Harley-Davidson Reports Q3 2010 Results
Sales down but income is up thanks to HDFS
“Despite the continued challenges in the economy, we are making solid, steady progress at transforming our business,” says Keith Wandell, president and chief executive officer of Harley-Davidson, Inc. “With our strategic focus on future growth initiatives and continuous improvement, we are positioning Harley-Davidson to succeed at today’s volumes, as well as to grow and restore greater profitability longer term.”
Third quarter motorcycle sales dropped 7.7% worldwide including a 9.4% decrease in the United States compared to the same quarter in 2009. Harley-Davidson sold 58,849 motorcycles in the three months ending Sept. 30, 2010, compared to 63,729 units sold the previous year.
U.S. sales totaled 40,459 units, a decrease from 44,650 units. Harley-Davidson did continue to make gains in Europe, Africa and the Middle East, selling 8,914 units in those regions, up from 7,999 units sold in the same quarter of 2009.
“The Harley-Davidson brand has remarkable strength globally. Few products or brands rank as highly in terms of awareness and affinity on the part of customers and non-customers alike. We have continued to gain market share in the U.S. and Europe,” says Wandell. “Since 2008, we also have been the U.S. leader in new motorcycle sales to young adults for the entire on-road motorcycle category. Going forward, we will continue to build on this brand strength and leadership position.”
Retail sales generated $101.5 million in income, a 22% drop from the $130.6 million reported in the third quarter of 2009. That decrease was offset by $50.8 in income from Harley-Davidson Financial Services, a big turnaround from a $31.5 million loss in 2009. As a result, Harley-Davidson reported a net income of $88.8 million over the third quarter compared to $26.5 million in 2009.
Harley-Davidson is adjusting its 2010 shipment totals, narrowing its estimate to 207,000-212,000. That translates to fourth quarter shipments of 41,000-46,000 units.
Through its restructuring efforts, Harley-Davidson estimates $150 million to $165 million in savings for 2010, with annual ongoing savings of $290 million to $310 million in 2013. That estimate includes savings from new labor agreements with unions in Wisconsin which come into effect in 2012.
“The results we are seeing stem directly from the actions we are taking to restructure the business, driven by the creativity and extraordinary efforts of our entire team,” says Wandell. “From manufacturing and product development to marketing, international operations, dealer capabilities and across the entire enterprise, we are transforming Harley-Davidson with a focus on delivering unparalleled customer experiences and value.”