Harley-Davidson lowers full-year income forecast on weak demand, shares down 3%

Harley-Davidson reduce its annual income forecast as sticky inflation and excessive borrowing prices harm demand for the corporate’s bikes in North America, sending its shares down greater than 3% on Thursday.

Spending on big-ticket purchases has slipped, with shoppers cautious of depleting financial savings and rising bank card debt, dashing hopes of a restoration in demand for producers of leisure merchandise.

“We’ve labored diligently via the quarter to mitigate the affect of excessive rates of interest, and macroeconomic and political uncertainty, that proceed to place strain on our business and clients, particularly in our core markets,” Harley CEO Jochen Zeitz mentioned.

Harley’s retail gross sales in North America, its greatest market, fell 10%.

Amid a hunch in demand, the corporate targeted on promoting extra of its profitable Touring bike fashions serving to it beat third-quarter revenue estimates.

In July, Harley mentioned it will pare again bike shipments within the second half of this yr to carry them in step with retail gross sales. The corporate mentioned on Thursday it now expects full-year world shipments to be down 16% to 17%, in contrast with its prior forecast of down 7% to 10%. Harley additionally forecast annual retail gross sales to be down 6% to eight%. Beforehand it anticipated gross sales to be flat to up 3%.

“Given these continued tender retail developments, as anticipated HOG decreased its 2024 steering as soon as once more, although the magnitude was a bit better than we anticipated,” Raymond James analyst Joseph Altobello mentioned.

Harley reported a third-quarter revenue of 91 cents per share, in contrast with the common analyst estimate of 79 cents, in line with knowledge compiled by LSEG.

The corporate now expects 2024 income from bikes and associated merchandise to be down 14% to 16%, in contrast with its prior forecast of down 5% to 9%.