Harley’s U.S. Sales Plunge 13%, Steepest Quarterly Drop in Eight Years

(Bloomberg) -- Harley-Davidson Inc. reported better-than-expected profit as selling more expensive motorcycles takes some of the sting out of a continued drop in sales.

  • U.S. retail sales plunged 13 percent in the three months ended in September, the steepest quarterly drop in more than eight years.

Key Insights
  • Despite weak U.S. demand and tepid overseas growth, motorcycle-related revenue rose on the richer mix of shipments.
  • U.S. sales took a turn for the worse after Donald Trump said he would back a boycott of Harley. The president started directing his ill will toward the company in June, when it said it would move some production overseas to sidestep EU tariffs.
  • While the EU’s tariffs on Harley’s bikes jumped to 31 percent earlier this year, from just 6 percent, demand is holding up in that market. Retail sales rose 4.6 percent in the quarter.

Market Reaction

  • Harley shares rose 1.7 percent to $39.40 as of 7:22 a.m. Tuesday in New York, before the start of regular trading. The stock had dropped 24 percent this year through Monday, when they closed at the lowest since February 2016.

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  • Earnings per share was 68 cents, or 78 cents excluding costs related to closing a plant in Missouri. Analysts anticipated 51 cents.
  • For more details on the earnings, click here.

Harley’s U.S. Sales Plunge 13%, Steepest Quarterly Drop in Eight Years