MILWAUKEE—Shares in Harley-Davidson tumbled nearly 10 per cent after the company reported lagging retail sales and shipments as new riders opted for used motorcycles over newer, more expensive ones.
The company lowered its guidance for motorcycle shipments in 2017 by about 6 to 8 per cent as retail sales of Harley-Davidson motorcycles fell 9.3 per cent in the U.S. and 6.7 per cent globally from the same quarter last year. Motorcycle shipments for the second quarter fell 7.2 per cent from last year’s second quarter.
The company said it is strategizing how to better balance sales of new and used motorcycles as the industry tries to attract millennials and other young adult riders.
“Plenty of millennials ride motorcycles,” said President and CEO Matthew Levatich. “A lot of the data that is easy to get is new motorcycle sales, but if you look at that used market place, there are plenty of millennials that are riding, and it’s up to us to inspire even more them to ride and to engage with Harley-Davidson’s products and experiences and the strategy that we had laid out.”
Harley-Davidson on Tuesday reported second-quarter earnings of $258.9 million, which beat Wall Street expectations but came in lower than the $280.4 million for the second quarter last year.
The Milwaukee-based company said it had net income of $1.48 per share, in part due to lower costs. That also topped expectations, but fell short of the $1.55 per share for the same period last year.
The average estimate of nine analysts surveyed by Zacks Investment Research was for earnings of $1.37 per share.
The motorcycle maker posted revenue of $1.58 billion in the period, which fell short of Street forecasts. Eight analysts surveyed by Zacks expected $1.6 billion. The company had revenue of $1.67 billion in the same period last year.
Harley-Davidson shares have declined about 20 per cent since the beginning of the year and about 4 per cent in the last 12 months.