By Kannaki Deka
(Reuters) -Harley-Davidson on Thursday reported a 23% decline in first-quarter revenue, harm by slowing bike gross sales as excessive borrowing prices deter potential consumers from making costly purchases, sending its shares down 18% in afternoon commerce.
The firm additionally reaffirmed its full-year income development forecast of flat to down 9% for its bike enterprise and an working earnings margin of between 12.6% and 13.6%, the highest finish of which was in keeping with the year-earlier quantity.
“We’re really just entering the riding season … and a lot depends on the second quarter, which is why we have not changed our guidance at this point in time,” Harley-Davidson (NYSE:) CEO Jochen Zeitz mentioned on a name with analysts.
Despite Harley’s try to spruce up its choices with electrical and low-cost choices, the 120-year-old bike maker has not been extremely profitable in attracting the youthful technology, forcing it to depend on its tried-and-tested buyer base of boomers to drive gross sales.
During the primary quarter, North American bike retail rose 6%, helped by gross sales of its new Touring bikes. But that determine got here in under an estimate of 9% by Raymond James analyst Joe Altobello.
“With growing pressure on consumer discretionary spending, we think HOG’s unchanged guidance despite a significantly better-than-expected Q1 reflects caution as it pertains to its motorcycle sales and margins for the balance of the year,” CFRA analyst Garrett Nelson mentioned.
Sales within the EMEA area fell 11% on account of weak point in Germany and France, whereas gross sales within the APAC area had been down 12% on account of weak point in China.
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The firm reported an adjusted revenue of $1.72 per share for the primary quarter, above common analysts’ expectations of $1.51 per share, in keeping with LSEG knowledge.
Revenue for the quarter fell 5% to $1.48 billion, beating estimates of $1.34 billion.