Harley-Davidson Announce 2018 Q2 Earnings

Troy Siahaan
by Troy Siahaan

Harley-Davidson today announced its net income for Q2 2018 at $242.3 million, a drop of 6.4% compared to this time last year. The news comes on the heels of the European Union’s announcement earlier this year that it would be imposing tariffs on certain U.S. products – Harley-Davidsons included – in retaliation for President Trump’s tariffs on imported steel and aluminum. Harley-Davidson also reports revenue at $1.71 billion, down 2.9%.

Globally, worldwide retail sales are down 3.6% compared to last year, though the sequential sales rate is improved compared to Q1 2018. In the U.S., Harley-Davidson reports new motorcycle retail sales are down, which reflects an ongoing trend throughout the industry. Interestingly, The Motor Company is seeing an uptick in sales across western Europe, specifically behind the Softail line. Sales are also slightly up in countries like Brazil and Mexico. Meanwhile, apart from the slump in sales in the U.S., sales remain soft and/or stagnant across Japan, Australia, and Canada.

Harley is crediting the Softail line for helping with European sales.

Looking long term, Harley-Davidson’s objective is to have international sales make up half of its annual volume by 2027. To do this, it’s looking to expand its dealer network, convert riders currently on other brands, raise awareness through apparel, and leverage the lower pricing afforded to them via its Thailand operations.

While Harley-Davidson’s total revenue is down, the company isn’t feeling quite the same hit it would have a year ago thanks to its tax rate also decreasing (24.1% vs. 34.4% YTD) as a result of 2017 tax legislation under President Trump.

Lastly, Harley-Davidson is planning an announcement on July 30, 2018 in which it will reveal its accelerated strategy to build the next generation of Harley-Davidson riders. This three-pronged approach includes broader access to the brand through a multi-channel retail experience, stronger dealers to welcome new customers to the Harley-Davidson family, and of course new products to keep current riders engaged and inspire new riders to join the brand. This keeps with the company’s objectives of building 2 million new riders in the U.S. and launching 100 new “high impact” motorcycles by 2027.

Harley’s vision to introduce 100 new “high impact” models by 2027 is ambitious, but models like the all-electric Livewire could lead the way.

What those new models may be is anyone’s guess at this point, though Harley CEO Matt Levatich gave hints that the brand may reach in new directions as he stated, “Our plan will redefine existing boundaries of our brand – reaching more customers through new types of products and channels and doing so in a way that reinforces all we stand for as a brand and as a company. We’re out to secure the legacy of Harley-Davidson freedom for the next generations of riders.”

Troy Siahaan
Troy Siahaan

Troy's been riding motorcycles and writing about them since 2006, getting his start at Rider Magazine. From there, he moved to Sport Rider Magazine before finally landing at Motorcycle.com in 2011. A lifelong gearhead who didn't fully immerse himself in motorcycles until his teenage years, Troy's interests have always been in technology, performance, and going fast. Naturally, racing was the perfect avenue to combine all three. Troy has been racing nearly as long as he's been riding and has competed at the AMA national level. He's also won multiple club races throughout the country, culminating in a Utah Sport Bike Association championship in 2011. He has been invited as a guest instructor for the Yamaha Champions Riding School, and when he's not out riding, he's either wrenching on bikes or watching MotoGP.

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  • Phony account Phony account on Jul 25, 2018

    Maybe Harley should consider fixing the significant transmission oil transfer issues with the new M8 as well as the sumping that they can never seem to get right... They MIGHT sell a few more units. Newsflash to the leadership at HD, you can't hide and cover this stuff up and tell people it's not happening. Also, HD might want to consider telling their dealers out there that still believe it's 1999-2000 and are jacking up the prices of the bikes to cut the crap... You're having a hard time moving units yet you want to gouge the customer beyond MSRP???

    • See 1 previous
    • Mad4TheCrest Mad4TheCrest on Jul 26, 2018

      Price gouging at Japanese brand dealers? Maybe you've been visiting crappy dealers? And as for Euro bike dealers, I've seen great ones and also crappy ones that add $5k to a limited model just because they can. It all depends on the individual dealer; it's not a conspiracy.

  • Lennon2017 Lennon2017 on Jul 27, 2018

    If Harley is doomed, which I don’t believe it is, that will make competitors also quake in their Kevlar. I’ve said this many times. The sales of motorcycles in the western world are so small compared to where they ought to be according to any motorcycling enthusiast, and any decline in the industry is as mystifying as it is unfortunate. How could more people NOT be buying bikes?? goes the thinking. They’re awesome. C’mon cagers, the wind blast is wondrous! It’s a bummer that these sales declines come just as the Softail line has been updated, and I would guess that the sportster is going to experience a similar powerplant/chassis change. When boomer harley owners finally retire and don’t just die working 60-hour weeks for lower and lower wages, maybe millennials will find the scrip. Maybe elder Americans should also purposely patronize the hipster businesses they scoff at for the sake of the Milwaukee Eight. Economics. They’re so easy, eh?

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