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With Harley-Davidson Production, Sales Frozen, Argus Downshifts On Stock

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by Priya Nigam , Benzinga Staff Writer from https://www.benzinga.com

Although shares of Harley-Davidson Inc HOG 11.31% have significantly underperformed the S&P 500, the company has suspended production at most of its U.S. manufacturing facilities and shut its retail stores due to the coronavirus pandemic, according to Argus.

The Harley-Davidson Analyst David Coleman downgraded Harley-Davidson from Buy to Hold.

The Harley-Davidson Thesis

While Harley-Davidson’s stock has lost around 59% over the past three months versus a 24% decline for the S&P 500, recent developments have been particularly disappointing, Coleman said in the Monday downgrade note. (See his track record here.)

The motorcycle manufacturer has withdrawn its 2020 guidance.

Argus lowered its adjusted earnings estimates for 2020 and 2021 from $3.52 per share to $3.07 per share and from $3.68 per share to $3.41 per share, respectively.

Harley-Davidson had witnessed a marginal improvement in sales in the fourth quarter, raising expectations of its strategic growth plan leading to a turnaround by the end of 2020, Coleman said. The company instead stopped production and closed its retail stores.

Although Harley-Davidson’s shares are trading near the bottom of their 52-week range, they are not attractively priced given the company’s substantial challenges, including the loss of production and sales due to the coronavirus, the analyst said.

HOG Price Action

Harley-Davidson shares were trading 5.47% higher at $15.82 at the time of publication Monday.

Ducati sells over 53,000 bikes in 2019

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by Express Drives Desk from https://www.financialexpress.com

Panigale, Multistrada biggest contributors to growth

The Panigale and the Multistrada are said to have played an instrumental role in helping Ducati sell more than 53,000 motorcycles worldwide in 2019.

Ducati Motor Holding has announced that in 2019, the brand sold 53,186 motorcycles. Recoding a margin growth of 0.3% when assessing against 53,004 units sold in 2018. For the fifth consecutive year, Ducati has sold more than 50,000 units within a calendar year. Globally, the 500cc above segment for motorcycles has seen a growth of 1.4%.

However, while sales volume saw marginal growth, Ducati’s revenue saw further positive growth. The company’s turnover at the end of 2019 stood at €716 million (~Rs 57.7 billion) with an operating profit of € 52 million which is higher than € 49 million it secured in 2018. Ducati says that it recorded a turnover per bike figure which with about € 13,500 / motorcycle shows the highest value in the history of the company.

The Italian superbike manufacturer claims that the Panigale superbike and the Multistrada adventure tourer motorcycles were instrumental in helping Ducati achieve these numbers. The Panigale has been the best selling super sports bike in the world for the second consecutive year and currently holds a massive market share of 25%. The Multistrada 950S and the 1260 Enduro being added to the range, the ADV family saw its best sales performance till date since it was first introduced back in 2003.

Currently, there are 1,655 employees that work directly under Ducati Motor Holding. The Italian superbike maker has its presence in over 90 countries one of which is in India. Ducati India sells multiple variations of the Panigale, Supersports, Multistrada, Monster, Diavel, Scrambler and the Hypermotard motorcycles.

Will 2020 mark a turnaround for motorcycle powerhouse Harley-Davidson?

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Matt Levatich is CEO of Harley-Davidson.

by Margaret Naczek from https://www.bizjournals.com

For 117 years Harley-Davidson Inc. has led the market in motorcycles and continues to hold a dominant market share in the U.S. heavyweight motorcycle market.

Despite its dominance in motorcycles, fewer people are buying bikes, and the number of U.S. riders are growing at a slow pace. For several consecutive quarters, the company faced declining sales, lower revenue and flat stock prices.

With falling sales numbers, 2020 is becoming a pivotal year for the company founded in 1903. Harley has plans to grow riders to 4 million by 2027, from 3.1 million now, and invest in new markets with its More Roads to Harley-Davidson initiative, which launched in 2018. Some analysts, however, are uncertain of Harley’s ability to achieve such goals.

“We are becoming a company that excels and exists to not only build great bikes, but to build riders,” Harley-Davidson CEO Matt Levatich said in the company’s fourth-quarter conference call.

During the call, Levatich listed four target areas that the Harley plans to hit in 2020 to retain early riders, a category segment that the manufacturer has struggled with. The company plans using riders to recruit and coach new riders, allow early riders to experience riding opportunities on their own turn and on their own terms and solidifying rider commitment through experimental opportunities like overnight rides.

New motorcycles such as Harley’s first electric motorcycle LiveWire, released in September 2019, or the new Pan America adventure touring bike and Bronx Streetfighter bike, which are expected to release late in 2020, are also part of the company’s efforts to turn U.S. motorcycle sales around and build a strong ridership base.

At least one dealer is hopeful about the strategy.

“It’s brave if you think about it,” said Goran Zadrima, regional manager at Milwaukee and West Bend Harley-Davidson. “A lot of companies in the past have attempted to go after the Harley touring market, and everybody fell on their face trying to take Harley in the touring market. The fact that Harley is getting into the adventure and the streetfighter market, that’s a huge market. There’s a lot of good brands out there, but the one thing that Harley has that nobody has anywhere is the dealer network.”

Harley Davidson sells over 25,000 motorcycles in India

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Harley Davidson Street 750 was the first large-capacity motorcycle in India to become BS-VI compliant in the 750cc and above category.

Premium motorcycle manufacturer Harley Davidson reported on Tuesday that it has sold more than 25,000 motorcycles since its inception in 2009.

The company also informed that with this development, it completed a decade of operations in India.

Commenting on this, Sajeev Rajasekharan, Managing Director, Harley-Davidson India, said, “When we first made inroads into India, our goal was to create a market for premium motorcycles, and we are proud to be the preferred choice for enthusiasts.”

He also said, “Harley-Davidson has been successful in securing its market share over the last decade, despite an unpredictable market. With 33 dealers across the country, we have the largest dealer network amongst premium motorcycle brands in India and will continue to go onward and upward.”

Rajasekharan further said, “We are thrilled about our journey over the last 10 years and are sure that the next decade will see more community building, innovations and launches from the H-D stable.”.

Harley-Davidson Street 750 became the first large-capacity motorcycle in India to be BS-VI compliant in the 750cc and above category, claimed the company.

Indian motorcycle sales surge 37% following rollout of Challenger

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by Carrigan Miller and Mark Reilly from https://www.bizjournals.com

Polaris Inc. stock is up sharply Tuesday morning after the maker of ATVs, snowmobiles and motorcycles reported better-than-expected profits for the fourth quarter, driven in part by the rollout of a new Indian motorcycle.

The Medina, Minnesota-based manufacturer posted income of $98.9 million for the quarter, or $1.58 per share, up from $91.4 million, or $1.47 per share the year before. Adjusted earnings were $1.83 per share, ahead of Wall Street average estimates of $1.79.

Sales were $1.73 billion, up 7% from the year-ago period but at the low end of Wall Street estimates. Sales growth was led by the company’s Indian Motorcycle division, which saw revenue increase by 37% to $116 million as Indian debuted the Challenger, a heavyweight touring bike.

Indian is the vintage motorcycle brand that Polaris is marketing as an alternative to those sold by Milwaukee-based Harley-Davidson Inc. The Challenger is indicative of how Polaris is positioning Indian. Upon the rollout of the Challenger in October, motorsports industry writers were comparing it to Harley-Davidson’s Road Glide, a big touring bike that represented a sizable portion of Harley’s sales mix back in 2013, when the iconic motorcycle manufacturer put Road Glide on a hiatus that lasted all of one year.

Indian unveils new Challenger lineup for 2020

As for Polaris, investors liked what they saw. Shares of Polaris closed up almost 6% Tuesday. The company may look particularly good in comparison to rival Harley-Davidson, which reported its lowest quarterly sales in years and missed Wall Street estimates by 6%, Barron’s reports. Shares of Harley (NYSE: HOG) closed down about 3% at $33.79.

Sales in off-road vehicles and snowmobiles, still the company’s biggest business, grew by 7% as the fortunes for ATVs and snowmobiles diverged. Sales of off-roading vehicles like the RZR and Ranger rose 13%, snowmobile sales were down 10 percent.

Boats, the company’s newest business unit that includes the recreational and sport boat brands of Marquis-Larson Boat Group of Pulaski, also saw a sales decline during the quarter, while clothing and aftermarket parts rose.

For the full year, Polaris posted earnings of $323 million, or $5.20 per diluted share, on sales of $6.8 billion.

“In 2019, we delivered strong operational performance across Polaris (NYSE: PII), especially productivity and delivery, and we expect further gains to create value for customers and shareholders in the year ahead,” Polaris CEO Scott Wine said in a statement.

Polaris said it projected growth between 2% and 4% in 2020, with earnings in the range of $6.80 to $7.05 per diluted share. “While the negative impact of tariffs remains a significant headwind on an annualized basis, the year-over-year impact is expected to be minimal,” the company said.

Harley-Davidson’s stock tanks as motorcycle sales continue to slide

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by Paul R. La Monica from https://edition.cnn.com/

New York (CNN Business)Harley-Davidson has a big problem. Americans aren’t riding its trademark hogs nearly as much as they used to do.

Shares of Harley-Davidson (HOG) fell 3% in early trading Tuesday after the company reported sales and earnings that missed Wall Street’s forecasts. The stock is now down more than 10% this year.

Most alarming: Demand for Harley’s bikes continued to fall in the United States — even as they rebounded overseas.

Harley’s retail sales in America were down 3% in the fourth quarter. That’s the 12th consecutive decline. US sales fell more than 5% for the full year.

Sales were up slightly internationally, led by a more-than 6% jump in Asia. But that wasn’t enough to lift Harley’s worldwide motorcycle sales, which fell 1.4%.

The weakness in Harley’s home market is particularly disappointing given that the United States and China have now reached a “phase one” trade truce. Harley has been complaining about tariffs put into place by the Trump administration for the past few years.

President Donald Trump has also been critical of the fact that Harley — based in Milwaukee — had shifted some of its production outside of America to avoid tariffs in Europe that were put into place on the company in response to US tariffs on steel and aluminum. Trump even supported a boycott of Harley by US consumers in 2018.

But Harley clearly has bigger problems than global trade policy. The company is trying to revitalize its sales with the launch of its LiveWire electric motorcycle.

Harley CEO and president Matt Levatich struck a hopeful tone in the company’s earnings release.

“We see 2020 as the pivotal year in the transformation of Harley-Davidson. This year we will broaden the reach of our brand and build more committed riders as we enter new and growing segments in motorcycling and eBicycles,” Levatich said. “More and easier access to two-wheeled freedom on a Harley is well underway.”

Going electric could help revive the motorcycle industry

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by Peter Valdes-Dapena from https://edition.cnn.com/

Motorcycle sales, particularly in the United States, have been struggling ever since the Great Recession. As older riders lose interest, or simply become unable to ride any longer, the younger generation hasn’t been showing the same kind of enthusiasm.

But the industry is hoping that electric motorcycles — with a quieter, simpler experience — might be the key to attracting new riders.

For one thing, electric motorcycles are easier to ride. With an electric motor, there’s no need to shift gears. To experienced riders, that’s no big deal, but most Americans today have become accustomed to automatic transmissions and don’t know how to shift gears.

“It’s just a lot easier learning curve,” said Susan Carpenter, a writer and radio host specializing in motorcycles. “You just hop on and twist the throttle. If you can balance, you can go.”

Another benefit is that electric motorcycles are much less noisy than gasoline-powered motorcycles. To many veteran riders, the roar of the engine is part of the excitement. But a lot of other people would prefer to enjoy their surroundings much more peacefully. The bikes also don’t have hot engines and exhaust pipes that can become burn hazards, especially when parked around kids.

Electric motorcycles also qualify for federal and state tax credits, similar to those for electric cars, although in smaller amounts.

There are tradeoffs, of course. Electric motorcycles have the same disadvantages as electric cars, namely cost and range. Motorcycles can only accommodate small batteries so they have a lot less range than gas-powered bikes. And that range diminishes greatly during high-speed highway riding because the bike’s electric motor has to compensate for increased wind resistance pressing against the rider’s not-so-aerodynamic body.

Hoping to get the attention of a new generation of riders, Harley-Davidson introduced the LiveWire electric motorcycle earlier this year.

But with a starting price of nearly $30,000 — more than three times the cost of an entry level motorcycle — it’s unlikely to attract many novice riders. With its extreme performance capabilities — it can go from zero to 60 miles per hour in just three seconds — the LiveWire doesn’t appear to be for first-time riders. (The bike does have selectable performance modes so it can be set up for less aggressive riding.)

“LiveWire sets the stage and sets the tone and is designed and priced to be a halo vehicle,” said Harley-Davidson spokesman Paul James, explaining that the LiveWire is aimed at establishing an image for the brand’s electric offerings rather than being a big seller. “And we’ll quickly follow that up with other form factors and other electric two-wheelers that will be in various price points and aimed at different customers.”

Harley-Davidson (HOG) wanted this bike to get people used to the idea of a motorcycle that doesn’t have the brand’s signature engine burble, said James. The LiveWire does make its own distinct sound, though. It comes from the gears that carry power from the electric motor to the belt that spins the back wheel. Harley-Davidson engineers spent time specifically tuning the naturally occurring whirring sound, much as they would the rumble of a gasoline engine.

For the real novices, Harley-Davidson offers the IronE, which targets tiny riders aged three to seven. The teeny off-road bike is powered by a small detachable battery similar to ones used for electric power tools and starts at around $650. Harley-Davidson has also shown pedaled e-bikes and scooters as concepts.

California-based Zero offers electric motorcycles like the Zero FX ZF3.6 for around $9,000. That bike has an estimated 27 miles of riding range from a small battery that can be easily changed for a fully charged one when it runs low on power. For about twice that amount, or around $20,000, bikes like the Zero SR/F can get about 123 miles in combined city and highway riding. (That compares to the 95 miles Harley-Davidson estimates for the LiveWire.) Buyers can also add battery power using a “Power Tank” accessory.

Zero’s bikes are used in a program called Discover the Ride, which introduces novice riders to motorcycle riding and takes place at Progressive International Motorcycle Shows across the United States. Riders demonstrate their basic two-wheeler skills on an electrically-assisted bicycle, then they are offered a ride on a Zero electric motorcycle.

Cake, a Swedish company, has models starting at a slightly more affordable $8,500. For that price, a buyer can get Cake’s ultra-minimalist Ösa+ model. Its design was inspired by a workbench and it looks like it. With detachable clamps, the owner can quickly customize the bike with cargo racks or an additional seat. The Ösa+ has a top speed of just 60 miles an hour. It’s intended as an urban workhorse.

Cake also makes the slightly faster and pricier Kalk& with a more traditional, but still distinctively spare, design.

With their emphasis on light weight and simplicity, Cake bikes take the idea that electric motorcycling should be different from riding a gas-powered bike to an extreme. The models are particularly popular with new riders, according to a company spokesman. After being available in the US for a little over a year, there’s a three-month waiting list for the bikes, Cake claims.

E-bikes to rule the US EV market in next decade

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In the last couple of years, e-bike sales have been growing steadily in the US, but they still represent a small part of the overall segment in the country.

Electric vehicle market in the US in the next decade will be dominated by e-bikes, claims a media report. It forecasts a total of 113 million e-bikes will be sold in the country between 2020-2023.

Sales of the electric bikes in the US have grown more than eight-fold since 2014, claims the report further.

In the last couple of years, sales of e-bikes have been growing steadily in the US, but they still represent a small part of the overall bike segment in the country. As the report claims, e-bike sales jumped by an incredible 91 per cent from 2016 to 2017. Also, it grew 72 per cent from 2017 to 2018 to reach $143.4 million, as revealed by market research firm NPD Group.

Between 2006 and 2012, e-bikes represented less than 1 per cent of total annual bike sales. In 2013, US customers bought 1.85 lakh e-bikes, while across all of Europe, 1.8 million units were retailed.

The media report quotes Jeff Loucks, executive director of Deloitte’s Technology, Media, and Telecommunications centre, who said that e-bike sales will not increase evenly across the US. He forecasts cities, in particular, will see the biggest adoption rates.

As he said, “We’re seeing more people move into the urban core of cities throughout the United States. And it’s just going to put a huge load on the roadways and on public transportation systems if some of that isn’t taking place by bike.”

from https://auto.economictimes.indiatimes.com/

Does Indian Motorcycle Have a Harley-Davidson Problem?

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by Rich Duprey from https://www.fool.com/

Sales remained aloft longer than its rival, but now even its sales are falling.

As much as falling motorcycle sales at Harley-Davidson (NYSE:HOG) have been attributed to its core customer aging out of the market while the next generation of riders seems uninterested in buying the big bikes it produces, Indian Motorcycle sidestepped most of the same pitfalls even though it produces many of the same kinds of motorcycles as Harley does.

Since being resurrected from bankruptcy by Polaris Industries (NYSE:PII) and returned to the market in 2014, Indian has been a steady performer with retail sales often rising in the double-digit percentages. That has allowed it to steal market share from Harley, whose sales often contracted at similar percentages.

Yet with Polaris’ third-quarter earnings report released last month, investors may have to accept that Indian Motorcycle now has its own Harley-Davidson problem.

A worsening sales decline
Polaris Industries is not transparent at all when it comes to telling you how its motorcycle business is performing. Where Harley breaks down sales and shipments by geographic region and type of motorcycle, Polaris provides vague percentage increases or declines, maybe calling out a model once in a while, but never giving investors any real insight into how Indian’s various motorcycles are performing.

What we do know is that despite double- and even triple-digit sales growth early on, Indian Motorcycle sales are now quickly spiraling down. Even as Polaris obscures the actual numbers, a mid-teen-percentage decline in retail sales that far eclipses the contraction of the broader motorcycle market suggests that this is becoming a big problem for the bike maker.

Worse, the downdraft is accelerating. In the second quarter, Polaris said Indian retail sales were down by almost 10%, while in the first quarter they were down by high single-digit rates. In last year’s fourth quarter they were down by low double-digit amounts, which was a big drop since they had been positive the quarter before.

That doesn’t bode well for when Polaris reports results the next time around. Even though the bar has been lowered considerably on sales, there’s no reason to think it will be able to rebound — precisely because Indian is still making the same kinds of heavy, big-bore bikes as Harley.

It just released its newest touring motorcycle, the 2020 Challenger, that houses its bigger, more muscular liquid-cooled PowerPlus engine that evokes images of Harley’s Road Glide.

Looking to reverse direction
Certainly both bike makers are hoping to change the equation. Harley has gone all-in on electric motorcycles — a field Polaris rejects, saying they’re unprofitable — along with two new styles it recently unveiled that represent a big change for the bike maker: the Bronx streetfighter and the Pan America adventure bike. They’re smaller, lighter, and meant for a different kind of riding than typified by Harley’s cruisers.

Polaris has also introduced a new bike, the FTR 1200, which was inspired by its racing team’s success on the flat-track circuit. While many enthusiasts had hoped for a street version of the FTR 750 that was tearing up the track, Polaris came out with a somewhat bigger, more powerful bike that it also hopes changes the conversation about its products.

But the introduction of the FTR 1200 was flawed in several respects. Polaris was late to market with the bike, so it missed a good part of the sales season, and then misjudged demand for the different models, believing more buyers would want the base model when in reality there was higher demand for the race replica version.

The new model helped lift international sales in the quarter, but it may be a while before we see any impact here at home. Motorcycle sales typically dry up during the winter months, and it’s still unknown what kind of demand will be there come the spring.

The outlook isn’t bright for biking
Polaris Industries, unlike Harley, is more than just a motorcycle maker. It also makes side-by-side recreational vehicles, snowmobiles, utility vehicles, and more recently boats. They help the powersports vehicle maker smooth out sales over the year. And motorcycles only account for 9% of total revenue.

Yet with motorcycle sales deepening even further into the red, Indian is mimicking the worst aspects of its rival at just the wrong time, and its problem could only get worse.

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, beating Wall Street expectations of 52 cents while revenue from motorcycles and related products overall fell 4.9% to $1.07 billion.

The company, which has been criticized by President Donald Trump for its plan to shift some U.S. production overseas, has also been battling the effects of trade tensions on its business globally.

Harley said on Tuesday retaliatory import duties imposed by the European Union and China on its bikes would cost the company about $105 million in 2019, up from its prior estimate of $100, with about $90 million of the hit coming from EU tariffs.

Brussels in June raised import duties on U.S.-manufactured Harley bikes to 31% from 6%, and the company said the impact from tariffs more than doubled in the third quarter from a year ago to $21.6 million.

In response, Harley plans to begin shipping bikes from its Thailand plant but a delay in regulatory approval from the trading bloc means it will not see any benefit in earnings before the second quarter of 2020.