Strong international sales drive robust Q1 for H-D

Publish Date: 
Apr 22, 2014
By Vince Guerrieri

MILWAUKEE, Wisc. – Harley-Davidson executives said motorcycle shipments were up 7.3 percent worldwide in the first quarter of 2014, led by strong international sales, particularly of the new Street.

Harley-Davidson President/Chairman/CEO Keith Wandell said during an earnings call Tuesday that new motorcycle sales were up year-over-year by 3 percent in the United States, but up 10.9 percent internationally for a global increase of 5.8 percent year over year. Overall, Harley-Davidson sold 57,415 motorcycles during the first quarter.

International sales were paced by a 25 percent increase in Asia, which executives attributed to buyers in Japan making purchases before a consumption tax increase took effect April 1. Harley-Davidson has stated a goal of 150 new international dealers, and have gotten 120 new ones – including two in the first quarter – since 2009.

The slow U.S. sales were attributed to the nasty winter. Harley-Davidson shipped 80,602 bikes in the first quarter, at the high end of their estimates of 75,000-81,000. Touring bikes lead the way, with 44.8 percent shipped, followed by 36.1 percent in custom bikes and 19.1 percent in Street/Sportster models.

The Street bikes were introduced as an effort to get younger people riding. Sales of the Street 750 – the motorcycle of choice for Captain America in “Captain America: The Winter Soldier” – were particularly strong in India, and Street 500s were put into Riding Academy Fleets at U.S. dealers.

The temporary discontinuation of Road Glide models was also given as a reason for slow U.S. sales in the first quarter. Road Glide models accounted for about 10 percent of U.S. retail sales in Q1 of 2013. The Motor Co. also attributed the lack of Road Glide models for a slight decline in U.S. market share for bikes of more than 600 cc, from 56.1 percent in 2013 Q1 to 56 percent in 2014 Q1.

Harley-Davidson retains an 11 percent market share in Europe for bikes of more than 600 cc.

Overall, revenue was up 11.1 percent to $1.57 billion, and Harley stock price rose $4.33 following the earnings call, to $71.87 per share.