSjF56S8 – stop faking like you know what you’re talking about.

        CMG’s stories often sound like the company is on the path to ruin (which many haters of the MoCo would love to believe – which always struck me as odd as motorcycle enthusiasts) yet only 5% of analysts are currently recommending a sell – the share price actually went up since these earnings were announced. The valuations (EBITDAS) are the envy of their industry (nearly 2x Honda), and they made “only” 277 million in Q3 – how much did Indian, Triumph, BMW, Ducati, etc. make?? This is still an extremely successful motorcycle company any way you look at it, so show some balance. Or better yet, just focus on bikes.

        Otherwise, I did “the math” and what CMG said about not seeing “any growth” in the US market is factually wrong as its share did grow. So really, there are lies and then there are facts.

        1. Rui, at the expense of repeating myself, here are the facts – from THEIR press release.

          “Harley-Davidson reported its third quarter results with worldwide retail motorcycle sales down 6.9 percent in the third quarter compared to the same period in 2016.
          The company’s third quarter 2017 diluted EPS decreased to $0.40 from $0.64 in the third quarter of 2016. Third quarter net income was $68.2 million on consolidated revenue of $1.15 billion versus net income of $114.1 million on consolidated revenue of $1.27 billion in the third quarter of 2016.
          Harley-Davidson U.S. retail motorcycle sales were down 8.1 percent compared to the year-ago quarter, with the overall U.S. industry down 9.2 percent for the same period. Harley-Davidson’s U.S. market share for the quarter was 53.1 percent in the 601cc-plus segment, up compared to the same quarter in 2016. Harley-Davidson’s international retail motorcycle sales decreased 4.6 percent compared to the third quarter in 2016.
          Through nine months, Harley-Davidson 2017 diluted EPS was $2.95, down 16.9 percent from $3.55 in the year-ago period. Harley-Davidson 2017 net income was $513.4 million on consolidated revenue of $4.42 billion compared to nine-month 2016 net income of $645.0 million on consolidated revenue of $4.89 billion. For the first nine months, worldwide retail motorcycle sales were down 6.1 percent compared to the same period in 2016.
          Harley-Davidson continues to expect to ship 241,000 to 246,000 motorcycles to dealers worldwide in 2017, which is down approximately 6 percent to 8 percent from 2016. In the fourth quarter, the company expects to ship 46,700 to 51,700 motorcycles compared to 42,414 motorcycles shipped in the year-ago period. The company continues to expect full-year 2017 operating margin to be down approximately 1 percentage point compared to 2016. The company continues to expect 2017 capital expenditures to be $200 million to $220 million.”

  4. Victims of economy and demographics. The average age of all riders is getting older, however this is especially true for HD. Average age at Sturgis is high 60’s. And to ride in an HD group you must have the biggest engine size, and these bikes are very expensive, they are not for young people starting out. I have over 100 K km in last 4 yrs, have yet to see a Street 500/750. A struggle for all ICE going forward, and HD is leading the way to obsolescence. Sad but true. My kids and their friends care more about a new phone than any car or bike. I was born in 1961, end of the boomers. I just checked and found 2,000 HD bikes (and parts) for sale in Alberta on one web site alone, in mid October! We dino’s are on our way out.

  5. It was bound to happen……can’t go on forever!
    No originality. How many more Harley’s do I have to see with ape bars!
    Evolution of man………yeah right!

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