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Harley-Davidson beats forecasts as international sales rebound

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by Rachit Vats, Ankit Ajmera from https://www.reuters.com (Reuters) – Harley-Davidson Inc (HOG.N) beat expectations for profit on Tuesday and stuck to its full-year shipment forecast, allaying fears of another major hit from European import tariffs and a further slump in sales in its main U.S. market. Shares of the company rose as much as 8.8% to $40.36, as it posted the first rise in international sales in a year during the third quarter and a 3.6% dip in U.S. retail motorcycle sales – the smallest decline in nearly three years. Profits continued to sink – by 24% – but the results offered some hope that one of the biggest names in motorcycles was finally beginning to arrest a slide in global sales that it has been fighting for years. Sales in the world’s biggest motorcycle markets in Asia, which Harley has targeted with smaller bikes that go against its traditional profile, rose 8.7% in the quarter and are up about 1.6% this year overall. The company plans to source half of its revenue from overseas by 2027 and international retail sales rose 2.7% to 23,619 motorcycle in the quarter. While worldwide shipments fell 5.8% to 45,837 motorcycles, they topped analysts’ estimates by over 1,000 motorcycles, and the Milwaukee, Wisconsin-based company stuck to its 2019 shipment target of 212,000 to 217,000 bikes. “As we look to the remainder of 2019, we are encouraged by the momentum of retail sales trends through the first nine months of this year but also recognize substantial headwinds that we continue to face,” Chief Financial Officer John Olin said. The company is also cutting spending and said it now expects 2019 capital expenses of $205 million to $225 million, about $20 million less than its previous estimates. Excluding items, the company earned 70 cents per share, […]

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Harley-Davidson Acquires Company That Makes Electric Bikes for Kids

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Harley-Davidson is trying to attract a new generation of riders at a very young age. The iconic motorcycle company announced Tuesday that it was buying StaCyc, which makes two-wheel electric bikes for kids. StaCyc has two models — the 12eDrive and 16eDrive — that the company describes as “the perfect choice for little rippers” between the ages of 3 and 7. The bikes have a top speed of about 10 miles per hour and sell for a range of $649 to $699. Harley-Davidson said in a statement that Harley-Davidson branded versions of StaCyc’s two models will be available at select Harley-Davidson dealers in the United States in the third quarter of 2019. “The StaCyc team shares the same vision we have for building the next generation of riders globally and we believe that together, we will have a significant impact in bringing the fun and enjoyment of riding to kids everywhere,” said Heather Malenshek, Harley-Davidson senior vice president of marketing and brand, in the statement. Harley-Davidson is increasing its bets on electric vehicles as sales of traditional bikes slow. The company has already announced plans to launch the LiveWire premium electric motorcycle this fall. It is also developing other electric bikes that it plans to start selling in 2021. Harley-Davidson needs new growth opportunities as the company struggles to deal with tariffs from the Trump administration that have hurt earnings. Sales and profits are expected to fall this year and revenue is only expected to rebound slightly in 2020. Shares of Harley-Davidson have rallied this year with the rest of the market, rising 10% so far in 2019. But the stock is trading nearly 20% below its 52-week high.

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No silver bullet in sight for Enfield hit by sliding volume

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The Eicher Motors stock fell 30 per cent in the past year. The Bullet, it appears, is just not firing on all cylinders at the moment. Royal Enfield (RE) sales are rather soft, and state-wise volume statistics furnished by industry body SIAM show that the bike that defines panache for motorcycle enthusiasts in India is riding through a rather rough patch. Eight states that make up three of every five RE bikes sold locally have reported deceleration. Maharashtra and Karnataka together account for 13 per cent of RE volumes, and these two states have seen a drop in 6-7 quarters of the past nine. Kerala, the largest market of RE, has witnessed volume drops of 13 per cent and 23 per cent in the September and December quarters, respectively. The September decline is attributed to floods. But declines in the December quarter have put the lens on underlying demand. Industry volume growth of twowheelers in south India was 9.5 per cent in the first nine months, up from 5.6 per cent in the previous year. However, RE’s sales volume growth in the Southern states has been underwhelming. The RE management has given production guidance of 8.7-8.8 lakh units for the current fiscal year. However, it is unlikely to be met. Average monthly run-rate of RE in the first 11months of FY19 stood at 69,569 units. To achieve the stated guidance, the company needs to produce 1.04 lakh vehicles in March. This appears to be quite a daunting task given the weak demand cycle. The Street is factoring in volume growth of 10 per cent for FY20, which could be trimmed due to about 3 per cent growth in FY19. The Eicher Motors stock fell 30 per cent in the past year following constant negative surprises on the volume front. The

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