(Reuters) – Harley-Davidson on Thursday forecast full-year revenue for its motorcycle segment to be flat to down 9% from a year earlier, largely below analysts’ expectations, as a cutback in consumer spending pressured demand for its iconic vehicles in North America.
Price increases and surcharges on select models helped the motorcycle manufacturer sustain margins, but they were not enough to offset a decline in bike shipments.
“We recognize that the overall macro environment, including high interest rates, add complexity to our customers’ decisions to purchase discretionary products,” Harley-Davidson CEO Jochen Zeitz said on a call with analysts.
Shares of the Milwaukee-based company were marginally down at midday.
The company, however, beat profit expectations for the fourth quarter as the 120-year-old motorcycle maker focused on selling fewer bikes at higher prices to boost margins.
The company’s global motorcycle shipments fell 13% in the fourth quarter, compared to a year earlier due to dealers maintaining lower inventory amid slow demand.
Harley-Davidson’s retail sales globally were also down 11%, led by a 9% fall in North America.
“North American retail performance continues to be adversely impacted by higher interest rates, economic uncertainty, and lower sales of non-core motorcycles,” the company said.
Rival Polaris <PII.N>, which reported results last month, also forecast 2024 sales decline attributing it to a “difficult retail environment”.
Analysts expected a full-year revenue rise of 0.43% in the motorcycle segment for Harley-Davidson, according to LSEG data.
The company’s sales from motorcycles and related products fell about 14% to $792 million in the quarter, missing analysts’ expectations of $880.2 million.
The company’s profit of 18 cents per share came in much above analysts estimates of 4 cents.
Reporting by Kannaki Deka in Bengaluru; Editing by Shounak Dasgupta and Maju Samuel