HOG - Harley-Davidson stock sputters as Q3 profit plunges motorcycle shipments fall 20%

2023-10-26 15:47:57 ET

Shares of Harley-Davidson ( NYSE: HOG ) on Thursday fell as much as 11.8% , after the legacy bike company reported a fall in Q3 revenue and a plunge in profit, driven by a second straight quarter of decline in motorcycle shipments.

HOG stock was last down 6.7% to $26.88 in late afternoon trade.

Harley-Davidson ( HOG ) delivered Q3 earnings per share of $1.38, beating estimates by 3 cents. Revenue fell 6.1% Y/Y to $1.55B, beating expectations by $190M.

However, on a Y/Y basis, earnings per share fell 22%, while operating income slumped nearly 40% to $209M. In HOG's core motorcycle division, revenue decreased 9% to $1.30B, while shipments slipped 20% to 45.3K.

Harley-Davidson's ( HOG ) Q3 was impacted by consumers pulling back on big-ticket consumer discretionary purchases for more staple products amid an environment of elevated interest rates and inflationary pressures. Moreover, an unplanned production suspension in June and July delayed the availability of some of HOG's products in the quarter.

"As we closed out the third quarter of '23, it is clear that, the macroeconomic backdrop has been a challenge for our customers globally and in turn for our business with both inflationary pressures creating affordability challenges and high interest rates contributing to slower upgrade pipeline," HOG top boss Jochen Zeitz said on the earnings conference call .

"It is also worth noting that as we finish ‘23 production at the end of last week, we believe current inventory in any remaining shipments for this year's product will support retail volume throughout Q4 and early in ‘24," Zeitz added.

Turning to Harley's ( HOG ) guidance, the company reaffirmed its full year 2023 revenue growth outlook of flat to 3% for its motorcycle business. HOG also maintained its capital investments forecast of $225M to $250M.

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