The motorcycle manufacturer has released its annual report and is looking for a new CEO.
Harley-Davidson retracted its annual sales and profit projection, citing uncertainties around tariffs and the overall state of the economy.
The motorcycle manufacturer reported on Thursday that its worldwide motorcycle shipments fell 33% in the first quarter due to a slowdown in demand. According to the firm, high borrowing rates and low customer confidence caused a 21% decline in global retail motorbike sales from the previous year.
As Harley fights an activist investor who wants to change the company’s board, sales and profits are declining. Harley is implementing supply-chain mitigation, dealer inventory reduction, and other measures in response to the challenging economic climate, according to Chief Executive Jochen Zeitz.
Even still, Harley’s profits above Wall Street’s forecast. The business made $133 million, or $1.07 per share, as opposed to $235 million, or $1.72 per share, during the previous year. According to FactSet, analysts anticipated 78 cents per share.
Bicycle and accessory sales generated $1.08 billion in the first quarter, a 27% decrease from $1.48 billion. According to a FactSet survey, analysts anticipated $1.11 billion.
Early trading saw a 4.2% increase in Harley’s shares.
After Zeitz announced his retirement plans in April, Harley is looking for a new CEO. Zeitz contributed to increasing Harley’s profit during his five years on the position, but sales have been falling as the company tries to appeal to a younger generation of riders.
According to a Wall Street Journal article from April, investment firm H Partners has asked Harley shareholders to remove Zeitz and two other longstanding directors from the company’s eight-member board at the annual meeting in mid-May. According to the company, the three are to blame for subpar work and “cultural depletion.”
Harley claims that H Partners, whose former board representative resigned before to starting the proxy battle, is attempting to dictate the CEO’s replacement out of spite after its nominee failed to receive enough board support.
Harley did not discuss the tension in the boardroom during a conference call with analysts on Thursday. Regarding Harley’s first-quarter earnings, H Partners chose not to comment. According to Zeitz, the business intends to launch a more profitable and reasonably priced motorcycle with a smaller engine the following year. The CEO added that Harley would not increase its stake in its electric motorcycle offshoot, LiveWire.
Harley has come under fire from H Partners for the financially unsuccessful LiveWire project and what it described as a dearth of good entry-level alternatives.
According to executives, Harley is not thinking about selling its financing division, but it is assessing potential outside investment in the market.
Despite the fact that the majority of its suppliers are located in the United States, Harley anticipated that its tariff expense might reach $175 million this year. The majority of that, according to the corporation, was caused by components imported from China, where there is a 145% tariff.
Zeitz claimed that European trade restrictions would hinder sales abroad, even while tariffs would provide the company’s U.S. operations a competitive edge.
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Daisy Morgan is a dedicated business journalist known for her insightful coverage of global economic trends and corporate developments. With a career rooted in a passion for understanding the intricacies of the business world, Daisy brings a unique perspective to her writing, combining in-depth research with a knack for uncovering compelling stories. Her articles offer readers a comprehensive view of market dynamics, entrepreneurship, and innovation, aiming to inform and inspire professionals and enthusiasts alike.
