Harley-Davidson is reporting its first-quarter results for 2019, and as you might expect, the Bar & Shield brand continues to sink with its worldwide sales figures. As such, Harley-Davidson saw sales decrease worldwide by 3.8% in Q1 2019, with US sales down 4.2% compared to the same time last year (international sales were down 3.3%).
This news continues a trend for Harley-Davidson, as it continues to see its sales figure moving downward, which is following the overall trend in the US motorcycle industry, where sales are down 4.7% in Q1 2019.
From a relative point of view, this news is perhaps not so bad for Harley-Davidson, as it outperformed the market (though it owns a considerable size of the relevant segments), and in the process of that, the American brand picked up marketshare in its home market
This is of course the business equivalent of escaping being eaten by lion, by merely out-running the person fleeing next to you.
Harley-Davidson Unit Sales by Region – Q1 2019:
The Harley-Davidson spin machine is of course out in full effect on today’s report, touting the brand’s ability to outperform Wall Street’s expectations. This has Harley-Davidson stock up 3% on today’s news, despite a motorcycle sales revenue drop of 14%, an operating income drop of 37.3%, and a gross margin drop of 5.6 points.
There is some good news in Harley-Davidson’s financials though, as its financing services business posted gains for Q1, with revenue up 5.9%, though the financing wing of Harley-Davidson still saw its operating income slip by 7.6%.
Of course, none of this news should surprise anyone, as Harley-Davidson continues to transform itself from a single-type motorcycle manufacturer that has been stuck in the early 1900s, into a modern-day OEM with a robust two-wheeled lineup.
As such, Harley-Davidson sees a near-future where 50% of its motorcycles will be sold abroad, and we can assume that non-US production facilities will help fuel that foreign growth.
While the US motorcycle industry continues to sound for bottom on the plummeting market conditions, Harley-Davidson has at least been vocal about its intentions to adapt to a new millennium of motorcycle, and a new generation of motorcyclists.
The company’s “More Roads to Harley-Davidson” is seeing an increased effort in engaging traditionally non-Harley riders, as well as people who have never before ridden a motorcycle.
The Bar & Shield brand has also been very obvious with its intentions to bring an electric motorcycle to market this year, the Harley-Davidson Livewire, along with a series of motorcycles in the next few years that will be outside of the company’s traditional fare of cruisers.
As such, it will be interesting to watch Harley-Davidson navigate these new waters, but surely there are a few more icebergs still to come on this bearing.