Harley-Davidson Sees Double-Digit Sales Slump in America During Q4 2018
This is the eighth consecutive quarter H-D has seen a sales decline in its home market.
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Another quarter, another round of bad news for Harley-Davidson. Reporting its Q4 2018 financial results on Tuesday, Harley has announced a United States sales decline of 10.1 percent, its eighth consecutive drop in sales in the Milwaukee brand’s home market. International sales are down 2.6 percent making for a worldwide sales downturn of 6.7 percent compared to the same quarter the previous year.
Perhaps the figure that stands out the most in this dismal report is earnings per share of $0.00. That’s the furthest off Harley’s EPS has been from estimates since 2009 according to Bloomberg. Revenue is down 6.8 percent which is $1.15 billion and net income has fallen approximately $500,000. As of this writing, HOG stock is down about eight percent.
Those numbers aren’t pretty. They come at the end of a tumultuous 12 months for Harley-Davidson. 2018 marks the second whole year in a row of declining U.S. sales along with a high-profile factory shut-down, layoffs, and even a feud with the President of the United States, formerly one of the brand’s biggest cheerleaders.
There are many factors we could point to as to how Harley-Davidson got into this mess. The biggest is one that we’ve been repeating here for a while; H-D has failed to capture a younger audience as its base ages out of riding and the bikes are just too expensive.
So, how is Harley-Davidson going to right the ship? It’s betting all its chips on the More Roads to Harley-Davidson plan that was launched last summer and clearly hasn’t done much to improve U.S. sales yet. Part of that plan is launching new products like the aforementioned Pan America and LiveWire plus more electric motorcycles as well as a new naked bike.
The strategy also involves improving the dealer network, opening more storefronts in places like shopping malls to get the brand out in front of people, and turning up its efforts in foreign markets which have seen mixed results so far. For example, Harley saw stronger sales in Europe and Latin America in 2018 but declined in the Asia Pacific region and Canada. International sales were down 2.6 percent in Q4, though they went up slightly by 0.4 percent in 2018 overall.
All we can say is that Harley-Davidson is going to have to do better than a $30K electric bike that gets worse range than a Zero if they’re going to turn around their fortunes at home.