Harley-Davidson Spirals Down, Announces US Layoffs, Builds Factory in Thailand

Wolf Street ^ | 18 July 2017 | Wolf Richter

[Lorianne]

Shares of Harley-Davidson (HOG) dropped 10% in the morning after the company reported second-quarter earnings and were down nearly 6% at the end of the day. Almost everything was bad.

Retail sales by its dealers in the US fell 9.3% in Q2, compared to a year ago, to 49,668 motorcycles. They were “down more than we anticipated,” the company said. And with “soft sales across most markets,” sales by its dealers globally fell 6.7%.

“Industry new motorcycle sales deterioration continued,” the company said in its presentation, lamenting “weak industry sales on soft used bike prices.”

In addition to the industry woes, its market share in Q2 in the US dropped 1 percentage point to 48.5%. Shipments in the quarter fell 7.2% to 81,807 and are down 10.8% year to date.

The 30-day delinquency rate on its $7.5 billion in motorcycle loans outstanding rose to 3.25%, from 3.16% a year ago, and from 2.7% in Q2 2015. The annualized loss experience on those loans reached 1.71%, the highest for any second quarter since 2010.

Total revenues fell 5.6% to $1.58 billion. Net income fell 7.7% to $258.9 million. And despite blowing $163.2 million on share buybacks in the quarter to lower the share count and thus prop up earnings per share, earnings per share fell 4.5% to $1.48.

Its dealer inventory is bloated, so it offered incentives on its 2016 bikes to clear them out, and that didn’t help its 2017 models, but it said bravely that it is “targeting significantly lower year-end US dealer inventory.”

[newgeezer]

Wow.

And, with all the a**wipes texting and whatever else these days, it’s only getting worse.

I suppose it’ll get better only when autonomous cars are commonplace.

[DungeonMaster]

I suppose it’ll get better only when autonomous cars are commonplace.

Speaking of that I was pondering what autonomous cars will do to the airline industry. You can get terrorist treatment and pay quite a bit of money or you can just get in your can and be auto piloted 1000 miles with very little effort.