Harley-Davidson profit slumps on sluggish demand

File photo: Thrity-two-year old two-wheeler mechatronics technician Vanessa Vilhena Amaro works on a Harley-Davidson before the company’s 120th anniversary celebrations in Hamburg, Germany, May 16, 2023. REUTERS/Cathrin Mueller/File photo Acquire Licensing Rights
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Oct 26 (Reuters) – Harley-Davidson Inc (HOG.N) on Thursday reported a 24% fall in third-quarter profit as customers cut back on discretionary spending due to higher borrowing costs and inflationary pressures.
Customers have turned more selective in buying big-ticket leisure items as interest rates have climbed over the past year from the U.S. Federal Reserve’s aggressive monetary tightening while higher inflation is forcing them to focus on essentials.
Harley has maintained margin growth through its wealthier customer base, but hasn’t been as successful in luring younger riders with the release of the Sportster S models and electric bikes that sell for nearly half the price of its popular Cruiser, Trike, and long-distance Touring models.
Sales from motorcycles and related products fell about 9% to $1.30 billion in the quarter ended Sept. 30.
Global motorcycle shipments decreased 20% during the period due to the production suspension announced in late second quarter, the company said.
The company’s net profit fell to $198.6 million, or $1.38 per share, from $261.2 million, or $1.78 per share, a year earlier.
Reporting by Kannaki Deka in Bengaluru and Bianca Flowers in Chicago; Editing by Sriraj Kalluvila
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