Harley-Davidson's sales drop in Q3, prompting cut in 2024 outlook

By Sana Pashankar  Harley-Davidson Inc.’s motorcycle shipments fell in the latest quarter on lower demand for its high-margin bikes, prompting a downward revision in its full-year forecast.  

The company on Thursday trimmed its 2024 outlook, projecting motorcycle revenue down 14 per cent to 16 per cent and operating profit margins between 7.5 per cent and 8.5 per cent. It had previously forecast a 5 per cent to 9 per cent decline in motorcycle revenue and a margin of 10.6 per cent to 11.6 per cent for the full year.

 

Chief Executive Officer Jochen Zeitz blamed high interest rates, along with broader uncertainty about the economy and politics for the weak results in the latest quarter, but said he was “optimistic” about the likelihood for better results in 2025.

 

 

“We are expecting further interest rate reductions and improved consumer confidence will provide the industry with a needed tailwind” next year, he said in a statement.

 

Shares of Harley fell 1.8 per cent to $33.51 as of 9:38 a.m. in New York. The stock is down about 9 per cent for the year. 

 

The Milwaukee-based manufacturer has been focusing on pricier, more profitable touring bike models and offering deals to offset elevated financing costs. But that appealed to fewer buyers in the latest quarter. 

 

Earnings per share for the three months ended Sept. 30 came to 91 cents, the company said, below the $1.38 of a year ago. That reflected lower volumes in most major markets, including a 10 per cent retail sales drop in North America. Motorcycle and related products came to $876 million in the third quarter, compared with an analyst consensus forecast of $938.2 million.

 

LiveWire, the company’s electric bike unit, posted a third-quarter operating loss of $26 million on sales of 99 motorcycles. It said sales of those battery-powered bikes are expected to range from 600 to 1,000 for the full year.

 

Harley’s earnings come after a relatively turbulent third quarter. 

 

The company said in July that it planed to cut dealer inventory by about 30 per cent in the second half of the year after facing allegations from a group of US dealerships that they were hurting dealer profits by shipping too many bikes during a slow period.

 

In August, the iconic motorcycle maker scaled back several diversity, equity and inclusion initiatives after attacks by a conservative activist. It also announced a recall of more than 40,000 bikes in September due to potential short-circuiting risks.