Harley-Davidson Inc. is one of those companies that branding gurus dream of. Mention the name Harley-Davidson and images of Peter Fonda in Easy Rider and the open road come to mind. Even folks who can't afford the throaty-throttled bikes don Harley apparel in hope of capturing the allure of the tough, American-made bikes.

And according to analysts, therein lies the trouble.

Despite a great third quarter that ended Sept. 25, 2005 -- the company posted a 24.7% increase in earnings per share and a 15.7% increase in net income -- Wall Street predicts that Harley-Davidson is entering a maturity cycle.

In a Forbes magazine article dated Oct. 13, Scott Barry, an analyst for Credit Suisse First Boston, predicts business won't remain brisk forever. In the article, Barry pointed to the hype surrounding the company's 100th Anniversary [2003], easy credit availability and relatively high levels of discretionary income, as prime reasons for the late-summer buying surge.

If the analysts are right about the future of discretionary income, would-be Harley owners will have to be content with Harley garb instead.

Harley-Davidson Inc. At A Glance Harley-Davidson Inc. Milwaukee Primary Industry: Motor Vehicles Number of employees: 9,580 2004 In Review Revenue : $5.3 billion Profit Margin: 16.7% Sales Turnover: 1.0 Inventory Turnover: 14.9 Revenue Growth: 8.5% Return On Assets: 18.1% Return On Equity: 30.1%

Even newly appointed CEO Jim Ziemer, who took the lead position after Jeffrey L. Bleustein retired in April 2005, notes the need for conservative growth projections.

According to an Oct. 12, 2005, press release, Ziemer states: "Harley-Davidson's current performance is outstanding and we have great new products and customer experiences planned for next year. However, as we look ahead we are watching the economy carefully. Given the uncertainty related to consumer confidence, increasing fuel prices and rising interest rates, we are setting a shipment target range of 348,000 to 352,000 Harley-Davidson motorcycles for 2006. [The company shipped 317,289 units in 2004. Year-to-date shipments for 2005 -- which don't include fourth-quarter results -- stand at 241,429.] Consistent with this more conservative outlook, we are also broadening our long-term guidance on wholesale unit growth to 5% to 9% annually. This will support an annual earnings-per-share growth target in the range of 11% to 17%."

While a conservative outlook is in place, Harley-Davidson -- one of IndustryWeek's IW 50 Best Manufacturing Companies in 2005 --- is continuing to grow its brand awareness.

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