Can Coronavirus Help Romanticize Harley-Davidson Again?

by Andria Cheng from For Harley-Davidson HOG -3.5%, the coronavirus initially led to production and dealership shutdowns and lower sales, but the pandemic could very well also help the iconic American motorcycle label—struggling with five straight years of declining U.S. sales—regain its cool factor. Credit that to the new social-distancing penchant that has driven increased demand for different outdoor pursuits from biking to running. A case in point, Commerce Department reported on Thursday sporting goods and other hobby retailers posted a 21% jump in June retail sales from a year earlier, a rare bright spot among retailers that sell non-essential items. In another example, April U.S. sales of bicycles topped $1 billion, a record level, about double the average for the month, according to NPD Group. “The ‘outdoor play’ seems to have made its way to Harley-Davidson in terms of increased demand,” said Wedbush analyst James Hardiman in a report on Thursday. He upgraded his rating on the Milwaukee company to outperform from neutral. He wasn’t alone. His counterparts at UBS and BMO also upgraded the stock this week, following some others recently. The stock has doubled since reaching a multi-year low of about $15 in March. “Perhaps the positive by-product of this terrible pandemic is a renewed interest in the open road,” BMO analyst Gerrick Johnson said Tuesday. Hardiman estimated the motorcycle maker’s June sales by units jumped in the low double-digits after declines of about 40% in April and at least 10% in May. Covid-19 also had dented the company’s first-quarter sales and profit it reported in April. Before that, Harley-Davidson’s sales in the U.S., its top market, declined for five straight years as the company faced an aging baby-boomer customer base with the sport having lost its traditional appeal, especially among younger millennial consumers. But the […]

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