Harley Davidson disappoints with worse-than expected Q4 results

Harley DavidsonHarley-Davidson Inc reported lower-than expected adjusted profit (excluding restructuring and tariff costs) of $0.17 per share in the fourth quarter. Analysts surveyed by Refinitiv, on average, expected adjusted profit of $0.28 per share.

Earnings per share on a GAAP basis were zero in the fourth quarter.

Net income in the fourth quarter was $0.5 million on consolidated revenue of $1.15 billion compared to net income of $8.3 million on consolidated revenue of $1.23 billion in 2017.

U.S. retail sales fell 10.1 percent in the fourth quarter, the eighth consecutive quarterly drop.

The company has had trouble attracting younger riders as its core customers are growing older.

To offset challenges in the domestic market, Harley has been trying to grow sales in other countries and plans to offer cheaper bikes and sell more clothing and gear. 

However, sales in foreign markets dropped 2.6 percent in the fourth quarter compared to the year-ago period.

Matt Levatich, president and chief executive officer, Harley-Davidson, Inc., said in a statement:

“The challenges we experienced during the year reinforced the commitment we have for our More Roads to Harley-Davidson accelerated plan for growth.

”Our plan addresses the challenges of today and the opportunities we see for growth ahead, and we are energized by the momentum we are building. New and different people, riders and non-riders, are taking notice of Harley-Davidson and the thrill of riding.”

2019 guidance

Harley expects motorcycle shipments to be approximately 217,000 to 222,000 motorcycles globally this year, which would be its lowest in eight years. In the first quarter, Harley expects to ship approximately 53,000 to 58,000 motorcycles.

According to research firm Consensus Metrix, analysts were expecting 2019 shipments of 228,190 motorcycles. 

Shares in the company plunged by as much as 9.5 percent to $33.83 as of 9:48 AM in New York.