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.