Harley-Davidson, Inc. first-quarter 2015 diluted earnings per share increased 5 percent to $1.27 compared to diluted EPS of $1.21 in the year-ago period. Net income was $269.9 million on consolidated revenue of $1.67 billion compared to net income of $265.9 million on consolidated revenue of $1.73 billion in last year’s first quarter. Revenue in this year’s first quarter was down from the year-ago period primarily on unfavorable foreign currency exchange and slightly lower motorcycle shipments.

“While the first quarter had its share of headwinds, our business is strong and we remain clearly focused on executing Harley-Davidson’s strategy to be customer-led in everything we do, grow our reach among new customers in the U.S., grow internationally and continuously improve every aspect of our operations,” said Keith Wandell, Chairman, President and CEO of Harley-Davidson, Inc. “We continue to manage Harley-Davidson for long-term performance from a position of great strength.”

Retail Harley-Davidson Motorcycle Sales

In the first quarter of 2015, worldwide retail sales of new Harley-Davidson motorcycles decreased 1.3 percent compared to last year’s first quarter. Dealers worldwide sold 56,661 new Harley-Davidson motorcycles in the first quarter of 2015 compared to 57,415 motorcycles in the year-ago quarter.

In the U.S., dealers sold 35,488 new Harley-Davidson motorcycles in the quarter, down 0.7 percent compared to sales of 35,730 motorcycles in the year-ago period. The company believes increased, aggressive competitive motorcycle discounting was among the factors adversely affecting first-quarter U.S. retail Harley-Davidson sales.

In international markets, dealers sold 21,173 new Harley-Davidson motorcycles during the quarter compared to 21,685 motorcycles in the year-ago period, with unit sales down 1.1 percent in the Asia Pacific region and 5.6 percent in the EMEA region and up 0.3 percent in the Latin America region and 5.7 percent in Canada.

“Given the first-quarter retail results, and ongoing, increased levels of aggressive competitive discounting in the U.S. which we expect will continue, we are taking the precautionary step of lowering our estimated growth rate for full-year motorcycle shipments in order to manage supply in line with demand and protect the premium nature of our brand,” said Wandell.

The company now expects motorcycle shipments to grow approximately 2 percent to 4 percent in 2015, compared to its previous forecast of approximately 4 percent to 6 percent shipment growth.

“Despite the current headwinds, we believe Harley-Davidson’s brand fundamentals remain strong,” said Wandell. “Our brand is among the most iconic in the world and our motorcycles continue to generate great interest. Dealer sales of the newest Project Rushmore motorcycles – including the Road Glide and Low models — were robust in the first quarter, as were sales of the Harley-Davidson Street 750 and 500 motorcycles in international markets. Sales in many of our emerging markets were up significantly in the quarter, including India, China and Mexico. And we continue to grow our network of nearly 1,500 independent dealerships in more than 90 countries globally.

“We also recently received the annual data on our U.S. demographic market share, which we believe demonstrates the strength of the brand long-term,” said Wandell.

In 2014, Harley-Davidson was the number-one seller of new on-road motorcycles to U.S. young adults ages 18-34, women, African-Americans, Hispanics and Caucasian men ages 35-plus for the seventh straight year. In the 601cc-plus U.S. on-road market, Harley-Davidson sold more than three times as many new motorcycles to young adults ages 18-34, more than seven times as many to women, more than five times as many to Hispanics, more than five times as many to African Americans and more than nine times as many to Caucasian men ages 35-plus as the nearest competitor. Data are based on Harley-Davidson’s analysis of Polk U.S. new motorcycle registration data from IHS Automotive for CY2008-2014.

Harley-Davidson Motorcycles and Related Products Segment Results

Operating income for the Motorcycles and Related Products segment (the Motorcycles segment) was $345.5 million in the first quarter of 2015 compared to operating income of $347.7 million in the year-ago period. Operating income in the quarter was primarily impacted by unfavorable foreign currency exchange, partially offset by strong productivity gains.

Revenue from sales of motorcycles to dealers and distributors was $1.26 billion, compared to revenue of $1.31 billion in the year-ago period. The company shipped 79,589 motorcycles worldwide during the quarter compared to shipments of 80,682 motorcycles in the year-ago period.

Revenue from motorcycle parts and accessories was $183.9 million during the quarter compared to $198.1 million in the year-ago period. Revenue from general merchandise, which includes MotorClothes apparel and accessories, was $66.4 million compared to $64.1 million in the year-ago period.

Gross margin for the Motorcycles segment was 39.1 percent in the first quarter of 2015 compared to 37.7 percent in the first quarter of 2014. First-quarter operating margin for the Motorcycles segment was 22.9 percent compared to operating margin of 22.1 percent in last year’s first quarter.

Guidance

Harley-Davidson is revising its full-year guidance for motorcycle shipments, reflecting its commitment to manage supply in line with demand, and now expects to ship 276,000 to 281,000 motorcycles to dealers and distributors worldwide in 2015, an approximate 2 percent to 4 percent increase from 2014. The company previously had provided full-year shipment guidance of 282,000 to 287,000 motorcycles. In the second quarter, the company expects to ship 83,000 to 88,000 motorcycles, compared to 92,217 motorcycles shipped in the year-ago period. The company continues to expect full-year 2015 operating margin of approximately 18 to 19 percent for the Motorcycles segment. The company also continues to expect 2015 capital expenditures for Harley-Davidson, Inc. of $240 million to $260 million.