HD Expectations Tumbled

[Sully]

Shares in Harley Davidson tumbled Tuesday after the company posted a fourth-quarter loss and said it was setting "realistic expectations" after years of underperformance.

Harley also revealed a five-year turnaround plan that includes $190 million to $250 million a year in capital investments and a focus on touring, cruiser and trike markets to achieve higher growth in motorcycle revenue.

The company said its bike shipments to dealers for 2020 fell 32% to about 145,000 units, one of the lowest levels since the 1990s. In the recent quarter, bike shipments were down 48% to about 40,500 units.

Part of the company's strategy has been to tighten inventories to address an over-supplied market, along with eliminating discounted pricing.

"We will not chase volume for volume's sake," Jochen Zeitz, chairman, president and CEO said in a conference call with analysts.

Harley posted a fourth-quarter loss of $96 million, or 63 cents per share, compared with a profit of $13 million, or 9 cents per share, a year earlier. Revenue fell to $725 million, down 32% from a year earlier.

The company said its North American motorcycle sales were down 15% in the quarter and 18% for the full year. Worldwide, it exited 39 markets in 2020, and its bike sales were down 17% for the year.

Highlights of the five-year turnaround plan, named The Hardwire, include launching a used bike program called Harley-Davidson Certified, creating a separate division for electric motorcycle development, and extending employee ownership to all 4,500 employees through an equity grant.

We launch The Hardwire with capabilities, assets and a legacy unmatched by any competitor," Zeitz said.

Still, it's going to be a hard road back for the world's largest manufacturer of heavyweight motorcycles as its baby-boomer customer base ages out of riding and not enough young people have embraced the big cruiser and touring bikes.

Following the earnings announcement and conference call with analysts, Harley shares tumbled nearly 19% as investors showed skepticism. The stock closed at $33.28, down 17% for the day.

Obviously the earnings were a big disappointment. Until they can prove Wall Street wrong, I think the stock is going to continue to be volatile," said analyst Brian Yarbrough with Edward Jones Co.

They are doing the right thing by trying to correct the supply and demand problem. There has been way too much supply in the market and not enough demand," Yarbrough said. "But I just don't know that shrinking your way to profitability works."

The biggest cloud that hangs over Harley is the cloud of aging demographics and younger customers not being interested in their bikes. Whether that is the truth or not, it's the cloud that hangs over them from an investor standpoint," he added.

A year ago, then-CEO Matt Levatich said 2020 would be a pivotal year as the company focused on attracting new customers through smaller, more versatile bikes and electric motorcycles.

Shortly after, Levatich left the company after 26 years. Under Zeitz's leadership, Harley-Davidson has focused on big bikes that are more popular with older, wealthier, experienced riders

[LostInTheCarolinas]

Well, I wish them luck. They are going to need it. Why? Because they are responding to image, history, thoughts and theories, and not responding to customer needs, wants and inputs.

• To me, electric bikes are about practicality and low cost. But they don’t offer, and aren’t planning, a commuter ebike with GPS, iphone radio, little bags and a windshield. So, no sale to me.
  
• Traditional owners are begging for great service, but not a word about that, or about valuing them as customers. No sales there.
  
• I’m on a GW trike, but they could have offered me a light weight touring alternative to the Wing. Something for two riders, but 200-300 pounds lighter than the 920# Honda. I might have bought that, but no bike, no sale.
  

See where I’m going with this? They just aren’t REALLY listening. I hope they start soon. Their customers and SHOPPERS are begging to help them succeed.

[MikeyTX]

The word on the street is that Harley has as much viability as a filament lightbulb in the age of the LED. They still haven't fully adapted to that.

[bikerbillone]

Carlolinas, post #2, certainly concur, especially your point number 2. Lots of dealers out there that could vastly improve on customer service.

[rhino 2]

Back in 2005 i need a front tire for my 1800 VTX and when i went to the dealer where i bought it 'I bought a few bikes from him over the years...He told me i would have leave the bike for a few days he was that busy [Those were the days they were selling bikes like they were giving them away] ...I said can i just order the tire and when it comes in i will drive it in add hang around till its done...Because i would need someone to follow me here and then drive me back when its done..

His answer was better find a designated driver we can't do anything while the customer waits......Needless to say i found a dealer that did it while i waited ...

Why I'm bringing this up is that dealer that was too busy was a in a hundred thousand square foot building ....A few years later when all bike sales tanked ...He had to move into a building one tenth the size a few miles down the road..And years latter i happened to stop in to get a can of Honda spray wax...The owner comes over to me and Says where have you been Bob i haven't seen you in years...And when i told him why..He said 'Oh we do that stuff while you wait now ....I look him in the eyes and said now that you need me ''Now you do''...

And that's what will happen with Harley Dealers when it comes to service once the dealers that own more than one dealership have to down size to only one store..

[Sidecarbill]

I believe it all boils down to greed and short shortsightedness.

[Jack Klarich]

If Harley kills off the traditional Sportster line they will not attract younger riders

If Harley does not keep the touring lines traditional V Twin air/ oil cooled and liquid cooled heads they will lose their base

If Harley does NOT listen to their base they will fail

[rhino 2]

If Harley kills off the traditional Sportster line they will not attract younger riders

If Harley does not keep the touring lines traditional V Twin air/ oil cooled and liquid cooled heads they will lose their base

If Harley does NOT listen to their base they will fail

I had a Dog once Named Harley.....And just like Harley' Harley never listened to me....

[Wmitz]

Damage is done, all that is left to do is picking up the pieces. The moco brought this on all by itself. Greed, as others have mentioned, and the egotism that they are HD and can get away with anything have landed them in the on their back foot. Been on a Harley for 46 years, sad to watch the implosion due to the inattentive attitude to it’s customers and ego.

[Fearless]

They sell more over priced merchandise than anyone I know. Or at least try...

[Phu Cat]

The biggest cloud that hangs over Harley is the cloud of aging demographics and younger customers not being interested in their bikes. Whether that is the truth or not, it's the cloud that hangs over them from an investor standpoint," he added.

Young riders have been 'feminized' by the left. That's not the fault of Harley, but like every other motorcycle manufacturer, they'll all suffer for it.

PC

[Mykneesbehurtin]

I agree with all the statements made here along with poor engineering and piss poor quality control .After having 9 warranty claims on my trike this is how I feel anyway. Unfortunately I had to take extreme measures to get my oil migration issue addressed and wouldn't you know the vent they installed is now seeping oil on the back side of the primaryso this will have to be addressed as soon as spring rolls around.

[rhino 2]

I agree with all the statements made here along with poor engineering and piss poor quality control .After having 9 warranty claims on my trike this is how I feel anyway. Unfortunately I had to take extreme measures to get my oil migration issue addressed and wouldn't you know the vent they installed is now seeping oil on the back side of the primaryso this will have to be addressed as soon as spring rolls around.

After 5 or 6 claims with my 2017 [Oil Migration]...I threw in the towel.....

[Mykneesbehurtin]

After 5 or 6 claims with my 2017 [Oil Migration]...I threw in the towel.....

I gave that some thought and that is exactly what HD wants hoping you will trade in on a new one. Well I got pissed off and when that happens I get determined. In my case it worked out in my favor, I think anyway lol

[rhino 2]

I gave that some thought and that is exactly what HD wants hoping you will trade in on a new one. Well I got pissed off and when that happens I get determined. In my case it worked out in my favor, I think anyway lol

I traded it in for a Slingshot...After two years a power sport dealer near me had a 2019 Tri-Glide with under 2 hundred miles on it from a Harley dealer that went belly up...So i traded it for the Tri...Then i had a Harley dealer i do business with do a DNA on the Vin#....And it has a full factory warrantee all the updates /recalls were done including the vent....If that haven't popped up i would never have bought another Harley..

[Sully]

After many conflicting bits of info, I did a bit of research, it’s a bit long winded but may or may not be of interest to some.



# 60% of HD parts are made in the US, other parts are sourced from Italy - brakes and clutches, Austria - pistons, Japan - suspension China & Mexico- electronic components. Foreign parts have been a major part of HD since the 70’s.



# In 2019 Honda sold 19 million motorcycles,

HD sold 22000.

# Bike sales in dollar value:

China $7.5 Billion

Germany $2.5 Billion

Japan $2.5 Billion

India $2.3 Billion

Thailand $1.8 Billion

USA $1.2 Billion



# HD is developing smaller motorcycles with a Chinese partner in an attempt to cultivate new markets as ridership in the U.S. and Europe stalls. This is the first time Harley has ever contracted production out to an outside partner. You want cheap bikes, be careful what you wish for.



HD already makes bikes in India, Brazil, Thailand and of course the mighty USA.



I’ve said for years a light weight dirt bike should be something HD consider and for that matter, why not a quad bike and side by side, I’d be surprised if they haven’t already.

Unlike most manufacturers, HD have customers that regardless of what’s on offer from other manufacturers, are brand loyal, something other manufacturers must envy. HD customers will buy it and pay over the odds because it’s a HD, they won’t even consider another brand even if it’s similar and thousands cheaper.



If you got this far, I’m sure you’ll admit that some of the stats are somewhat surprising.

The inter web is so full of interesting yet. conflicting information so make of it what you will. It seems HD goes to some lengths to make it difficult to find out that detailed info. Don’t shoot the messenger, this is my interpretation and quite possibly someone else might find some contradicting info.

[1dn5up]

HD like any other Company. You got to do what you can to survive.

[Jack Klarich]

Harley shut its plant in India in 2020

[BKtrike]

Shares in Harley Davidson tumbled Tuesday after the company posted a fourth-quarter loss and said it was setting "realistic expectations" after years of underperformance.

Harley also revealed a five-year turnaround plan that includes $190 million to $250 million a year in capital investments and a focus on touring, cruiser and trike markets to achieve higher growth in motorcycle revenue.

The company said its bike shipments to dealers for 2020 fell 32% to about 145,000 units, one of the lowest levels since the 1990s. In the recent quarter, bike shipments were down 48% to about 40,500 units.

Part of the company's strategy has been to tighten inventories to address an over-supplied market, along with eliminating discounted pricing.

"We will not chase volume for volume's sake," Jochen Zeitz, chairman, president and CEO said in a conference call with analysts.

Harley posted a fourth-quarter loss of $96 million, or 63 cents per share, compared with a profit of $13 million, or 9 cents per share, a year earlier. Revenue fell to $725 million, down 32% from a year earlier.

The company said its North American motorcycle sales were down 15% in the quarter and 18% for the full year. Worldwide, it exited 39 markets in 2020, and its bike sales were down 17% for the year.

Highlights of the five-year turnaround plan, named The Hardwire, include launching a used bike program called Harley-Davidson Certified, creating a separate division for electric motorcycle development, and extending employee ownership to all 4,500 employees through an equity grant.

We launch The Hardwire with capabilities, assets and a legacy unmatched by any competitor," Zeitz said.

Still, it's going to be a hard road back for the world's largest manufacturer of heavyweight motorcycles as its baby-boomer customer base ages out of riding and not enough young people have embraced the big cruiser and touring bikes.

Following the earnings announcement and conference call with analysts, Harley shares tumbled nearly 19% as investors showed skepticism. The stock closed at $33.28, down 17% for the day.

Obviously the earnings were a big disappointment. Until they can prove Wall Street wrong, I think the stock is going to continue to be volatile," said analyst Brian Yarbrough with Edward Jones Co.

They are doing the right thing by trying to correct the supply and demand problem. There has been way too much supply in the market and not enough demand," Yarbrough said. "But I just don't know that shrinking your way to profitability works."

The biggest cloud that hangs over Harley is the cloud of aging demographics and younger customers not being interested in their bikes. Whether that is the truth or not, it's the cloud that hangs over them from an investor standpoint," he added.

A year ago, then-CEO Matt Levatich said 2020 would be a pivotal year as the company focused on attracting new customers through smaller, more versatile bikes and electric motorcycles.

Shortly after, Levatich left the company after 26 years. Under Zeitz's leadership, Harley-Davidson has focused on big bikes that are more popular with older, wealthier, experienced riders

This Tri Glide is my first Harley Davidson. I have had several Honda’s, Yamaha , and my last bike I wanted an American cruiser and chose Indian. Polaris corporation is a very difficult company to deal with, from the consumer and business side. Indian’s prices on apparel and accessories is higher than Harley. Believe it or not I was relieved seeing some of the accessory prices for Harley. I stayed away from Harley due to rumors about leaking motors, snobby dealers etc. I can say my recent TriGlide purchase was the friendliest experience I had buying any vehicle. The customer service is like none I have ever had. Maybe I am now dealing with a company that recognizes those customer issues. Whatever, I wished I would have switched years ago. Indianbrags about their bikes but they don’t hold the resale value like Harley Davidson. Be safe

[ultrafxr]

This Tri Glide is my first Harley Davidson. I have had several Honda’s, Yamaha , and my last bike I wanted an American cruiser and choose Indian. Polaris corporation is a very difficult company to deal with, from the consumer and business side. Indian’s prices on apparel and accessories is higher than Harley. Believe it or not I was relieved seeing some of the accessory prices for Harley. I stayed away from Harley due to rumors about leaking motors, snobby dealers etc. I can say my recent TriGlide purchase was the friendliest experience I had buying any vehicle. The customer service is like none I have ever had. Maybe I am now dealing with a company that recognizes those customer issues. Whatever, I wished I would have switched years ago. Indian

brags about their bikes but they don’t hold the resale value like Harley Davidson. Be safe

Good on you Barry. Great you had a good experience and are enjoying your new TG. Like many other things we are passionate about many of have a love / hate relationship with the motor company. But what you said about access to accessories which are not cheap but are available is a big plus for the moco. And resale value . . . well I don't think any others hold up like a Harley. Sure isn't what it was a few years ago but still way better than all the others imo.