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Harley-Davidson Delivers Strong 1st Quarter Results

Harley-Davidson, Inc. reported first quarter results.

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“I am very pleased with the pace of recovery that we have seen across our business, as demonstrated by the strong financial results this quarter. The actions we have taken to reshape the business are having a positive impact on our results, especially for our most important North American region,” said Jochen Zeitz, chairman, president and CEO, Harley-Davidson. “We can see the initial signs of consumer excitement and optimism returning and I am confident Harley-Davidson in 2021 is a significantly leaner, faster, and more efficient organization which is ready to win and successfully deliver on our five-year Hardwire strategy, as the most desirable motorcycle brand in the world.”


First Quarter 2021 Highlights, Results and Related Guidance

  • Delivered Q1 GAAP diluted EPS of $1.68, up $1.23 over Q1 2020
  • Motorcycles and Related Products (Motorcycles) segment revenue up 12% amid strong retail demand for Touring motorcycles
  • Significantly improved Motorcycles segment gross margin and operating margin driven by favorable mix following the Rewire product portfolio adjustments, lower sales incentives and reduced SG&A
  • Financial Services segment Q1 2021 operating income growth of $96 million over Q1 2020 driven by a favorable adjustment to the provision for credit losses
  • Increased Q1 cash flow from operations to $163 million, up $171 million over Q1 2020
  • Increasing 2021 full-year guidance on Motorcycles segment revenue, Motorcycles segment operating margin assuming the company is able to mitigate additional EU tariffs, and Financial Services segment operating income

Consolidated revenue was up 10% in the first quarter over Q1 2020. Bottom-line results reflect Q1 significant net income improvement with strong results in both the Motorcycles and the Financial Services segments.


Global retail motorcycle sales in the first quarter were up 9%, driven by very strong Q1 U.S. retail growth over Q1 prior year. EMEA retail sales declines were impacted by continued COVID lockdowns, the company’s decision not to continue selling Street or Sportster motorcycles in Europe and shipping delays brought on by the pandemic. In Latin America, retail sales were impacted by the reduction in dealers and pricing actions across the portfolio, which were executed as part of the Rewire strategy.

Revenue from the Motorcycles and Related Products segment was up during the first quarter primarily driven by a 3% increase in wholesale shipments and a favorable mix of Touring motorcycles. First quarter global retail motorcycle sales were up 9%, driven by a 31% retail growth in the United States.


Parts and Accessories revenue was mostly in-line with Motorcycles revenue growth while General Merchandise was up 2% over Q1 2020.

First quarter gross margin was up 5.1 percentage points to Q1 prior year while first quarter operating margin finished up 10.8 percentage points over Q1 prior year due to stronger mix, the near elimination of sales incentives and lower spending versus prior year.

Financial Services segment operating income was up significantly over prior year in the first quarter, primarily driven by a $102 million decrease in the provision for credit losses.

Harley-Davidson generated $163 million of cash from operating activities during Q1 2021, $171 million favorable to Q1 2020. Cash and cash equivalents were $2.3 billion at the end of the first quarter, up $856 million to the end of the prior year first quarter.


Tax Rate – The company’s first quarter effective tax rate was 24%.

Dividends – The company paid cash dividends of $0.15 per share in Q1 2021.

2021 Outlook

As a result of its Q1 performance, for the full-year 2021, the company now expects:

  • Motorcycles segment revenue growth to be 30% to 35%, an increase from the previously communicated growth range of 20% to 25%.
  • Motorcycles segment operating income margin of 7% to 9%, which is 200 basis points better than previous guidance. Assuming the company is not able to mitigate the additional EU tariffs to any extent in 2021, the company expects the operating income margin would be 5% to 7%, in line with original guidance.
  • Financial Services segment operating income growth of 50% to 60%, an increase from the previously communicated range of 10% to 15%.

Additionally, for the full-year 2021, the company continues to expect:

  • Capital expenditures of $190 million to $220 million.

Cash allocation priorities remain to first fund growth through The Hardwire initiatives, then to pay dividends and, given the company’s continued strong cash position, the company will be evaluating share repurchases and may choose to repurchase shares.

Link: Harley-Davidson

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