Harley Say They "Feel Good" About 2010 Results - Baggers Magazine
In their financial reporting for the final quarter and full year of 2010 Harley-Davidson say that retail sales of new Harley-Davidson motorcycles in the fourth quarter were nearly level with the year-ago period, decreasing 1.0 percent worldwide and 0.2 percent in the U.S.
For the full year, worldwide retail sales of Harley-Davidson motorcycles decreased 8.5 percent overall compared to 2009, with domestic U.S. retail sales of Harley-Davidson motorcycles down 11.7 percent against a heavyweight motorcycle market that was off 14.6 percent. In international markets, retail sales of new Harley-Davidson motorcycles decreased 1.9 percent for the full year compared to 2009, with dealers selling 222,110 new Harleys in total, 143,391 of which were sold in the U.S.
"We feel good about our 2010 results," said Keith Wandell, President and Chief Executive Officer of Harley-Davidson, Inc. "Through the hard work of a lot of very dedicated and talented employees and dealers, we have made strong progress at transforming our business to be leaner, more agile and even more effective at delivering great products and customer experiences.
"In 2010, we expanded our international footprint, saw improvement in our motorcycle segment results driven by the restructuring of our operations and returned Harley-Davidson Financial Services to solid profitability. A strong, financially sound Harley-Davidson is key to our ability to invest in the business and grow. While there is still hard work ahead and we remain cautious in our outlook, I am confident that we are positioning Harley-Davidson to succeed and deliver value," Wandell said. Commenting on the firm's brand performance in relation to its ability to develop future-facing customer demographics, Wandell went on to say that "in the U.S., we are the market share leader in new on-road motorcycle sales, not only to Boomers but to young adults, women, African-American and Hispanic riders. In Europe, we moved into the number two market share spot for heavyweight motorcycles in 2010 [behind only BMW]. For 2011, we plan to build on our position as one of the strongest brands in the world".
The underlying trends in Harley's performance show that the company strengthened its position continuously throughout 2010, suggesting that, with losses diminishing and sales declines stabilizing, the company should emerge into a modest return to profitable growth in the first half of this year (subject to amortizations).
The fourth quarter 0.2 percent domestic US decline in retail sales occurred against a 14.8 percent drop in industry-wide U.S. heavyweight motorcycle (651cc-plus) retail unit sales.
Revenue from Harley-Davidson motorcycles in the fourth quarter of 2010 was $697.8 million, up 26.4 percent compared to the year-ago period, the Company shipping 44,481 Harley-Davidson motorcycles to dealers and distributors worldwide, compared to 35,938 motorcycles in the fourth quarter of 2009. Revenue from Parts and Accessories totaled $149.4 million during the quarter, up 3.3 percent.
The Company's financial services unit (HDFS) was a key contributor to 2010 earnings, with operating income from financial services of $181.9 million for the full year, including $43.5 million in the fourth quarter. Operating income from motorcycles and related products was $378.8 million for the full year. The operating loss of $6.8 million for the fourth quarter was a substantial improvement from the $221.8 million quarterly loss reported a year earlier.
For 2010 as a whole the Company shipped 210,494 Harley-Davidson motorcycles, in line with its target range of 207,000 to 212,000 motorcycles. Full-year 2010 shipments were 5.6 percent lower than 2009, when the Company shipped 223,023 units. Revenue from Harley-Davidson motorcycles for the full year was $3.14 billion, a 1.2 percent decrease compared to 2009. Full-year P&A; revenue was $749.2 million, a 2.4 percent decrease from the year-ago period.