Matt Levatich, CEO of Harley-Davidson..."We will continue to deliver what matters to riders"
Harley-Davidson Inc.leaders are counting on a slew of new models and drivers to increase sales and earnings.
In a call with analysts following the release of its fourth quarter and annual 2016 earnings today,Harley-Davidson(NYSE: HOG) president andCEO Matt Levatichsaid the Milwaukee-based motorcycle manufacturer plans to introduce 50 new motorcycles during the next five years.
“The success we saw with the launch of theMilwaukee-Eight engine is a sign of the innovation we have in place. We are confident our 2018 line will also help sales,” he said.“I have never been more excited about the products in our pipeline.”
Harley-Davidsonplans to increase drivers — who may eventually become buyers — by adding foreign dealerships and introducing more Americans to the Harley lifestyle, Levatich said. Company plans call for adding up to 200 dealerships outside the United States by 2020. In the U.S., the company’sHarley-Davidson Riding Academylooks to teach people how to ride a motorcycle. In 2016, more than 65,000 riders were trained through the Riding Academy.
“We do not just build motorcycles, we build drivers, too. We are focusing on the next generation of riders,” Levatich said. “We want to add more dealers overseas and grow riders here in the United States, reaching out to new markets including younger riders, women, African-Americans and Hispanics.”
For the fourth quarter of 2016, Harley-Davidson’snet income was $47.2 million, or 27 cents per share, compared with $42.2 million, or 22 cents per share, during the same quarter in 2015. Sales, however, were $933 million during the quarter, down from $1 billion during the same period in 2015. In the U.S., sales fell 3.9 percent.
International sales are a bright spot for the company, with sales outside the United States increasing 2.3 percent in 2016. Levatich said Harley-Davidsonadded 40 dealers around the world during the past year, with the manufacturer now selling 52.5 percent of its motorcycles outside of the United States.
Harley-Davidson shipped fewer motorcycles overall in the last quarter of 2016 to help dealers reduce their inventory, saidJohn Olin, senior vice president and chief financial officer. The company is doing the same for the first quarter of 2017.
Olin said economic and political uncertainty in the United States and around the world contributed to lower sales. “We believe we will see continued strong headwinds, but think the plans we put in place will help us continue to grow,”he said.
While not giving specifics about whatHarley-Davidsonhas under development, Levatich said they “will change the way people viewHarley-Davidson. It will push us into new markets. We are definitely entering a new stage of product development.”
Levatich said the investments Harley-Davidsonhave made in both new product development and manufacturing deficiencies will have lasting benefits.
“We will not see overnight returns, but we are making decisions that will attribute to long-term success,” he said. “We are adjusting to the new normal of U.S. market performance. We will continue to deliver what matters to riders.”
MaryBeth Matzek Special to the Milwaukee Business Journal