Harley-Davidson Lowers Revenue Forecast Due to Weak Demand

Harley-Davidson has revised its annual revenue forecast due to weak demand for its motorcycles in North America. This change comes as consumer spending on high-cost items declines, influenced by persistent inflation and elevated borrowing costs. Following this announcement, Harley-Davidson’s shares fell by more than 3%.

CEO Jochen Zeitz emphasized the company's efforts to navigate these economic challenges. He stated, "We have worked diligently through the quarter to mitigate the impact of high interest rates and macroeconomic uncertainty that continue to put pressure on our industry and customers, especially in our core markets."

Retail sales in North America, Harley-Davidson’s largest market, dropped by 10%. In response to this slump, the company has focused on promoting its more profitable Touring bike models, which helped it exceed third-quarter profit estimates, according to Reuters. Harley reported earnings of 91 cents per share, surpassing the average analyst estimate of 79 cents.

As part of its strategy to align inventory with retail performance, Harley-Davidson has decided to reduce motorcycle shipments in the second half of the year. The company now expects full-year global shipments to decline by 16% to 17%, a significant shift from its earlier projection of a 7% to 10% decline. Additionally, it anticipates annual retail sales to decrease by 6% to 8%, compared to an earlier forecast of flat to a 3% increase.

Harley-Davidson now expects revenue from motorcycles and related products to decline by 14% to 16%, compared to a previous forecast of a 5% to 9% decline.