By Kannaki Deka
Harley-Davidson, the iconic American motorcycle manufacturer, faced a 23% decline in first-quarter profit, signaling challenges in the industry. The company cited slowing motorcycle sales as high borrowing costs deter potential buyers from making big-ticket purchases. This news caused a significant drop in its shares, down by 18% in afternoon trade.
Despite the setback, Harley-Davidson reaffirmed its full-year revenue growth forecast for its motorcycle business, anticipating a range between flat to down 9%. Additionally, the company aims for an operating income margin of 12.6% to 13.6%, aligning with the previous year’s figures.
CEO Jochen Zeitz emphasized the importance of the upcoming second quarter, stating, “We’re really just entering the riding season… and a lot depends on the second quarter.” This cautious approach led Harley-Davidson to maintain its current guidance.
While Harley-Davidson introduced electric and more affordable options in an effort to attract younger riders, it has primarily relied on its loyal baby boomer customer base to sustain sales. The first quarter saw a 6% increase in North American motorcycle retail, driven by sales of new Touring motorcycles, although falling short of analyst expectations.
Regional sales in EMEA dropped by 11%, primarily due to weaknesses in Germany and France, while APAC regions experienced a 12% decline, attributed to challenges in China.
The company reported an adjusted profit of $1.72 per share for the first quarter, surpassing analysts’ average expectations of $1.51 per share. Revenue for the quarter stood at $1.48 billion, a 5% decrease from the previous year but beating estimates of $1.34 billion.