MILWAUKEE, Wis. - Project Rushmore delivered monumental sales and earnings for Harley-Davidson in the third quarter, with worldwide retail sales of new motorcycles up 15.5 percent, including a 20.1 percent increase in the U.S., compared to last year's Q3.
Although it's too early to tell what the most recent recall of roughly 29,000 2014 models will have on customer perception and future sales, one analyst said the impact should be minimal.
"Recalls are common, so I think this will pass without too much impact. Harley will take a small financial and PR hit, but Harley riders really seem to like the new Rushmore bikes. By this time next year, I doubt anyone will be talking about the recall," said Craig Kennison, director of research operations at R.W. Baird.
"The story on the quarter is the 20 percent growth in U.S. retail driven by interest in the new bikes," Kennison added.
The Motor Co. said it expects to ship 259,000 to 264,000 motorcycles to dealers and distributors worldwide in 2013.
"Harley-Davidson had a great third quarter, with strong financial performance and retail sales growth," said Wandell, during the call. "Rider response to the 2014 motorcycles we introduced Aug. 18 was extremely positive. In fact, initial retail sales of the new Project Rushmore motorcycles sparked the largest year-over-year new model year sales increase in two decades. '
In the U.S., dealers sold 48,529 new motorcycles in the quarter, up 20.1 percent compared to sales of 40,402 motorcycles in the year-ago period.
Dealers worldwide sold 70,517 new motorcycles in the third quarter of 2013, compared to 61,053 motorcycles in the year-ago quarter. In international markets, dealers sold 21,988 new motorcycles during the third quarter, up 6.5 percent compared to 20,651 motorcycles in the year-ago period, with unit sales up 10.0 percent in the Asia Pacific region, 1.6 percent in the EMEA (Europe, Middle East, Africa) region, 15.6 percent in the Latin America region, and 7.0 percent in Canada.
Retail sales were driven by strong double-digit growth in the sale of touring motorcycles following the third-quarter launch of the company's Project Rushmore line of revamped motorcycles.
Through nine months, dealers sold 214,964 new motorcycles worldwide, compared to 206,444 motorcycles in the year-ago period, with retail unit sales up 4.1 percent in the U.S., 11.3 percent in the Asia Pacific region, 20.1 percent in the Latin America region and 3.7 percent in Canada, and down 2.2 percent in the EMEA region, compared to the first nine months of 2012.
Revenue from motorcycles grew 10.7 percent to $857 million, compared to revenue of $774 million in the year-ago period. The company shipped 54,025 motorcycles to dealers and distributors worldwide during the quarter, in line with shipment guidance and a 2.3 percent increase compared to shipments of 52,793 motorcycles in the year-ago period.
Revenue from motorcycle parts and accessories was $250.2 million during the quarter, up 7 percent, and revenue from general merchandise, which includes MotorClothes apparel and accessories, was $66.1 million, down 12.6 percent, compared to the year-ago period.
Through nine months, the company shipped 213,853 motorcycles to dealers and distributors worldwide, a 6.6 percent increase compared to the year-ago period. Nine-month revenue from motorcycles grew 9.8 percent to $3.29 billion, revenue from parts and accessories increased 0.8 percent to $703.8 million and revenue from general merchandise decreased 2.4 percent to $220 million compared to the first nine months of 2012. (continued)