Well, you cannot say this was a surprise. Harley Davidson’s first quarter sales of bikes in the USA were down by 12.8%
This follows their 4th Quarter 2007 results, which I wrote about here.
Once again, the failing US economy has taken a bite outta Milwaukee. Harley Davidson will be shipping fewer bikes throughout the rest of the year, to prevent a huge build up of unsold inventory (which would be really bad for the stock price -- we’ve all seen what massive unsold inventory has done to GM and Ford).
From Harley’s Official Press Release earlier today:
Company Reduces Full Year Shipments and Revises Guidance
MILWAUKEE, April 17 /PRNewswire-FirstCall/ -- Harley-Davidson, Inc.
(NYSE: HOG) today announced its results for the first quarter ended March
30, 2008. Revenue for the quarter was $1.31 billion compared to $1.18
billion in the year-ago quarter, a 10.8 percent increase. Net income for
the quarter was $187.6 million compared to $192.3 million, a decrease of
2.5 percent compared to the first quarter of 2007. First quarter diluted
earnings per share (EPS) were $0.79, a 6.8 percent increase compared to
last year's $0.74.
"With growing weakness in the economy, U.S. retail sales of
Harley-Davidson(R) motorcycles were down 12.8 percent in the first quarter.
Although these retail results are disappointing, Harley-Davidson's U.S.
dealers outperformed the heavyweight motorcycle industry, which was down
14.0 percent," said Jim Ziemer, Chief Executive Officer of Harley-Davidson,
Inc.
"We've said on a number of occasions that we would closely monitor the
retail environment and regularly assess our wholesale shipment plans, and
we remain committed to shipping fewer Harley-Davidson motorcycles to our
worldwide dealer network than we expect they will sell this year. In view
of U.S. retail trends and uncertainty about the future of the economy, we
now plan to ship 23,000 to 27,000 fewer Harley-Davidson motorcycles in 2008
than we shipped in 2007, resulting in total planned 2008 shipments between
303,500 and 307,500 units," Ziemer said.
"We will achieve the shipment reduction through temporary plant
shutdowns and adjustments to daily production rates. This will result in a
decrease of about 370 unionized employees over the next several months. Our
management group and union leaders will work together to implement this
reduction."
"The Company will also be reducing the non-production workforce by
about 360 jobs. We believe these actions will better position the Company
for a business environment that we expect to continue to be challenging,"
Ziemer said.
"Harley-Davidson is fortunate to be dealing with the current economic
environment from a position of financial strength. We are a great company
with an exceptionally powerful brand. We are optimistic about our long term
business prospects and we will continue to invest in marketing, product
development and our international business to drive future growth."
"For 2008, the Company now expects earnings per share to decrease
between 15 and 20 percent compared to 2007 resulting in expected earnings
per share of $3.00 to $3.18," said Ziemer. This supersedes all previous
guidance on earnings per share and other measures.
The Company expects to ship between 76,000 and 80,000 Harley-Davidson
motorcycles in the second quarter of 2008.
