Harley-Davidson shares rose essentially the most in 5 months after second-quarter revenue and income beat estimates, an indication that Chief Govt Officer Jochen Zeitz’s turnaround plan helps the bike maker overcome supply-chain complications and a short lived manufacturing shutdown.
The Milwaukee-based firm posted earnings of $1.46 a share, nicely over the $1.02 common of analysts’ estimates compiled by Bloomberg. Income from bikes and associated merchandise rose to $1.27 billion, in contrast with the $1.25 billion forecast by analysts. Harley shares rose 6.7% at 10:10 a.m. in New York and earlier gained 10%, essentially the most on an intraday foundation since early February.
Zeitz, a former Puma SE govt who took the helm of the troubled producer in February 2020, has slashed prices, exited unprofitable markets and tightened stock to lift bike costs as a part of his “Hardwire” turnaround plan. Whereas he’s efficiently launched new fashions and mopped up extra bike stock, delivery bottlenecks and components shortages have constrained gross sales progress popping out of the pandemic.
The revenue beat got here at the same time as international gross sales of bikes fell to 50,500, down 23% from the year-earlier quarter. Gross sales by that measure had been down 28%, to 34,900, in North America, Harley’s largest market. Europe fell 15%, Latin America dropped 8%, and gross sales in Asia rose about 1%.
“Demand was sturdy throughout the board, however the out there bikes within the dealership had been the priority,” Zeitz stated on a name with analysts. Harley struggled to ship what it needed to sellers, he stated.
Harley was pressured to halt manufacturing and shipments for 2 weeks in Might and June due to a “regulatory compliance matter” with an element from one in all its suppliers. On the time, Harley informed buyers it might have the ability to make up for misplaced manufacturing within the second half of 2022.
Zeitz is also culling dealerships within the U.S. and clawed again a portion of seller earnings on sure fashions earlier this yr, a transfer that would assist shore up revenue margins, in accordance with UBS AG.
Harley maintained its forecast of 5% to 10% income progress in 2022, and working revenue margin of 11% to 12%.
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