HARLEY DAVIDSON REPORTS DECLINING SALES AND PROFITS, BACKS FULL YEAR SHIPMENT FORECAST
Harley Davidson (HOG) reported Q3 earnings that beat analyst predictions and the company announced it will meet full year shipment forecasts, despite lagging sales and net income that declined from $114.1 million to $68.2 million YOY. HOG reported U.S. retail sales declined 8.1% for the quarter, with total global sales down 6.9% from Q3 ‘16. Moving forward the company hopes that a price increase on some of their bikes, favorable foreign exchange rates and more models to choose from, will lead to improved profits.
Howie Long-Short: Harley’s core audience is aging. They’re not buying new bikes and they’re flooding the resale market with used ones. The younger demographic is scooping up bargains on the resale market or opting for lower-margin models. Harley can’t solve those problems and they have no control over exchange rates, but they are doing a good job controlling what they can. The company is introducing 17 new models in 2018, 9 of which are under $12,000. They’re giving the consumer what they want!
Fan Marino: Millennial motorcycle enthusiasts aren’t the only ones opting to save where they can. NBA star LeBron James readily admits to being thrifty. Despite an estimated net worth of $400 million, James was recently quoted as saying "I'm not turning on data roaming, I'm not buying no apps, I still got Pandora with commercials." With that attitude, James is certain to avoid lists like Time Inc.’s “10 Insanely Rich Athletes Humbled By Financial Ruin”.
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