This morning August 1, 2012 before financial markets opening, Harley-Davidson, Inc. (NYSE: HOG) reported continued increases in earnings and dealer new motorcycle sales for the second quarter of 2012. Retail sales of new Harley-Davidson motorcycles grew 2.8 percent worldwide in the quarter compared to the prior-year period, including an increase of 4.0 percent in unit sales in the U.S.
On a worldwide basis, dealers sold 85,714 new Harley-Davidson motorcycles in the second quarter of 2012, a 2.8 percent increase compared to 83,396 motorcycles sold in the year-ago period. Dealers sold 55,761 new Harley-Davidson motorcycles in the U.S., a 4.0 percent increase compared to the second quarter of 2011. In international markets, dealers sold 29,953 new Harley-Davidson motorcycles during the second quarter, a 0.5 percent increase compared to sales of 29,797 units in the year-ago period. Retail unit sales increased 10.0 percent and 37.9 percent in the Asia Pacific and Latin America regions respectively, and decreased 6.4 percent in the EMEA region during the quarter, compared to last year’s second quarter. Through six months, dealers sold 145,391 new Harley-Davidson motorcycles worldwide, a 9.3 percent increase from the year-ago period, with retail unit sales up 12.0 percent in the U.S., 16.5 percent in the Asia Pacific region and 58.0 percent in the Latin America region and down 4.5 percent in the EMEA region. (Industry-wide U.S. heavyweight new motorcycle (651cc-plus) retail unit sales increased 7.9 percent in the first half of 2012 compared to last year’s first half)
“We’re pleased with the overall performance at retail during the first half, including continued growth in the second quarter,” said Wandell. “As expected, retail sales moderated in the second quarter due to an unusually warm early spring in the U.S. that pulled some sales forward into the first quarter. “We continue to remain cautious in our expectations for retail sales globally in an environment of greater economic uncertainty, including in Europe where sales are clearly being affected by the challenging Eurozone economy,” Wandell said.
Because sales were particularly weak in Europe, where dealers sold just 14,639 motorcycles, 9% fewer than last year, H.O.G. stock was sharply down this Wednesday morning but recovered a little bit (-4%) this afternoon.
Six-Month Results: Through the first six months of 2012 the Company shipped 147,765 motorcycles to dealers and distributors, a 22.5 percent increase compared to the year-ago period. Revenue from motorcycles grew 20.6 percent to $2.22 billion through six months. First-half revenue from parts and accessories grew 10.7 percent to $464.6 million and revenue from general merchandise grew 10.5 percent to $149.7 million. Gross margin through six months was 35.9 percent and operating margin was 18.2 percent, compared to 34.1 percent and 14.4 percent respectively in last year’s first half.
Financial Services Segment Results
Guidance: Harley-Davidson continues to expect to ship 245,000 to 250,000 motorcycles to dealers and distributors worldwide in 2012, a five-to seven-percent increase from 2011. In the third quarter of 2012, the Company expects to ship 51,000 to 56,000 motorcycles, a decrease of 9.3 percent to 17.4 percent from the year-ago period. This is consistent with the Company’s previously announced plans for lower shipments in the third and fourth quarters of 2012 related to the implementation of ERP and surge production at York.