Harley-Davidson 3Q Profit Falls 15.3 Pct

Domestic buyers are seeing oil prices rising and the home market crumbling, so they’re being cautious about spending, even when it comes to the iconic brand’s bikes. A continued sluggish U.S. market for motorcycles pushed Harley-Davidson Inc.’s third-quarter profit down 15.3 percent, and the motorcycle maker said it expects next year to be difficult, too. Domestically, sales were down 2.5 percent in the three months ended Sept. 30, while the overall U.S. heavyweight market fell 4.4 percent. Overseas, Harley’s sales were up 8.8 percent. Worldwide retail sales of Harley-Davidson motorcycles were flat in the quarter, down 0.2 percent. Revenue dropped 5.8 percent to $1.54 billion from $1.64 billion last year. The company had figured sales would be difficult, so they cut bike shipments and earnings expectations in September. The company expects international sales to continue outpacing domestic ones, as they’ve been doing for the past three years. International bike shipments account for nearly 27 percent of shipments so far this year, compared with 22.5 percent last year

6 Responses to “Harley-Davidson 3Q Profit Falls 15.3 Pct”

  1. 1 VTWINGIRL Oct 22nd, 2007 at 2:16 pm

    The economy sucks! Sales are down everywhere!

  2. 2 Ben Roehr Oct 22nd, 2007 at 6:33 pm

    Cyril. Thanks for keeping us updated. Great motorcycle blog.

  3. 3 goldiron Oct 23rd, 2007 at 9:29 am

    I find Harley’s balance sheet particularly troublesome. Not in the sense of impending bankruptcy or anything; just in the sense of how the numbers are moving, relative to what’s happening on the income statement. With sales down 6% year over year, we’ve got accounts receivable up 23% and inventory up 34%. This is precisely the opposite trend from the one we’d like to see, and it also shows inventory growing objectively, rather than shrinking as we’d hoped.

    The taller Harley allows its pile of unsold inventory to grow, the greater the pressure becomes to sell off old inventory to make room for new wares. In this sense, Harley is no different from automakers like Ford (NYSE: F) or GM (NYSE: GM), or industry rivals Honda (NYSE: HMC) and Polaris (NYSE: PII) for that matter — all these guys need to clear out one year’s models to make room for the new year’s line. The longer they postpone moves to slash inventory, the deeper the price cuts that must ultimately be made to move the goods.

    Being “optimistic and confident” about the future isn’t enough. At some point, management needs to bite the bullet and take steps to make that future happen, or else Harley won’t be riding for long.

  4. 4 madpuppy Oct 23rd, 2007 at 12:10 pm

    Yes I agree with all. Has anyone noticed a drop in participation at ” shows “?. I talked with a friend that had four customers cancel orders in the middle of building. and with the rise in vendor space rent, high fuel costs, hotel rates etc., decided to just stick around and do local event’s. Has this affected any of you in the same manner ?.

  5. 5 Dan Struck Oct 23rd, 2007 at 12:21 pm

    Yes, US economy sucks. Was at biketoberfest. Attendance way down for both bikers and vendors. Everybody worrying about paying the mortgage. It can get better only whhen the real estate market will stabilize.

  6. 6 dragon Oct 27th, 2007 at 5:10 am

    We the people is what it says and untill we the people do something all the job’s will go over sea’s or to mexico that is what is hurting the us right now

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Cyril Huze