Harley’s results exceeded expectations due to the motorcycle shipment growth

On Wednesday, Harley-Davidson Inc, an American motorcycle producer, announced its higher-than-expected earnings for the 3rd quarter. As a result, the company’s stock has grown, also spurred by increased consumer demand for some popular motorcycle models, as well as by the rise in prices during the summer season.

The company’s net profit grew up to $261 million with a $1.78 price per share, therefore, exceeding the level of $1.40 per share.

Ivan Feinseth, chief investment officer at Tigress Financial Partners LLC, outlined that Harley-Davidson continues to show great results due to its strong brand, also adding that the company’s client base tends to become older.

Global motorcycle shipments rose sharply after the Harley-Davidson’s pause in production in the middle of May. Last year, the company’s shipments were about 47,900 units, while this year, they have risen up by 19% to 57,100 units. However, when the decision to increase production for replenishing stocks and showroom floors with its most popular and profitable models was made, worldwide retail sales of motorcycles decreased by 2% in comparison with the previous year.

At the same time, Ryan Sundby, analyst at William Blair, noted that North America, the Harley’s largest market, has been the most profitable for the company over the past five years even with low inventory levels.

Jochen Zeitz, Harley-Davidson’s CEO, confirmed the expectations about the revenue growth from 5% to 10% for motorcycle sales and operating income margin of 11% to 12%, given high demand.