Harley-Davidson (NYSE:HOG) shares tumbled more than 10% after the motorcycle maker’s third-quarter sales and profits missed Wall Street estimates.
Higher interest rates and inflationary pressures continue to force consumers to cut back on big-ticket discretionary purchases like motorcycles.
Harley-Davidson (NYSE:HOG)'s motorcycle and other product revenues fell 9% year-over-year to $1.3 billion in 3Q, below estimates of $1.36 billion.
Earnings per share (EPS) tumbled 24% from the year-ago quarter, falling from $1.78 to $1.38. Analysts had expected EPS of $1.39.
Global Harley-Davidson (NYSE:HOG) motorcycle sales fell 16%, led by a 24% drop in the Asia Pacific driven by weaker-than-expected demand in China.
The company’s North American sales, which declined 15% year-over-year, were impacted by both the high-interest rate environment and the discontinuation of the legacy Sportster in 2022, the company said.
Third-quarter global motorcycle shipments decreased 20% over the same period in 2022 which the company attributed to a production suspension announced in the late second quarter, inventory management, and market conditions.
Harley-Davidson (NYSE:HOG) CEO Jochen Zeitz said on the company’s earnings call that “it is clear that the macroeconomic backdrop has been a challenge for our customers globally,” pointing to “inflationary pressure creating affordably challenges and higher interest rates.”
The company also confirmed its full-year 2023 outlook, continuing to expect revenue growth from its motorcycle segment of flat to 3% and an operating income margin of 13.9% to 14.3%.
For Harley-Davidson (NYSE:HOG) Financial Services, its group that provides motorcycle financing and insurance products and services, it still expects a decline in operating income of 20% to 25%.
Harley-Davidson shares traded down 10.5% at US$25.81 in early trade on Thursday.
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