Harley-Davidson, Inc. reported its first quarter 2019 results. Company actions resulted in earnings per share and retail sales finishing stronger than expected during the quarter. The company’s More Roads to Harley-Davidson accelerated plan for growth continued to progress and delivered results.

First quarter 2019 highlights:

• GAAP diluted EPS of $0.80 per share, ahead of company expectations
• Encouraged by U.S. retail sales performance; Harley-Davidson U.S. market share up
• Global dealer inventory down, well positioned for spring selling season
• Intensified brand focus; hired President of Harley-Davidson Brand
• Acquired StaCyc, a producer of electric-powered two-wheelers for kids
• Broadened reach with new Electra Glide Standard at $18,999 U.S. MSRP
• Manufacturing optimization remained on-track
• Thailand manufacturing strategy accelerated retail sales growth in ASEAN emerging markets
• Increased dividend 1.4 percent, repurchased $52.6 million of shares

Harley-Davidson worldwide retail sales decreased 3.8 percent in the first quarter.  International retail sales were down 3.3 percent. U.S. retail sales were down 4.2 percent in the first quarter driven by continued weak industry sales which were down 4.7 percent. First quarter worldwide retail sales were impacted by the limited availability of street motorcycles due to the recall H-D announced in January.

“We are acting with agility and discipline to take full advantage of rapidly evolving global markets. Harley-Davidson’s U.S. market share growth and retail sales performance in the first quarter are further evidence of the effects we are having as we continue to implement and dial-in our More Roads efforts,” said Matt Levatich, president and chief executive officer, Harley-Davidson, Inc. “We are driven by our un-paralleled rider focus and deep analytics that are guiding our efforts today and into the future. We, along with our dealers, are determined to lead and stimulate global industry growth.”

Strategy to Build the Next Generation of Riders
Harley-Davidson’s strategic objectives through 2027 are to: build 2 million new riders in the U.S., grow international business to 50 percent of annual volume, launch 100 new high impact motorcycles and do so profitably and sustainably.

The More Roads to Harley-Davidson accelerated plan for growth is aligned with the company’s strategy to deliver sustainable growth and build the next generation of riders by delivering exciting products in existing and new spaces, broader access to Harley-Davidson and an optimized customer experience through an even stronger dealer network. The company plans to maintain its current investment and return profile and capital allocation strategy, while it funds strategic opportunities expected to drive revenue growth and expand operating margin through 2022.

During the quarter, Harley-Davidson made further progress on its More Roads plan, including appointing its first-ever brand president, a move that positions the company to fully engage the power of the brand as a catalyst to achieve its strategy and long-term objectives. The company also expanded its electric portfolio with the acquisition of StaCyc, a maker of electric two-wheelers for kids. During the quarter, the company and its dealers continued preparations to launch LiveWire, Harley-Davidson’s first electric motorcycle, later this year.

“In the short eight months since we announced our More Roads plan, we continue to accelerate our progress to build the next generation of Harley-Davidson riders,” Levatich said. “During the first quarter we intensified our march by investing in our future and adding capabilities that we’re confident will inspire riders today and for generations to come.”

For the full-year 2019, the company continues to expect:

• Motorcycle shipments to be approximately 217,000 to 222,000 motorcycles. In the second quarter, the company expects to ship approximately 65,500 to 70,500 motorcycles
• Motorcycles segment operating margin as a percent of revenue to be approximately 8.0 to 9.0 percent
• Financial services segment operating income to be down year-over-year
• Effective tax rate of approximately 24.0 to 25.0 percent
• Capital expenditures of $225 million to $245 million including approximately $20 million to support manufacturing optimization

Link: Harley-Davidson