The heavy weight motorcycle manufacturer said its revenue from motorcycles and related products increased by 17 percent, from $1.34 billion during the second quarter a year ago, to the current $1.57 billion revenue. The result is lower than the $1.64 expectations of analysts. The company’s global retail sales result for new Harley-Davidson motorcycles climbed by 2.8 percent during the current quarter.
Keith Wandell, chief executive officer of Harley-Davidson, said they remain cautious with their global retail sales expectations, due to the current uncertainties in the economy, particularly the in the euro zone. According to him, demand in the southern part of Europe is weak. The company’s unit sales in Europe declined by 6.4 percent. Its sales declined in Southern Europe and United Kingdom.
The company also perceived a slowing demand in Northern Europe, and consumers in the United States are becoming more cautious in their spending habits, and worried about the upcoming presidential election.
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Wendell said, “There had been negative turns here in consumer confidence. People are concerned about the election and what’s going to happen with the economy, and so I think people are becoming a little more conservative in the last several months.”
Apart from the challenges in Europe and the United States, the company also faces strong competition from its rivals, including Honda Motor Co Ltd (TYO:7267) (NYSE:HMC), Suzuki Motor Corp. (TYO:7269), Yamaha Motor Co., Ltd. (TYO:7272), and Volkswagen AG (PINK:VLKPY) (PINK:VLKAY)’s Ducati motorcycle.
According to John Olin, chief financial officer of the company, Harley-Davidson’s strongest price competitor is Honda.
The company said its full year target will remain steady, as it will ship around 9 percent to 17 percent fewer units during the next quarter as the company renovates its factories in York Pennsylvania and Kansas City. The company expects to ship a total of 51,000 to 61,000 motorcycles for the third quarter.
Harley-Davidson’s expectations for 2012 remain positive with a 5 percent to 7 percent increase in motorcycle shipments.