Harley-Davidson 1st Quarter Results Beat Estimates On Higher Shipments And Cost Cuts.

cyril-huze-harley-stockFirst-quarter 2014 diluted earnings per share of $1.21 grew 22.2% from the year-ago period on higher motorcycle shipments and continued improvement in operating efficiencies. First-quarter net income was $265.9 million on consolidated revenue of $1.73 billion, compared to net income of $224.1 million in the year-ago period on consolidated revenue of $1.57 billion.

“Harley-Davidson delivered gains on many fronts in the first quarter, with shipments up 7.3%, strong margin improvement and solid growth in dealer new motorcycle sales,” said Keith Wandell, Chairman, President and Chief Executive Officer of Harley-Davidson, Inc.

“Thanks to the great contributions of our employees, dealers and suppliers, we continue to lead at delivering exceptional customer experiences in 89 countries,” said Wandell. “Our Project RUSHMORE motorcycles were in high demand in the quarter and we began shipping the Harley-Davidson Street™ 750 and 500 into select markets. These motorcycles, together with continuous improvement in our operations at every level, underscore the momentum we’ve established as a customer-led company.”

hdRetail Harley-Davidson Motorcycle Sales

Dealers worldwide sold 57,415 new Harley-Davidson® motorcycles in the first quarter of 2014 compared to 54,254 motorcycles in the year-ago quarter. In the U.S., dealers sold 35,730 new Harley-Davidson motorcycles in the quarter, up 3.0% compared to sales of 34,706 motorcycles in the year-ago period. In international markets, dealers sold 21,685 new Harley-Davidson motorcycles during the first quarter, up 10.9% compared to 19,548 motorcycles in the year-ago period, with sales up 20.5% in the Asia Pacific region, 8.2% in the EMEA region and 8.9% in the Latin America region, and down 2.4% in Canada.

“Our dealers had a solid quarter of retail motorcycle sales. Sales in the Asia Pacific region were up strongly, and we are encouraged by the continued growth of new Harley-Davidson motorcycle sales in Europe. We’re also excited to be entering the heart of the retail selling season in the U.S., having achieved first-quarter retail growth of 3.0% in the midst of a long, cold winter,” said Wandell.

According to Wandell, “there’s also great news for Harley-Davidson in the annual reporting of our demographic market share data.”

hdbisIn 2013, for the sixth consecutive year, Harley-Davidson was the number-one seller of new on-road motorcycles in the U.S., both 601 cc-plus and across all displacements, to young adults age 18-34, women, African-Americans and Hispanics (“outreach” customers) and Caucasian men age 35-plus (“core” customers), according to Polk 2013 U.S. new motorcycle registration data from IHS Automotive. The Company grew its U.S. market share and also increased its share gap to the nearest competitor in each of these segments, compared to 2012.

“Together with our dealers, we continued to expand the appeal of our products and the Harley-Davidson experience,” said Wandell. “Harley-Davidson dealers sold more than four times as many new, on-road motorcycles, 601cc and up, to U.S. young adults last year, and among riders age 35-plus, more than nine times as many to women, more than six times as many to African Americans and more than seven times as many to Hispanics, as the nearest competitor.”

According to Harley-Davidson’s internal data, retail sales of its motorcycles to U.S. outreach customers grew at more than twice the rate of sales growth to core customers in 2013 compared to 2012.

Harley-Davidson Motorcycles and Related Products Segment Results

First-quarter operating income from motorcycles and related products grew 25.6% to $347.7 million, compared to operating income of $276.8 million in the year-ago period. Operating income in the quarter benefited from higher motorcycle shipments and higher gross margin compared to the prior-year period.

Revenue from motorcycles grew 13.1% to $1.31 billion, compared to revenue of $1.15 billion in the year-ago period. The Company shipped 80,682 motorcycles to dealers and distributors worldwide during the quarter, in line with guidance and a 7.3% increase compared to shipments of 75,222 motorcycles in the year-ago period.

Revenue from motorcycle parts and accessories was $198.1 million during the quarter, up 7.7%, and revenue from general merchandise, which includes MotorClothes® apparel and accessories, was $64.1 million, down 11.1%, compared to the year-ago period.

Gross margin was 37.7% in the first quarter of 2014, compared to 36.7% in the first quarter of 2013. First-quarter operating margin from motorcycles and related products was 22.1%, compared to operating margin of 19.6% in last year’s first quarter.

Financial Services Segment Results

Operating income from financial services was $63.2 million in the first quarter of 2014, an 11.7% decrease compared to operating income of $71.5 million in last year’s first quarter. First-quarter financial services results reflect a higher provision for credit losses.

Guidance

Harley-Davidson continues to expect to ship 279,000 to 284,000 motorcycles to dealers and distributors worldwide in 2014, an approximate 7% to 9% increase from 2013. In the second quarter of 2014, the Company expects to ship 92,000 to 97,000 motorcycles, up from shipments of 84,606 motorcycles in the year-ago period. The Company continues to expect full-year 2014 operating margin of 17.5% to 18.5% in the Motorcycles segment. The Company also continues to expect capital expenditures of $215 million to $235 million in 2014.

Zipper's

16 Responses to “Harley-Davidson 1st Quarter Results Beat Estimates On Higher Shipments And Cost Cuts.”


  1. 1 Rodent Apr 22nd, 2014 at 9:07 am

    Anybody got number of new Indians shipped?

  2. 2 Ray Apr 22nd, 2014 at 11:40 am

    Interesting to observe that when the news are positive, there are very few comments. But a lot of comments if there was any negative. Human nature demonstrated again…

  3. 3 Grant Apr 22nd, 2014 at 11:41 am

    Rodent. Cyril must know. Ask him.

  4. 4 P. Hamilton Apr 22nd, 2014 at 11:44 am

    Indian better off target the young adults age 18-34. Or Harley is going to preempt this promising market.

  5. 5 BobS Apr 22nd, 2014 at 1:14 pm

    Rodent, Grant, Indian and all of Polaris’ other divisions do not release sales figures. Deductive guesstimation is that Victory is selling around 20k bikes a year and 4th quarter Polaris reports showed a 94% increase in motorcycle revenue, which coincided with the release of the new Chiefs. So further deductive guesstimation says that Polaris is selling almost as many Indians as they are Victorys. Polaris releases this years 1st quarter earnings in a couple days, more guesstimation can be made then. Congrats to H-D on the good report.

  6. 6 Woody Apr 22nd, 2014 at 2:26 pm

    Always glad to see a US company doing well. Now if they could find a way to keep more of the sales income here in the US as well…

  7. 7 James just another Crazy Kiwi Apr 22nd, 2014 at 3:22 pm

    Looked at a very nice Dark blue Street Glide on Saturday.
    Very nice bike just cannot rationalise the 37K they cost over here.
    Still a very nice product and you can see why HD are doing well.
    We will only get the 500′ Mini Rods here it will be interesting to see if the younger crowd buy them.
    HD are looking many years ahead and that bodes well

  8. 8 toby Apr 22nd, 2014 at 4:06 pm

    Polaris’ bike unit sales will be public information. The dollar amount may not as they don’t break those number out, but the number of bikes will be available.

  9. 9 BobS Apr 22nd, 2014 at 7:32 pm

    The exact opposite of what toby said is the truth.

  10. 10 BigWave916 Apr 23rd, 2014 at 7:56 am

    In fact they won’t even tell you what part of motorcycle sales is Victory and what part is Indian, just total revenue from motorcycles sold. In the fourth quarter of 2013 they had revenue from motorcycle sales of about $69,000,000. I don’t know what the average price is to the dealer, but if you knew you could get an estimate of total motorcycles sold, but you still don’t know how many were Victory and how many were Indians. My guess for 1st quarter 2014 is 5,000 motorcycles and maybe 2,000 of them were Indians. Your guess is as good as mine.

  11. 11 BigWave916 Apr 23rd, 2014 at 7:58 am

    I still don’t see how Indians shipped has anything to do with H-D’s quarterly report. Indian versus Harley-Davidson seems to me to be a lot like an ant crawling up an elephant’s leg with rape on his mind.

  12. 12 Shifter Apr 23rd, 2014 at 8:03 am

    BigWave. Don’t guess, you are wrong. Since last October, Polaris sells more Indians than Victorys. My source are…i

  13. 13 BigWave916 Apr 23rd, 2014 at 8:13 am

    Really Shifter? “Don’t guess, you are wrong.” Bite me.
    Your unidentified source is no better than a guess.

  14. 14 Shifter Apr 23rd, 2014 at 8:47 am

    Bigwave. My source is a Polaris insider…Your numbers are at low tide.

  15. 15 BigWave916 Apr 23rd, 2014 at 9:38 am

    We were talking about 1st quarter, not since the first new Indian shipped. I’d still bet on Indian being between 2000 and 2500 in the months January through March.

    When the initial enthusiasm for the new Indian subsides, I believe they will sell more Victorys than Indians in any given month’/quarter/year. It seems to me that you are referring to total sales of Indians versus Victory combined since they started shipping (little more than last two quarters). As already stated, Polaris reports to shareholders only report revenue for motorcycles, not units, and they don’t differentiate between Indian and Victory, so I’ll take your insider’s word for it as long as we’re talking about the same thing. Regards.

  16. 16 BobS Apr 23rd, 2014 at 12:28 pm

    PII first quarter, 79 million in motorcycle sales, up 52% over 1st quarter 2013. My guess is that represents about 7000-8000 units.

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