Harley-Davidson announced Q1 figures which saw its US based unit sales (c 50% of group) fall 12% with global sales down 7.2% YoY. H-D is often regarded as a canary in the coal mine for discretionary spending. 30 day delinquencies continue to rise in Q1 2018 @ 3.31% the highest in 6 years. Harley wrote,
“The U.S. 601+cc industry was down 11.1 percent in the first quarter compared to 2017. Harley-Davidson’s first quarter market share was 50.4 percent in the U.S. The 601+cc industry in Europe was down 7.3 percent in the first quarter compared to 2017. Harley-Davidson’s first quarter market share was up 1.3 percentage points to 10.4 percent in Europe.”
Revenue up 2.7% despite 9.7% lower shipments
Gross margin 34.7%, down 1.0 pt.
Restructuring charge of $46.8 million
Operating margin of 12.7%, down 5.1 pts.
Harley reported 243,000 units in 2017 (-6.7% on 2016) and it is shooting for mid 230,000s for 2018. This despite some stunning new models. The problem with a divine franchise is that complacency kills. The competition is much fiercer and the prices of its bikes are for the better heeled who seem to be cooling them