Harley-Davidson Inc. missed even the lowest analyst estimate for fourth-quarter profit as bike sales fell on every continent, including an 11% drop in the pivotal U.S. market.
And the pain won’t end this year: The Milwaukee-based motorcycle maker projected global sales will drop as much as 4.9% more in 2018 after a 6.7% decline last year.
U.S. motorcycle ridership has stalled in spite of Chief Executive Officer Matt Levatich’s efforts to introduce models for first-time buyers and teach more Americans how to safely get around on bikes. Harley fell 4.7% to $52.70 as of 8:05 a.m., before the start of regular trading in New York.
“Harley-Davidson will struggle to achieve significant revenue and margin gains, given weak U.S. demand,” Kevin Tynan, a Bloomberg Intelligence analyst, wrote earlier this month. “The iconic brand faces an uphill climb as it struggles to attract younger buyers to the motorcycling hobby.”
One of Harley’s rival bike brands is calling it quits. Polaris Industries Inc., which started winding down its Victory motorcycle operations early last year, projected adjusted profit of as much as $6.20 a share for 2018, well below analysts’ $6.99 a share average estimate. The Medina, Minn.-based company’s stock plunged 6.9% in pre-market trading Tuesday.
Harley reported profit of 5 cents a share in the last three months of the year, well below the 46 cent average analyst estimate. The company reported a $53.1 million charge related to the U.S. tax bill and a $29.4 million charge for a product recall in a statement.
By Jamie Butters