Kannaki Deca
(Reuters) – Harley-Davidson on Thursday reported a 23% drop in first-quarter profit, hurt by slowing motorcycle sales as high borrowing costs deter potential buyers from making big-ticket purchases, sending the company’s shares down 18% in the second quarter. half a day.
The company also reiterated its forecast for full-year revenue growth to be flat to a decline of 9% for its motorcycle business, with operating profit margins of 12.6% to 13.6%, the top end of which is in line with the prior year.
“We’re really just entering the riding season… and a lot depends on the second quarter, so we haven’t changed our guidance at this time,” Harley-Davidson (NYSE:) CEO Jochen Seitz said. call with analysts.
Despite Harley’s attempt to bolster its offerings with electric and low-cost options, the 120-year-old motorcycle maker hasn’t had much success attracting younger generations, forcing it to rely on its proven boomer customer base. to stimulate sales.
Motorcycle retail sales in North America grew 6% in the first quarter, driven by sales of new Touring motorcycles. But that figure was below Raymond James analyst Joe Altobello’s estimate of 9%.
“Given growing pressure on consumer spending, we believe HOG’s flat outlook, despite a significantly better-than-expected first quarter, reflects caution about motorcycle sales and earnings for the remainder of the year,” said CFRA analyst Garrett Nelson.
Sales in the EMEA region fell 11% due to weakness in Germany and France, while sales in the APAC region fell 12% due to weakness in China.
remove advertising
.
The company reported adjusted earnings of $1.72 per share for the first quarter, above analysts’ average expectations of $1.51 per share, according to LSEG data.
Revenue for the quarter fell 5% to $1.48 billion, beating estimates of $1.34 billion.