Here’s What To Expect From Harley Davidson’s Q3 2017 Results

by Trefis Team
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Harley-Davidson (NYSE:HOG) will announce its Q3 2017 results on October 17, 2017 and after the company cut its shipment guidance for 2017 to 6% (from 8%) in its last quarter earnings call, consensus expectations for Q3 2017 are much lower compared to the same period last year. Below is a summary of revenue and EPS consensus estimates for Harley Davidson for Q3, 2017:

Source: Yahoo Finance

Our estimate for the company’s revenue and profit growth for the next few years is in line with the consensus estimates.

Click here to see our detailed revenue forecast for the company

Click here to see our profit forecast for the company

Key Trends:

Declining Demand From Millennials Leading To Slowdown In Revenue Growth

With the baby boomer generation, which was the most loyal customer segment for Harley Davidson aging, the company is unable to find similar demand from the millennial generation leading to a decline in revenues.  Younger generation consumers have shown a preference for sports and dual purpose motorcycles impacting the sales of Harley Davidson’s touring and cruiser motorcycles. Further, the increase in demand in the “used bikes” segment has impacted the sales of the company negatively (Read Here’s How Growth In The “Used Bikes” Segment Is Impacting Harley Davidson).

New Bike Launches To Attract “A New Generation Of People”

Recently, on the occasion of its 115th anniversary, Harley Davidson launched eight new motorcycle models with the goal of attracting new customers and expanding its base. Each of these bikes “have a specific personality” and are aimed towards expanding the demographic of the company’s consumers. Harley Davidson is targeting women, Hispanics, and African Americans to expand its customer base and is actively working on models which can appeal to these segments.

International Expansion

As the demand for its bikes slows down in the U.S., Harley Davidson is taking measures to fuel international expansion and focusing strongly on Asia for growth. The company is planning on setting up a motorcycle factory in Thailand and has a target of generating half of its revenues from international sales in the next 10 years. India and China are the world’s two largest two wheeler markets and with an increase in disposable incomes in these regions, demand for luxury bikes is likely to increase in the coming years and Harley Davidson is looking to capture this growth (Read A Closer Look At Harley Davidson’s International Growth Strategy).

While we do not expect Harley Davidson to exceed analysts’ expectations in Q3 2017 we remain positive on the company’s long term growth prospects as it works on several measures to expand its customer base and focus on international expansion.

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