Harley-Davidson Releases First Quarter 2017 Sales Results

The MoCo is confident in full-year plan despite international retail sales being down.

Harley-Davidson 2017 sales report
First quarter worldwide Harley-Davidson retail motorcycle sales were down 4.2 percent compared to the same period in 2016.Photo: Motorcyclist Archives

Harley-Davidson has just released its first sales results for 2017. The financial report shows that first quarter 2017 diluted EPS decreased 22.8 percent to $1.05 compared to $1.36 in the same period of 2016. First quarter net income was $186.4 million on consolidated revenue of $1.50 billion versus net income of $250.5 million on consolidated revenue of $1.75 billion in the first quarter of last year.

“First quarter U.S. retail sales were in line with our projections and we remain confident in our full-year plan despite international retail sales being down in the first quarter,” said Matt Levatich, CEO, Harley-Davidson. “We are very pleased with our continued growth in U.S. market share and the progress our U.S. dealers made in reducing their inventory of 2016 motorcycles in the quarter.”

First quarter worldwide Harley-Davidson (NYSE:HOG) retail motorcycle sales were down 4.2 percent compared to the same period in 2016. In line with the company’s expectations, Harley-Davidson retail motorcycle sales in the U.S. were down 5.7 percent compared to the year-ago quarter, with the overall U.S. industry down for the same period. Harley-Davidson's U.S. market share for the quarter was 51.3 percent in the 601cc-plus segment, up compared to the first quarter in 2016. Harley-Davidson’s international retail sales decreased 1.8 percent compared to the same quarter in 2016.

“We recently announced our plan to build the next generation of Harley-Davidson riders globally. We are energized by our focused strategy, and we believe our powerful brand and commitment to excellence will position us to drive demand for our products and grow our sport,” concluded Levatich.

The company’s long-term strategy through 2027 is focused on five objectives to:

·         Build two million new Harley-Davidson riders in the U.S.
·         Grow international business to 50 percent of annual volume
·         Launch 100 new, high-impact motorcycles
·         Deliver superior return on invested capital for Harley-Davidson Motor Company (S&P 500 top 25%)
·         Grow the business without growing its environmental impact

Harley-Davidson Retail Sales 2017 1st Quarter 2016 1st Quarter Change
U.S. 33,316 35,326 -5.7%
Latin America 2,361 2,470 -4.4%
EMEA 10,167 10,210 -0.4%
International Total 21,733 22,132 -1.8%
Worldwide Total 55,049 57,458 -4.2%

Income Tax Rate
For the first quarter of 2017, Harley-Davidson's effective tax rate was flat compared to the prior year at 34.5 percent. The company continues to expect its full-year 2017 effective tax rate will be approximately 34.5 percent.

Other Results
At the end of the first quarter of 2017, cash and marketable securities totaled $844.7 million, compared to $739.1 million in 2016. Harley-Davidson generated $159.9 million of cash from operating activities in the first quarter of 2017 compared to $41.1 million in the same period of 2016. The company paid a cash dividend of $0.365 per share for the first quarter of 2017, an increase of 4.3 percent compared to the first quarter of 2016. On a discretionary basis, the company repurchased 1.2 million shares of its common stock during the first quarter of 2017 for $70.9 million. There were approximately 177.1 million weighted-average diluted common shares outstanding in the first quarter of 2017, compared to 184.2 million shares in the first quarter of 2016. At the end of the first quarter, 18.0 million shares remained on a board-approved share repurchase authorization.