Harley-Davidson’s Q1 2015 sales reports are in, and the Bar & Shield brand is reporting a 1.3% drop in unit volume sales, despite posting a $4 million increase in net income over last year ($269.9 million in Q1 2015).
Equally surprising is that the increase in net income comes despite a $60 million decrease in revenue ($1.67 billion in Q1 2015), which Harley-Davidson attributes to the growing currency divide between the dollar and the euro.
Harley-Davidson is using the currency issue, which in theory drives up the cost of American products abroad and allows foreign producers to discount in the USA, as a reason to adjust its year-end sales forecast, which the company now pegs at 2% to 4%, rather than 4% to 6%.
That line of reasoning only works of course if brands take advantage of the currency exchange movements, and actually adjust their prices to match the strengthening of the dollar, which there has been little evidence of in the marketplace.
“While the first quarter had its share of headwinds, our business is strong and we remain clearly focused on executing Harley-Davidson’s strategy to be customer-led in everything we do, grow our reach among new customers in the U.S., grow internationally and continuously improve every aspect of our operations,” said CEO Keith Wandell. “We continue to manage Harley-Davidson for long-term performance from a position of great strength.”
Harley-Davidson’s worldwide sales are down 1.3% (56,661 new bikes sold in Q1 2015), but domestically the company is down only 0.7%, with US dealers selling 35,488 units. This means international sales were down 2.3%, as international markets sold 21,173 units in Q1 2015.
“Despite the current headwinds, we believe Harley-Davidson’s brand fundamentals remain strong,” said Wandell. “Our brand is among the most iconic in the world and our motorcycles continue to generate great interest.”
Harley-Davidson wrapped-up its sales assessment by boasting of its affinity with young American riders, women, and minority groups, as the Bar & Shield brand laid claim to being the #1 motorcycle seller to these demographics.
Of course, Harley-Davidson glossed over the fact that since it sells one of every two motorcycles in the US, so by sheer volume it should be leading these statistics, which in-turn makes them relatively meaningless in determining the company’s long-term security as a brand.
It should be noted that the second quarter of 2015 will be Keith Wandell’s last fiscal quarter at the helm of Harley-Davidson, as Matt Levatich will be taking over the roll of CEO starting May 1st.