Harley-Davidson reported a net profit of $269.9 million over the first quarter of 2015. The first quarter results marked a slight improvement on the $265.9 million in net income reported in the same period last year. Revenue from motorcycle sales were down, however, due to unfavorable currency exchange rates and a slight decrease in shipments.
Delivering the first quarter report is one of the final tasks of outgoing Harley-Davidson Chief Executive Officer Keith Wandell who is retiring on May 1. He will be succeeded by current Chief Operating Officer Matt Levatich.
“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,” says Wandell. “We continue to manage Harley-Davidson for long-term performance from a position of great strength.”
Harley-Davidson reported sales of 56,661 motorcycles over the first quarter, down from 57,415 motorcycles sold in the same period in 2014. Harley-Davidson reports strong worldwide sales for the Road Glide, Ultra Low, Ultra Limited Low, CVO Street Glide, Freewheeler and Street models.
The domestic market continues to form the bulk of Harley-Davidson’s sales, with Americans picking up 35,488 motorcycles over the quarter, just a bit less than the 35,730 sold last year. Harley-Davidson attributes the decrease to poor riding weather and a strong surge in last year’s sales due to the introduction of the company’s Project Rushmore initiative. Though overall U.S. sales were down, Harley-Davidson reports strong demand for the Road Glide and the Street.
Sales were also down slightly in Europe, the Middle East and Africa. Harley-Davidson saw a significant drop in Japanese sales, selling just 1,972 motorcycles compared to 2,893 motorcycles in the same quarter of 2014. Most of that decrease was mitigated by increased sales elsewhere in Asia including China and India which reported record highs for Harley-Davidson.
Motorcycle produced $1.26 billion in revenue over the first quarter, down 3.8% from last year. Harley-Davidson also reported a 7.2% drop in sales revenue from parts and accessories while merchandise sales increased by 3.6%. Overall, Harley0-Davidson reported an operating income of $345.4 million from product sales. Harley-Davidson Financial Services added another $64.7 million in operating income.
For the rest of 2015, Harley-Davidson lowered its sales forecast, now calling for a 2-4% growth compared to the previously forecast 4-6% growth. The company now expects to ship 276,000 to 281,000 motorcycles in 2015, compared to the previous expectations of 282,000 to 287,000 motorcycles.
“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,” says Wandell.