Harley-Davidson Inc. reported a stronger-than-expected rise in quarterly profit on Wednesday, saying the U.S. consumer finances are on the mend, young riders are embracing its brand and it will ship more motorcycles this year than it had expected in January.
Warmer-than-usual U.S. weather also brought in some customers who would otherwise have bought motorcycles later in the spring. Inventories are tight and some customers have to wait for a particular model or color, but the company said such customers are not jumping over to rival brands.
“The warm weather pulled some sales forward,” chief executive officer Keith Wandell said in an interview, adding he was cautiously optimistic about the U.S. economy. “The economy had an impact [but]the underlying fundamentals still aren’t that dazzling.”
Some U.S. consumers who have paid down credit card and mortgage debt are coming back into the market, Mr. Wandell said, and the company’s products are attracting more women and minority riders.
Harley-Davidson shares were up 5.3 per cent in late morning trading at $53.02 (U.S.), a new 52-week high and their best level since the third quarter of 2007.
Net earnings rose to $172-million, or 74 cents per share, from $119-million, or 51 cents per share, a year earlier.
Analysts, on average, were expecting profit of 72 cents a share, according to Thomson Reuters I/B/E/S.
Product sales jumped 20 per cent to $1.27-billion, compared with Wall Street estimates of $1.22-billion. U.S. sales were up 26 per cent, outpacing industry growth.
The Milwaukee-based company said it now expects to ship 245,000 to 250,000 motorcycles worldwide this year, raising its estimate by 5,000 units. It added that it had limited ability to produce additional motorcycles.
A motorcycle plant in York, Pennsylvania, that builds touring bikes and other products is consolidating buildings and retraining workers, while introducing new manufacturing software, so production has been curtailed for the next few months, Mr. Wandell said. That would only be a problem if sales abruptly rose by a surprising amount, he said.
A Harley-Davidson plant in Kansas City, Mo., could ramp up production, but it makes different models than the Pennsylvania plant.
The company plans to release bikes held in inventory if demand accelerates.
Follow us on Twitter: