How Has Harley-Davidson’s Revenue And Gross Profit Composition Changed Over 2013-2017E?

by Trefis Team
-3.23%
Downside
42.77
Market
41.39
Trefis
HOG
Harley-Davidson
Rate   |   votes   |   Share

hog Q&A 4

There hasn’t been a huge shift in Harley-Davidson‘s (NYSE:HOG) revenue and gross profit composition in the last five years, but the trend is telling. The U.S. alone forms approximately two-thirds of the motorcycle shipments for the company, and the decline in demand in the country’s heavyweight motorcycle market (601+cc) last year was detrimental to Harley’s overall performance. Harley’s retail sales declined 1.6% year-over-year in 2016, despite a 2.3% growth in international sales, due to a 3.9% decline in U.S. retail sales.

Harley has looked for growth in international markets, whose contribution to Harley’s overall revenue is ostensibly rising. The U.S. heavyweight motorcycle market hasn’t filled up to the peak levels of 2005-2006, and it might not in the near future as well. This is primarily as the millennials are typically more price-conscious, especially after the recession, and are looking to hold off on making discretionary expenditures, which includes luxury heavyweight motorcycles. Customer spending also took a hit due to the growing uncertainty regarding the political scenario in the country. The company aims to add 150-200 international dealerships by the end of this decade, with 40 added during last year. This increase in reach and availability could help Harley replace the decline in the home market with more international sales.

Have more questions on Harley-Davidson? See the links below.

Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Harley-Davidson

See More at Trefis | View Interactive Institutional Research (Powered by Trefis)

Get Trefis Technology

Rate   |   votes   |   Share

Comments

Name (Required)
Email (Required, but never displayed)
Be the first to comment!