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Harley-Davidson asks for patience, expects tough market in 2019

said that US motorcycle sales would remain weak by 2019, as business leaders are waiting for the results of a…

said that US motorcycle sales would remain weak by 2019, as business leaders are waiting for the results of a new growth strategy focused on younger riders.

Leaders demanded patience Tuesday when Harley rolls out new models and extends programs to increase ridership, especially among younger urban residents. Harley drives this new group of potential customers to try to compensate a core customer base of aging riders who buy fewer new motorcycles. Harley is on course this year to sign his fourth straight year of lower sales in the United States, the largest market.

“It’s not a quick solution,” said Chief Executive Matt Levatich analyst during a conference call. “We have a tough couple of years to come through until some of these products start to be tails for the company.”

In another issue that will weigh on the company’s earnings in the quarter, Harley announced Tuesday’s 238,300-model motorcycles worldwide because of a clutch problem. The company expects to charge USD 35 million in connection with the revocation.

Company shares were recently 3.7% at $ 37.27

Harley this summer revealed plans to introduce 1

6 new motorcycle models in 2022. Many of the new bikes will be directed to parts of the motorcycle market that Harley currently does not make serving, including electric motorcycles, racing sports bikes and touring motorcycles that can work on paved and unpaved roads. Harley estimates that the new positions will increase as much as $ 1.5 billion to annual revenues over five years.

Harley reported that retail sales of motorcycles in the United States dropped 13% in the third quarter from one year earlier to 36,220 motorcycles. During the first three quarters of the year, sales decreased by 10% compared with the corresponding period last year.

“We are expecting a continued challenge in the US motorcycle industry next year,” said chief finance officer John Olin.

Harley said that the charges could cost the company about 120 million dollars next year, and most of the EU tariffs on US-based bicycles exported to Europe. The company plans to move the production of motorcycles intended for the European market from the United States to avoid EU tariffs, which earlier this year were charged against US tariffs for European steel and aluminum tariffs this year. The company expects the tariffs to cost $ 43 million to $ 48 million this year.

The Milwaukee-based company’s Q3 earnings hit revenue and profit expectations. Rising wholesale of its pricier motorcycles helped drive a 17% increase in turnover during the quarter.

The company sent 51% more touring bikes, usually bola gets the most expensive models. The shipment of cheaper cruise-type bikes dropped 7% from a year ago. The favorable mix of higher margin cycles drove Harley’s operating margin for the quarter to 5.8% from 1.8% last year. The company said it still expects wholesale motorcycle shipments of 231,000 to 236,000 years, unchanged from previous guidance.

Harley achieved a profit of $ 113.9 million or 68 cents per share in the third quarter, from $ 68 million or 40 cents a share, a year earlier. After excluding some manufacturing costs, Harley said that it received 78 percent, compared to 53 percent, a share predicted by analysts. Revenue from motorcycles and related products amounted to $ 1.12 billion. Analysts had predicted $ 1.07 billion.

Write to Bob Titles at [email protected] and Micah Maidenberg at [email protected]

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