Harley-Davidson forecasts 2024 motorcycle revenue below estimates By Reuters

© Reuters. FILE PHOTO: The Harley-Davidson sign on a motorcycle engine is pictured in a Harley shop before the company’s 120th anniversary celebrations in Hamburg, Germany, May 16, 2023. REUTERS/Cathrin Mueller/File Photo

By Kannaki Deka

(Reuters) -Harley-Davidson on Thursday forecast full-year revenue for its motorcycle segment to be flat to down 9% from a year earlier, largely below analysts’ expectations, as a cutback in consumer spending pressured demand for its iconic vehicles in North America.

The company, however, beat profit expectations for the fourth quarter as the 120-year-old motorcycle maker focused on selling fewer bikes at higher prices to boost margins.

“We have made progress in key elements of our strategic plan – focusing on our most profitable products and markets, which we believe will continue to yield benefits to the business,” Harley-Davidson (NYSE:) CEO Jochen Zeitz said.

Shares of the Milwaukee-based company were up 1% in early trading.

Price increases and surcharges on select models helped the motorcycle manufacturer sustain margins, but it was not enough to offset a decline in bike shipments.

The company’s global motorcycle shipments fell 13% in the fourth quarter, compared to a year earlier due to dealers maintaining lower inventory amid slow demand.

Harley-Davidson’s retail sales globally were also down 11%, led by a 9% fall in North America.

“North American retail performance continues to be adversely impacted by higher interest rates, economic uncertainty, and lower sales of non-core motorcycles,” the company said.

Rival Polaris (NYSE:), which reported results last month, also forecast 2024 sales decline attributing it to a “difficult retail environment”.

Analysts expected a full-year revenue rise of 0.43% in the motorcycle segment for Harley-Davidson, according to LSEG data.

The company’s sales from motorcycles and related products fell about 14% to $792 million in the quarter, missing analysts’ expectations of $880.2 million.

The company’s profit of 18 cents per share came in much above analysts estimates of 4 cents.

The beat was driven by a higher-than-expected income tax benefit, said Garrett Nelson, senior equity analyst at CFRA Research.

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