Harley Davidson sales were off 12.8 percent in the first quarter, which is actually better than the heavyweight segment overall which was down 14 percent. No real surprises here, things are slow in most all retail sectors, in which case, larger discretionary purchases usually feel it a bit more. HD will reduce shipments this year with “temporary plant shutdowns and adjustments to daily production rates.” There will be a decrease of about 370 unionized employees over the next several months, plus the Company will be reducing the non-production workforce by about 360 jobs.
Press release below:
MILWAUKEE, April 17 — Harley-Davidson, Inc today announced its results for the first quarter ended March 30, 2008. Revenue for the quarter was $1.31 billion compared to $1.18 billion in the year-ago quarter, a 10.8 percent increase. Net income for the quarter was $187.6 million compared to $192.3 million, a decrease of 2.5 percent compared to the first quarter of 2007. First quarter diluted earnings per share (EPS) were $0.79, a 6.8 percent increase compared to last year’s $0.74.
“With growing weakness in the economy, U.S. retail sales of Harley-Davidson(R) motorcycles were down 12.8 percent in the first quarter. Although these retail results are disappointing, Harley-Davidson’s U.S. dealers outperformed the heavyweight motorcycle industry, which was down 14.0 percent,” said Jim Ziemer, Chief Executive Officer of Harley-Davidson, Inc.
“We’ve said on a number of occasions that we would closely monitor the retail environment and regularly assess our wholesale shipment plans, and we remain committed to shipping fewer Harley-Davidson motorcycles to our worldwide dealer network than we expect they will sell this year. In view of U.S. retail trends and uncertainty about the future of the economy, we now plan to ship 23,000 to 27,000 fewer Harley-Davidson motorcycles in 2008 than we shipped in 2007, resulting in total planned 2008 shipments between 303,500 and 307,500 units,” Ziemer said.
“We will achieve the shipment reduction through temporary plant shutdowns and adjustments to daily production rates. This will result in a decrease of about 370 unionized employees over the next several months. Our management group and union leaders will work together to implement this reduction.”
“The Company will also be reducing the non-production workforce by about 360 jobs. We believe these actions will better position the Company for a business environment that we expect to continue to be challenging,” Ziemer said.
“Harley-Davidson is fortunate to be dealing with the current economic environment from a position of financial strength. We are a great company with an exceptionally powerful brand. We are optimistic about our long term business prospects and we will continue to invest in marketing, product development and our international business to drive future growth.”
“For 2008, the Company now expects earnings per share to decrease between 15 and 20 percent compared to 2007 resulting in expected earnings per share of $3.00 to $3.18,” said Ziemer. This supersedes all previous guidance on earnings per share and other measures.
The Company expects to ship between 76,000 and 80,000 Harley-Davidson motorcycles in the second quarter of 2008.
Richard says
Given the current economic environment, they still plan to ship 80,000 bikes in the second quarter? Most HD bikes are not real gas savers, and they are very expensive, so I wonder who they think is going to buy them.
justpete says
No kidding Richard, They wonder why they do not sell as much. Well, when your local dealer slap’s on another 2-to-3 thousand bucks to the price and (like my local dealer, Black Hills Harley) throw on a bunch of custom H-D parts and add another 1-to-3 thousand on top of it all. It tends to fall on the side of ridiculous.And like Rich said, the economy doesnt help either. It surely will not justify spending $15k to $30k on a motorcycle just for the name.
Golly Gee says
Agree with both of you. Just saw somewhere 1 out of 10 people in Ohio are now on food stamps. So a lot of them probably aren’t shopping for new Harleys.
At the same time, Harley (the corporation) has been riding a winning streak that couldn’t last forever. Saw somewhere — maybe here — that the average age of a new Harley buyer is nearly 50 and creeping upward every year. That’s by definition a disappearing market. On top of this, expensive motorcycles have been “in,” so people with the kind of money to buy what they wanted, suddenly wanted big-bucks bikes. The Evo engine came along at the right time and meant these folks could ride a Harley and not get their hands dirty. Trends come and go. From the Harleys (and Ducatis) on eBay and Craigslist, I’d say this trend is about over.
Hard times have just hurried things along.
hoyt says
I’m waiting for an American sport tourer. Does HD see the gaping hole in that category? In 15 years that category should be large enough to garner attention from the OEMs (similar to how BMW sees the sportbike market now).
Do other readers think that the sport tourer genre is going to be the next big category?….
The current crop of hundreds of thousands of 20-35 year olds riding sportbikes will likely want something different in 15-20 years. I could be wrong, but HD may not have as big of a sales surge that the baby boomers fueled in the early 90s. Those baby boomers, who found themselves with their kids gone and some extra cash, wanted something similar to the bikes they rode when they were in their 20s: the Panheads, Shovels, and Knuckles. Will the current sportbike rider gravitate to a cruiser or a sport tourer?
Anyway, it is kind of baffling why HD & Buell have not co-branded a capable sport tourer by now.
Or, brand it entirely as a HD, but tap into the Buell handling angle.
There seems to be a lot of market space for a stylish two-up sport twin along these lines:
http://picasaweb.google.com/bigtwinsportbike/VincentSportTourer
The new Indian company should also be thinking of a sport tourer…it could play into their performance heritage.
B.Case says
Shhhh…Doug, don’t tell everyone!
ROHORN says
“Adventure tourer” (dirt bagger?) is one niche they are doing now:
http://thekneeslider.com/archives/2008/01/21/2008-buell-ulysses-xb12xt/
My guess is that they won’t do the S3T style sport tourer again. The StreetRod did poorly enough not to “tourify” something like that, either. Lots of more functional (really!) FXR/FXD variants have come and gone.
Ducati dumped their sport-tourers as well. Those used to be BMW’s primary niche, but they are looking elsewhere.
Considering the size, weight, and popularity of Kawasaki’s and Yamaha’s big sport tourers (forgot the latest alphanumeric strings), I cant help but wonder how a V-Rod powered purpose designed S-T would do. Or big 3 cylinder Rotax, if Buell isn’t taking that road anymore.
hoyt says
Bob – good points. They also point to the fact that it is time for HD or some other American company to step up.
It will be interesting to see what happens with the current rider – fast forward to 20 years hence….
a cruiser or a sport tourer?
Buell will be HD’s saving grace if the market swings to the sport tourer segment more than the cruiser.
The prime time to buy Buell may have passed. In some respects that is a shame, because an American company with deep pockets and courage, could have really taken them further, faster. No offense to the HD faithful & employees that read this fine site. I’m just tired of not having a mass produced performance motorcycle from the States. Its bullshit. BMW – good going.
ROHORN says
When do we file the IPO?
hoyt says
As soon as you’re ready 🙂
Seriously – Within the moto world, it would be difficult to argue against the notion that companies don’t want to compete in the performance category. Most engineers have that desire at some point in their career.
Look at the early days of the HD/Indian rivalry. It was all about who was faster.
All I am saying is the performance drive seems to be lost at HD, especially if it were not for Buell (who is still dissed by so many “faithful”).
How many HD models are based on the same platform, selling to the same type of buyer or riding style? Not good when the market fluctuates and generation tastes change. I’m not suggesting to replace the entire line of excellent, cool models. Some of the HD faithful have a strange sense that if HD adds a certain model to the lineup, then that will begin to dilute the brand. Thankfully, GM doesn’t think that way because then we wouldn’t even have a performance car built in this country.
Awhile ago the magazines reported HD hired a talented new Manager to take the VR1000 racebike program to the next level…many readers, riders, & moto journalists had a lot of hope in that news. The next thing we know, HD scrapped the whole deal. Maybe that old news wasn’t the real story
hoyt says
correction to: “Seriously – Within the moto world, it would be difficult to argue against the notion that companies don’t want to compete in the performance category.”
meant to say, “within the moto world (especially motorcycles), it would be difficult to argue that companies do not want to compete in the peformance category.”