Skip to main content

The logo of U.S. motorcycle company Harley-Davidson is seen on one of their models at a shop in Paris on Aug. 16, 2018.

Philippe Wojazer/Reuters

Harley-Davidson Inc on Tuesday reported an unexpected quarterly loss due to disruptions caused by the coronavirus pandemic, sending its shares sliding over 9 per cent in morning trade.

It also unveiled a restructuring strategy that aims to shift focus back to more profitable motorcycles and core markets such as the United States.

Harley has been struggling for years to grow sales beyond baby boomers. The company has not posted retail sales growth in the United States, its biggest market, in the past 14 quarters.

Story continues below advertisement

The pandemic has exacerbated its challenges.

In the latest quarter, U.S. retail sales plunged 27 per cent year-on-year, the steepest fall in at least six years. Overall, motorcycles revenue dived 53 per cent year-on-year to $669 million, hurt by the temporary suspension of production due to COVID-19 related lockdowns.

Harley reported a loss of 60 cents per share for the quarter through June, compared with a profit of $1.23 per share a year ago. Analysts on average expected a profit of 4 cents per share, according to IBES data from Refinitiv.

Shares were last trading down 7.7 per cent at $27.01.

While retail sales have improved sequentially since April with the lifting of pandemic shutdowns, Harley declined to provide an earnings guidance.

Chief Executive Jochen Zeitz has tightened supplies and cut production, reducing global dealer inventory and driving up prices for pre-owned bikes, which used to be a drag on new bike sales.

Zeitz, who took the reins in February, said the company will avoid price discounts and promotions to drive sales. “Focusing on desirability will be the future,” he said.

Story continues below advertisement

The move could make it tougher to find new customers in the worst recession since the Great Depression.

As part of the restructuring strategy, Zeitz plans to reduce product portfolio by 30 per cent and invest in 50 markets with growth potential in North America, Europe and parts of Asia Pacific.

His strategy will eliminate 700 positions, but is estimated to result in ongoing annual savings of about $100 million.

Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.

Coronavirus information
Coronavirus information
The Zero Canada Project provides resources to help you manage your health, your finances and your family life as Canada reopens.
Visit the hub
Report an error
Tickers mentioned in this story
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies