First quarter worldwide Harley-Davidson retail motorcycle sales were down 4.2 percent compared to the same period in 2016. First quarter net income was $186.4 million on consolidated revenue of $1.50 billion versus net income of $250.5 million on consolidated revenue of $1.75 billion in the first quarter of last year.
But the famous motorcycle manufacturer points to silver linings in the stormy sales cloud. While sales may not have increased, the company’s market share of 601cc-plus segment motorcycles did, coming in at 51.3 percent, up compared to the first quarter in 2016.
In anticipation of slower sales, less 2017 models were shipped to dealers which in turn allowed for the selling of the 2016 motorcycles still sitting on the showroom floors.
“First quarter U.S. retail sales were in line with our projections and we remain confident in our full-year plan despite international retail sales being down in the first quarter,” said Matt Levatich, CEO, Harley-Davidson. “We are very pleased with our continued growth in U.S. market share and the progress our U.S. dealers made in reducing their inventory of 2016 motorcycles in the quarter.”
In line with the company’s expectations, Harley-Davidson retail motorcycle sales in the U.S. were down 5.7 percent compared to the year-ago quarter, with the overall U.S. industry down for the same period. Harley-Davidson’s international retail sales decreased 1.8 percent compared to the same quarter in 2016.
International retail sales were down behind weak sales in Asia Pacific, partially offset by strong growth in Latin America. Retail sales in EMEA and Canada were both down as they compared against strong prior year growth of 8.8 percent and 16.3 percent, respectively.
“We recently announced our plan to build the next generation of Harley-Davidson riders globally. We are energized by our focused strategy, and we believe our powerful brand and commitment to excellence will position us to drive demand for our products and grow our sport,” concluded Levatich.
The company’s long-term strategy through 2027 is focused on five objectives to:
- Build two million new Harley-Davidson riders in the U.S.;
- Grow international business to 50 percent of annual volume;
- Launch 100 new, high-impact motorcycles;
- Deliver superior return on invested capital for Harley-Davidson Motor Company (S&P 500 top 25%); and
- Grow the business without growing its environmental impact.
Not only did motorcycle sales slow, some of the riders Harley-Davidson’s finance division helped purchased bikes in the past may not pay the loans back in a timely manner. The Financial Services segment operating income was down 6.6 percent year-over-year due to a higher provision for credit losses.