By Will Feuer
Shares of Harley-Davidson fell after the motorcycle maker reported a drop in third-quarter sales and executives said some customers are struggling to keep up with bills.
The stock dropped almost 10% to $26.05 in morning trading. Shares have tumbled about 38% so far this year, weighed down by production hiccups and concerns over consumer discretionary spending.
Harley on Thursday reported a 20% drop in motorcycle shipments for the third quarter, leading to a 9% drop in revenue for the Harley unit responsible for selling bikes, parts and apparel. That unit posted revenue of $1.3 billion, below the $1.36 billion analysts expected, according to FactSet.
Harley’s quarterly profit fell to $1.38 a share, topping analysts’ expectations by two cents.
Rising interest rates and persistently high inflation are weighing on demand for Harley’s bikes.
“We certainly see a lot of customers sitting on the sidelines, essentially just putting this level of a discretionary purchase to the side in 2023,” said Edel O’Sullivan, chief commercial officer at Harley Davidson’s motorcycle unit.
Harley, through its financing unit, also provides loans to customers looking to buy motorcycles. A higher provision for credit losses weighed on operating profit in that unit. Both realized credit losses and delinquencies are on the rise, Chief Financial Officer Jonathan Root said.
“We are seeing a more stressed consumer,” he said on a conference call.
Write to Will Feuer at [email protected]
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