Harley-Davidson reports lower profit in Q2

U.S. industry weaker than expected

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Milwaukee-based Harley-Davidson Inc. today reported lower profit on higher revenue for the second quarter.

Harley-Davidson headquarters
Harley-Davidson Inc.’s headquarters in Milwaukee.

Harley’s second quarter net income was $280.4 million, or $1.55 per diluted share, down from $299.8 million, or $1.44 per share, in the second quarter of 2015.

Operating income was $412.3 million, down from $462.5 million in the same period last year.

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Revenue was $1.9 billion, up from $1.8 billion in the year-ago quarter.

Retail sales were down in the Americas region, as well as the Asia Pacific region. Retail sales were up in the Europe, Middle East and Africa region. Total worldwide retail sales were 87,266, down from 88,931 in the second quarter of 2015.

U.S. retail motorcycle sales were down 5.2 percent year-over-year.

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The U.S. industry was far weaker than Harley expected during the second quarter, said Matt Levatich, president and chief executive officer of Harley-Davidson.

Harley-Davidson's Dark Custom Roadster.
Harley-Davidson’s Dark Custom Roadster.

“We expected the industry to be down in the first half of the year as we lacked industry growth in 2015 that was stimulated by the shift in currency and the resulting competitive discounting, and as we also expected, by continued weakness in the oil dependent areas,” Levatich said in a call with analysts this morning. “We did not, however, expect the industry to be as soft as it is.”

The company now plans to ship fewer motorcycles for the year, he said. But the company was pleased to see growth in the young adult market and continues to focus on growing ridership in the U.S.

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“While our investments to grow product awareness and ridership globally are beginning to take hold in a number of markets, current conditions in the U.S. and economic headwinds in other parts of the world combine to raise caution for us as we continue to focus our strategy to drive demand and deliver strong returns to shareholders,” Levatich said.

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