This morning before the opening bell, Harley-Davidson reported its second quarter 2015 earnings results. Results are in line with company lower expectations following Harley-Davidson’s decision in April to lower motorcycle shipments from initial projections for 2015 in light of currency-driven competitive pressures in the U.S. and the company’s commitment to manage supply in line with demand.
Harley-Davidson Inc.’s stock HOG surged 2.8% in premarket trade this Tuesday July 21, 2015, after the motorcycle maker beat Wall Street profit and sales expectations. (The stock had tumbled 17% year to date through Monday, while the S&P 500 had gained 3.4%)
Harley-Davidson, Inc. (NYSE: HOG) second-quarter 2015 diluted earnings per share were $1.44 compared to EPS of $1.62 in the year-ago period. Second-quarter net income was $299.8 million on consolidated revenue of $1.82 billion compared to net income of $354.2 million on consolidated revenue of $2.00 billion in the year-ago period. Second-quarter results are in line with company expectations following Harley-Davidson’s decision in April to lower motorcycle shipments from initial projections for 2015 in light of currency-driven competitive pressures in the U.S. and the company’s commitment to manage supply in line with demand.
Dealer new motorcycle sales were down 1.4 percent worldwide for the second quarter compared to the year-ago period, but gained momentum as the quarter progressed.
“In the face of a tough competitive environment, driven mostly by currency and greater competitive activity, we are leveraging our many strengths and meeting the challenge head on,” said Matt Levatich, President and Chief Executive Officer, Harley-Davidson, Inc. “Our actions during the quarter have had a positive impact. We are encouraged by the momentum at retail as the quarter progressed, both in the U.S. and internationally.”
“We are confident in the strength of our business and the strategies we have in place to maintain our industry leadership and grow our business over the long term,” said Levatich. “Our singular focus on the customer through unrivaled products, unique experiences and our expanding dealer network is the bedrock we are building on to continue to grow our reach and impact with customers across the globe.”
Retail Harley-Davidson Motorcycle Sales.
Dealers worldwide sold 88,931 new Harley-Davidson® motorcycles in the second quarter of 2015 compared to 90,218 motorcycles in the year-ago quarter. In the U.S., dealers sold 57,790 new Harley-Davidson motorcycles in the quarter compared to sales of 58,225 motorcycles in the year-ago period.
In international markets, dealers sold 31,141 new Harley-Davidson motorcycles during the second quarter compared to 31,993 motorcycles in the year-ago period, with sales up 16.6 percent in the Asia Pacific region and down 8.9 percent in the EMEA region, 2.6 percent in the Latin America region and 9.9 percent in Canada.
Harley-Davidson Motorcycles and Related Products Segment Results
Operating income from motorcycles and related products (the “motorcycles segment”) decreased 19.6 percent to $380.6 million during the quarter compared to operating income of $473.3 million in the year-ago period. Operating income in the quarter was impacted primarily by lower motorcycle shipments and unfavorable foreign currency exchange.
Second-quarter revenue from motorcycles decreased 11.6 percent to $1.31 billion compared to revenue of $1.48 billion in the year-ago period. The company shipped 85,172 motorcycles to dealers and distributors worldwide during the quarter compared to shipments of 92,217 motorcycles in the year-ago period, in line with guidance.
Revenue from motorcycle parts and accessories was $256.8 million during the quarter, down 5.4 percent, and revenue from general merchandise, which includes MotorClothes® apparel and accessories, was $77.5 million, up 1.5 percent compared to the year-ago period.
Gross margin was 39.2 percent in the second quarter of 2015 compared to 39.5 percent in the second quarter of 2014. Second-quarter operating margin for the motorcycles segment was 23.1 percent compared to operating margin of 25.8 percent in last year’s second quarter.
Year-to-date in 2015, dealers sold 145,592 new Harley-Davidson motorcycles worldwide compared to 147,633 motorcycles in the year-ago period, with retail unit sales down 0.7 percent in the U.S., up 7.8 percent in the Asia Pacific region, and down 7.7 percent in the EMEA region, 1.2 percent in the Latin America region and 4.8 percent in Canada compared to the year-ago period.
Through six months, the company shipped 164,761 motorcycles to dealers and distributors worldwide, a 4.7 percent decrease compared to the year-ago period. Six-month revenue from motorcycles was down 8.0 percent to $2.56 billion, revenue from parts and accessories decreased 6.2 percent to $440.7 million and revenue from general merchandise increased 2.5 percent to $143.9 million compared to the first six months of 2014. Gross margin through six months was 39.1 percent, and operating margin was 23.0 percent compared to 38.6 percent and 24.1 percent respectively in the year-ago period. Continue reading ‘Harley-Davidson Second Quarter 2015 Earnings Results. Still Affected By Currency-Driven Competitive Pressures. Beat Wall Street Expectations.’