Harley-Davidson Q2 Sales Down 9.3% In US, 6.7% Worldwide. Profit Down. Cutting Again 2017 Shipping To Dealers Forecast.

This morning Tuesday July 18, Harley-Davidson, Inc. (HOG) announced that during 2nd quarter worldwide retail motorcycle sales were down 6.7 percent. Retail motorcycle sales in the U.S. were down 9.3 percent. Harley-Davidson’s international retail sales decreased 2.3 percent.

New retail motorcycle sales in the U.S. were down primarily driven by weak industry conditions. New retail sales internationally were also down but generally in-line with company expectations for the second quarter of 2017.

In a conference call with analysts, CEO Matt Levatich said workforce cutbacks would be announced today. No further details were immediately available.

Harley-Davidson is lowering full-year 2017 shipment and margin guidance, citing the U.S. industry challenges in the second quarter and the importance of the supply and demand balance for its premium brand. In the second quarter, profit declined, but topped market estimates, while revenues missed their view. In pre-market activity on the NYSE, Harley-Davidson shares were losing 6.5 percent to $48.62, then 11 percent at 10 am US EST.

Harley said its U.S. market share for the quarter was 48.5% in the heavyweight motorcycle category.

Harley-Davidson now expects to ship 241,000 to 246,000 motorcycles to dealers worldwide in 2017, which is down approximately 6 percent to 8 percent from 2016. The company had previously provided full-year shipment guidance of flat to down modestly in comparison to 2016. In the third quarter, the company expects to ship 39,000 to 44,000 motorcycles, which is down approximately 10 percent to 20 percent from 2016.

The company now expects full-year 2017 operating margin to be down approximately 1 percentage point compared to 2016. The company continues to expect 2017 capital expenditures to be $200 million to $220 million.

In its second quarter, Harley-Davidson’s net income was $258.9 million, down from last year’s $280.4 million. Earnings per share decreased 4.5 percent to $1.48 from $1.55 last year. Consolidated revenue was $1.77 billion, lower than $1.86 billion for the same period in 2016. Motorcycles and related products revenue declined to $1.58 billion from $1.67 billion a year ago largely due to lower motorcycle shipments.

35 Responses to “Harley-Davidson Q2 Sales Down 9.3% In US, 6.7% Worldwide. Profit Down. Cutting Again 2017 Shipping To Dealers Forecast.”

  1. 1 R Hammon Jul 18th, 2017 at 8:15 am

    H-D has succeed over the last couple of decades in converting their motorcycle dealerships into new car dealerships with motorcycles and clothing for sale instead of cars. Dealer fees, multiple add-ons to contracts and very pricey service have added up to a lot of people silently refusing to buy a bike in that type of environment. Sad!

  2. 2 Mark Jul 18th, 2017 at 8:37 am

    Language is a little loose here but I guess they are speaking only of HD sales when they say “motorcycle sales.”

    So how does this compare with sales of BMW, Ducati, KTM, Triumph and the Japanese companies? General malaise, or is HD slump atypical of market.

    Since sales season is pretty much passed, maybe you could work up a complete industry analysis, Cyril?

  3. 3 GrowUp Jul 18th, 2017 at 8:43 am

    Motorcycle sales across the entire spectrum are down . Way down . With most manufactures suffering far worse losses than the Company ( WSJ Bloomberg MSNBC Financial etc ) Heck even NPR who normally ignores such news is reporting the major drop in M/C sales . But ; The is when all tallied the Company’s losses pale in comparison to the rest of the industry with the sole exception of BMW Motorrad who for the most part seem to be holding their own . Ducati someone asked ? Suffice it to say things are bad enough for mega giant VW-Audi to be dumping Ducati at Firesale prices

  4. 4 P. Hamilton Jul 18th, 2017 at 9:14 am

    Beginning of the big slide (2/3 years) until electric motorcycles and the HD LiveWire becomes a success.

  5. 5 HD Rider Jul 18th, 2017 at 9:14 am

    I figured that Harley Sales were down because everybody knew not to buy a first year new model from Harley. Instead wait for the design flaws to be exposed and addressed in the next year iteration. Although I must admit I haven’t heard anything bad about the Milwaukee Eight yet.

  6. 6 NineCloud Jul 18th, 2017 at 9:15 am

    Let’s compare to Polaris….

  7. 7 BobS Jul 18th, 2017 at 9:21 am

    Actually Ducati is on a roll of several strong years in sales. VW bought it low, now time to sell it high. Especially in light of VW’s other liabilities it makes perfect business sense to sell it now. In light of this and other recent conversations I can’t help but think if a striking comparison. H-D is in talks to buy Ducati per news released on this very blog. That would give the MoCo two brands, one with a few years of strong growth, while their older brand has been flat to moderate declines. HD has a relatively new CEO that hasn’t been a part of the company’s motorcycle history for that long, just like Polaris. Imagine Mark Levitich (sp) coming to the conclusion that Ducati was “the better horse to ride” by completely shutting down HD and releasing all future models as Ducatis. “Hey, it was a business decision. HD sales were in the toilet. Get over it.” Yeah, I don’t think so. Let’s hope Mark Levitich never makes as stupid a decision as Scott Wine did.
    As for what I really think HD’s future is? The market is showing lots of growth, but only in smaller, cheaper, fun oriented bikes. They can try to compete with the Street models but this just isn’t why guys walk into a Harley showroom. Harley will always mean big heavyweight cruisers. I think it’s going to be a generation before that market shows any significant growth again. Harley should make plans to be profitable and competitive selling 150-200k units a years for the foreseeable future.

  8. 8 GrowUp Jul 18th, 2017 at 9:58 am

    Actually BobS if you’d read the financial news you’d know Ducati has not shown so much as a dime of profit before or after VW-Audi’s purchase of the company with the reality being VW-Audi is planning on dumping Ducati at a serious loss .

    As for your comments about the industry as a whole all I can say is read the financial news not the Smoke & Mirrors coming from the industry . Suffice it to reiterate : M/C sales are down across the entire spectrum as well as across the globe regardless of size or price . Way down . e.g There is no ‘ growth’ at this point in time . Zero !

  9. 9 BobS Jul 18th, 2017 at 10:04 am

    Ducati has had seven strait years of sales growth and is returning a 7% net profit. Source: Financial news reports.
    Mic dropped.

  10. 10 kent Jul 18th, 2017 at 10:30 am

    Yep! you can blame this on Indian/ (Polaris) down and beat down!

  11. 11 SIGFREED Jul 18th, 2017 at 10:55 am

    The MoCo will have to bring back the FXR…

  12. 12 BobS Jul 18th, 2017 at 10:55 am

    Other brands performance:
    BMW…2016 sales up 6%, a sixth strait year of sales growth.
    Triump…After a record setting 2015, 2016 sales up 21%!
    KTM…2016 sales up 12%
    “Yeah but these are smaller European manufacturers. What about the big Japanese brand?” You may ask:
    Honda, largest motorcycle manufacturer in the world. FY 2017, sales UP 3.5%.
    So much for zero growth in any segment of the market.

  13. 13 Lyle Landstrom Jul 18th, 2017 at 11:26 am

    Royal Enfield is way up too. Perhaps nobody wants heavy underpowered overheating baggers anymore.

  14. 14 Xenu Jul 18th, 2017 at 11:32 am

    For years, I’ve ridden Ducati and BMW. My fellow riders of those makes are usually younger than me (64)
    but HD riders seem to mostly older farts.
    Selling nostalgia to kids is a crapshoot.

  15. 15 Marcus Jul 18th, 2017 at 12:21 pm

    HD’s perfect storm:

    1- Slowing heavyweight bike growth worldwide.

    2- A new engine model (I’ll wait for the bugs to be worked out of the M8).

    3- Expectation that the M8 engine will find its way into the softail and dyna soon. Again, I’ll wait to get the new engine in that dyna I was looking at.

    4- Aging boomers. Broke millenials.

    5- For anyone who wants a twincam there are a bajillion used bikes at the dealership, and online at some pretty good prices.

    The growing segment is in the smaller bikes. Ducati Scramblers, Triumph Bonnies et al, Indian Scout, Honda’s retro CB. All about $10-12k. Right in the sweet spot for millenials.

  16. 16 Nitschke Jul 18th, 2017 at 12:44 pm

    BobS where did you get your numbers? Did a quick look at BMW’s financials and there sales revenue on their motorcycle segment went up 4%. If numbers where true it would have to be a much poorer mix sales mix. Or may huge decrease is unit price. I couldn’t find Triumph’s financials as they are privately held.

  17. 17 JohnnySpeed Jul 18th, 2017 at 12:46 pm

    Marcus – I can agree with yoy right up until you call the Polaris Scout a smaller bike. Tha thing weighs alot. It’s cramped for anuone taller than 5’8″, but that’s due to the uncomfortable control layout. The bike itself isn’t small.

  18. 18 NineCloud Jul 18th, 2017 at 12:51 pm

    Only Harley can save Harley. Don’t expect anything from Liar In Chief Trump.

  19. 19 Dr. Rock Jul 18th, 2017 at 1:16 pm

    Matt, don’t you wish you still had Buell and the hundreds of millions you invested in the people, product and brand you yourself helped build when you launched it in Europe? I sure would

    Those who were there know there was a 450 MX, 250 and 650 coming from Erik’s Laboratory along with so much more! You get the Street instead. Can anyone say Cadillac Cimarron!!! Epitome of the Peter Principle there friends. Now more good people pay by losing their job. I will never support this company and the crap they shovel when all I see are US families being devastated because of their incompetence and the simple fact that they put money before people.

    Tell me again Matt, why doesn’t it say MADE IN USA on the side of the trucks anymore? That in itself is proof enough friends.

  20. 20 1550tc Jul 18th, 2017 at 2:13 pm

    Guys just buy Polaris stock………how many geezer glides can you sell ?? market is only so big!!! and you have what so many used 2000-08, 2009-2017 FL bikes to buy from the tired out rubbies and wanna bees riders

    I just wish you could factory order these HD like cars in the 70’s

    frame tires ect and everything to make it legal and with no paint, ship them in primer

    Polaris is like a rat and just nibbles away like they have been doing in other sectors of the recreation market.

  21. 21 1550tc Jul 18th, 2017 at 2:16 pm

    Hark is this true i think you posted this in the wrong place

    wow quite the stat and these are the guys with HD stamped on their foreheads 🙁

    Jul 18th, 2017 at 9:55 am
    This does not surprise me at all…losing 500 thousand HOG members over the past 5 years does not help.

  22. 22 BobS Jul 18th, 2017 at 3:27 pm

    Nitschke, revenue was up 4%, units sold was up 6%. I got those numbers from a site called Ultimate Motorcycling which was quoting BMW’s annual reports.

  23. 23 2Wheels Jul 18th, 2017 at 4:06 pm

    @JohnnySpeed, where do you get the impression the Indian Scout is a heavy bike? According to the websites it weighs 559 lbs in running order vs. Sportster 1200 Custom which weighs 587 lbs (28 lbs heavier and has ~30 HP less to move it…).

  24. 24 NoH2Oh Jul 18th, 2017 at 4:28 pm

    HD, hurry up and put the 8V in the Dyna/Softail. My local had a sweet 2003 LR I have my eye on…..will be a buyer’s market.

  25. 25 Roberto Jul 18th, 2017 at 9:21 pm

    I guess I’ll dump the Road King. 1 container of Indian ink,please hahaa.

  26. 26 nicker Jul 18th, 2017 at 10:55 pm

    At some point the boomer trend will peek. Coupled with the increasingly poor driving abilities of the general public will be making riding far more dangerous than ever before. Couple that with cell-phone distractions, unpredictable riderless cars, and legalized recreational drugs and you have the “perfect storm” for the MC industry….. 🙁


  27. 27 The Judge Jul 18th, 2017 at 11:18 pm

    Harley went for the gold wing and bmw market with the mail slot bagger- left tradition behind -Indian picked up and now rules the nostalgia market… Harley might want to bring back a bike that actually looks like a cool old bike – like the original Road King or mid 90’s ultra glide – ditch that damn fat back tire…

  28. 28 Charles from MA Jul 19th, 2017 at 9:18 am

    nicker, I think you meant driverless cars, not riderless. Except for that error, I think you are spot on. It seems like the world is changing without regard to motorcycle riders. Drugs, driverless cars, cell phones, nobody seems to give a shit about us.

  29. 29 Kansas Jul 19th, 2017 at 9:38 am

    I bought a 2017 Road Glide Special. I wanted one but my home dealership was business as usual and offered me a crappy trade in for my 2012 FXD. I gave up and decided to just continue to ride my old bike. Six weeks later I stopped at another dealership to look at shirts and they corralled me. They kept going down in price until they hit the number I originally thought was worth it for me. It was $2500.00 less than my home dealer. Figure in tax and a lot of dollars were involved for a toy. The second dealership sold me the bike. I think sales have been hurt by dealerships used to taking a cavalier attitude. There are a lot of other options out there for the buyer, including not buying, other brands, etc. Also, Harley should have had this new model with the M8 motor a few years ago. Your lose momentum in sales and it is tough regaining it. Later – I’m off to the Kansas Flint Hills on my new Harley.

  30. 30 takehikes Jul 19th, 2017 at 10:14 am

    Only any idiot couldn’t see this coming. Biggest indicator is merchandise sales were down 21% in Q1 and 17% Q2. Only 5 % of their sales but if you can’t move the t-shirts and do-rags then you got no chance of moving overpriced pigs. I mean hogs. Before you flame me I’ve owned a few and worked on plenty so I know what I’m talking about.

  31. 31 BobS Jul 19th, 2017 at 3:24 pm

    I would feel a WHOLE lot safer riding a motorcycle while sharing the road with driverless cars than I do now with stupid humans behind the wheel. At least the computer driving the car always looks both ways and is never distracted with its cell phone, never drives drunk, never thinks the rules don’t apply to it, etc.

  32. 32 cwrider Jul 19th, 2017 at 11:21 pm

    Summary of 2017 Q1:
    Indian Motorcycle® retail up 11% with ongoing share gains Victory up over 60%; Slingshot weakness continues

  33. 33 peet Jul 20th, 2017 at 12:58 am

    so charles and nicker<
    you want to maintain the war on mj jailing "recreational" consumers?

  34. 34 Hillbilly Jim Jul 20th, 2017 at 8:32 am

    They said profits are down 9% not nonexistent. I know a multi marque dealer that has Asian and European motorcycles 4 years old that have never been titled and you don’t see their doors closing. So don’t panic or laugh too gleefully which ever the case may be, The MoCo ain’t going nowhere.

  35. 35 Mdkuder Jul 21st, 2017 at 8:24 am

    Profits are down but they are still huge profits!

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Cyril Huze