Harley-Davidson has reported that their first quarter 2015 worldwide retail sales of new motorcycles decreased 1.3 percent compared to last year's first quarter. Dealers worldwide are reported to have sold 56,661 new Harley-Davidson motorcycles in first quarter of 2015, compared to 57,415 motorcycles in the year-ago quarter; with shipments down to 79,589 motorcycles worldwide from 80,682 in the year-ago quarter.
In the U.S., dealers sold 35,488 new Harley-Davidson motorcycles in the quarter, down -0.7 percent compared to sales of 35,730 motorcycles in the year-ago period. The company believes increased, aggressive competitive motorcycle discounting was among the factors adversely affecting first-quarter U.S. retail Harley-Davidson sales.
The company says it now expects motorcycle shipments to grow approximately 2 percent to 4 percent in 2015 (276,000 to 281,000 motorcycles), down from the previous 4 percent to 6 percent shipment growth forecast (282,000 to 287,000).
In international markets, dealers sold 21,173 new Harley-Davidson motorcycles during the quarter compared to 21,685 motorcycles in the year-ago period, with unit sales down 1.1 percent in the Asia Pacific region and 5.6 percent in the EMEA region and up 0.3 percent in the Latin America region and 5.7 percent in Canada.
The company says that sales in many of its emerging markets were up significantly in the quarter, including India, China and Mexico, and says it now has nearly 1,500 "independent" dealerships in more than 90 countries globally.
Harley say that in 2014 they were the number-one seller of new on-road motorcycles to U.S. young adults ages 18-34, women, African-Americans, Hispanics and Caucasian men ages 35-plus for the seventh straight year.
In the 601cc-plus U.S. on-road market, Harley say they sold more than three times as many new motorcycles to young adults ages 18-34, more than seven times as many to women, more than five times as many to Hispanics, more than five times as many to African Americans and more than nine times as many to Caucasian men ages 35-plus as the nearest competitor.
Operating income for the Motorcycles segment of the business was $345.5 million in the first quarter of 2015; compared to $347.7 million in the year-ago period - unfavorable foreign currency exchange rates are blamed.
Revenue from sales of motorcycles to dealers and distributors was $1.26 billion, compared to revenue of $1.31 billion in the year-ago period.
Revenue from motorcycle parts and accessories was $183.9 million during the quarter compared to $198.1 million in the year-ago period. Revenue from general merchandise, which includes MotorClothes apparel and accessories, was $66.4 million compared to $64.1 million in the year-ago period.
Gross margin for the Motorcycles segment was 39.1 percent in the first quarter of 2015 compared to 37.7 percent in the first quarter of 2014. First-quarter operating margin for the Motorcycles segment was 22.9 percent compared to operating margin of 22.1 percent in last year's first quarter.
Operating income from financial services was $64.7 million in the first quarter of 2015 compared to $63.2 million in last year's first quarter. First-quarter financial services results are said to reflect favorable net interest and higher non-lending income, partially offset by increased provision for credit losses.
First-quarter 2015 diluted earnings per share increased 5.0 percent to $1.27 compared to diluted EPS of $1.21 in the year-ago period. Net income was $269.9 million on consolidated revenue of $1.67 billion compared to net income of $265.9 million on consolidated revenue of $1.73 billion in last year's first quarter. Revenue in this year's first quarter was down from the year-ago period primarily on unfavorable foreign currency exchange and slightly lower motorcycle shipments.
In the second quarter, the company says it expects to ship 83,000 to 88,000 motorcycles, compared to 92,217 motorcycles shipped in the year-ago period. The company continues to expect full-year 2015 operating margin of approximately 18 to 19 percent for the Motorcycles segment. The company also continues to expect 2015 capital expenditures for Harley-Davidson, Inc. of $240 million to $260 million.
On a discretionary basis, the company repurchased 2.9 million shares ($182.5 million) of Harley-Davidson, Inc. common stock during the first quarter of 2015. In the first quarter of 2015, there were approximately 211.8 million Harley-Davidson weighted-average diluted common shares outstanding, compared to approximately 220.5 million shares in the year-ago quarter. At the end of the first quarter, 18.6 million shares remained on board-approved share repurchase authorizations.
