Harley Davidson Has A USD92 Million Net Loss
Harley-Davidson has been seeing a slow global decline in sales since 2015, but is was still within manageable levels and profitable enough for the business to continue producing new products and expand its reach globally.
Due to Cobid-19, Harley-Davidson production was halted, so when dealers did reopen, inventory was well below normal. The Harley-Davidson factory in Thailand was closed during the month of April and the factory in York, Pennsylvania was also forced to close due to the pandemic.
By the end of the quarter, 93 per cent of Harley-Davidson dealers were open back for retail sales. With not all dealers having all the new bikes, sales of used motorcycles were strong at some dealerships with used-motorcycle prices at dealers up 6 percent and prices at auction up 10 per cent.
PRESS RELEASE: Jochen Zeitz, chairman, president and CEO of Harley-Davidson (NYSE: HOG), said he was pleased with the progress the company was making toward its goals of The Rewire and that the company was seeing positive feedback from key stakeholders and early impact in the marketplace.
“A total rewire is necessary to make Harley-Davidson a high-performance company,” Zeitz said in a press release. “Building on our strong brand legacy, we are reinvigorating our core profit driving business – powered by our strongest dealers, most exciting products and careful inventory management, while focusing on the most important opportunities for future expansion. We’re overhauling our operating model and our product plan and are rewiring our market structure and organization to focus on the strengths of our brand and company.”
For the second quarter, Harley-Davidson reported a net loss of USD92.2 million, or 60 cents per share, compared with net income of USD195.6 million, or USD1.23 per share for the same period a year ago. Excluding restructuring costs and the impact of incremental tariffs, the firm’s net loss was USD53.9 million, or 35 cents per share, for the second quarter.
The interruption in motorcycle production resulted in a 59 per cent drop in motorcycle shipments, to 28,369 from 68,757 a year ago, and a 27 per cent decline in motorcycle unit sales, to 52,712 from 71,846, during the quarter.
Total revenue for the second quarter dropped 53 per cent to USD669.3 million from USD1.43 billion a year ago.
Harley-Davidson’s efforts to “rewire” the company will result in a streamlining of its operations and a more focused motorcycle company centered on its top-selling products in key global markets.
To that end, Harley-Davidson said Tuesday it will sharply focus on about 50 markets primarily in North America, Europe and parts of Asia Pacific that represent the vast majority of the company’s volume and growth potential. It will exit international markets where volumes do not support continued investment.
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