Shares of iconic U.S. motorcycle manufacturer Harley-Davidson [HOG] fell sharply, and then recovered, Tuesday after the company reported a $92 million loss for the quarter, which ended on June 30. This is the company’s first quarterly loss in more than a decade. Harley also recorded a loss of 60 cents consistent with a consistent percentage and sales fell 27% in the quarter, according to figures published by the company. In 2019, H-D reported earnings of $195.6 million and $1.23 consistent with a consistent percentage in the same quarter.
The news, well below the forecasts of profit analysts of between 10 and 18 cents consistent with the share, is the latest in a series of reversals for the formerly dominant motorcycle manufacturer, who has noticed that a larger festival and other points eat up sales and market share. . Production disruption due to coronavirus and sharp drops in sales figures in foreign market markets, 51% less in Latin American history, did not matter. Harley said this year will no longer supply monetary direction to investors due to the market placement effects of the still-active coronavirus outbreak.
There was also a change in control of the company when CEO Matt Levatich left the company earlier this year and board member Jochen Zeitz became CEO. Other senior positions have also experienced a rotation, and Zeitz is recently overseeing a 14% relief in Harley’s overall workforce, resulting in a loss of approximately 700 jobs across the company.
According to Zeitz, other adjustments are being made, adding a refocus on commodities, 30% relief in the style range, withdrawals from low-performing markets and a renewed concentrate to get rid of production inefficiencies. When Zeitz took office in early March, he said the company made quick adjustments as a component of a “Rewire” plan. Now, press documents released Tuesday imply that a more detailed five-year plan called Hardwire is being prepared, and the top points are expected to be published in the fourth quarter.
The restart of Hardwire and even the call of the plan led industry observers (and motorcycle buyers) to wonder whether the new recent models that took shape under former CEO Levatich, adding the revolutionary (but expensive) all-electric LiveWire motorcycle, will continue production or even succeed in the market at all.
Arguments over the cause of Harley’s recent decline are many and varied, from Millenial’s apparent disinterest in motorcycles (and even cars) due to other transportation options to Harley’s key demographic – older males – ageing out of the marketplace, to increased competition from other bike makers in the heavyweight motorcycle market, including a resurgent Indian, which is operated by Polaris. And while the overall motorcycle market has seen ridership fall in general, some brands, including Indian, Britain’s Triumph and Ducati out of Italy have seen positive sales numbers, typically before the COVID-19 outbreak, while Harley’s sales continued to slip. But Zeitz, who turned around nearly-defunct sports apparel brand Puma in the 1990s believes that better days – and more buyers – lay ahead as new riders “age into the market.”
The challenge will be to offer those potential riders a compelling explanation of why buying a Harley in the age of Uber, Lyft and a myriad of new urban transportation options, adding a renewed interest in cycling, partly driven by the sudden popularity of electric motorcycles. – a segment of Harley’s market said he planned to return when the LiveWire device was released. We’ll know more about Zeitz’s plans this fall.
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Writer, photographer and generation evangelist. I am also an avid motorcyclist, enthusiast and chronicler of the continuous evolution of mobility technologies.