H-D announced Q2’11 financial results this morning.
In a word – Booyah!
By every financial measure Harley-Davidson generated improvements in the second quarter of 2011, with strong earnings growth, increased shipments and growth in its dealers’ new motorcycle sales both in the U.S. and globally. Here are some of the stats that CEO Keith Wandell and CFO John Olin reviewed from Anaheim, CA. where the annual dealer meeting and new product launch was in progress:
- Revenue in Q2’11 was $1.51B (up 15%) with income up 36.8% to $190.6M
- Motorcycle shipments up 7,769 in Q2’11 vs. Q2’10; Motorcycle segment revenue up $204.6M (18%) vs. Q2’10
- Touring motorcycle shipments made up 38.3% in Q2’11; up 3.6%
- International shipments were 36.2% in Q2’11 vs. Q2’10 at 42.5%
- Shipment forecast for 2011 rose by about 8% and now H-D expects to ship between 228,000 and 235,000 motorcycles worldwide
- Market segment share (651+cc) is 53.8%; up 0.2% from 2010
- U.S. dealer network sales of uses motorcycles up 11% through May; Used bikes sales continue to firm up (meaning they offer the dealer a method to help offset the “sticker shock” of new bikes)
Did anything go less positive? Well that depends on your viewpoint. From a shareholder’s perspective it’s “Houston, we’re ready to throttle up”! Stock price set a new 52-week high at $46.88.
As a rider/layman the touring motorcycle shipment increases were offset by the decreases in Custom and Sportster declines. There were no age demographics quoted in the analyst call, but we’ve been told that typically “youngsters” don’t buy the higher priced baggers. In addition, the new 2012 touring models that were announced earlier in the month have… shall we say… “lean” engineering innovation compared to previous years. In a number of cases there we’re only paint palette changes and price increases made up the so-called “new” touring models. There was about a 1% price increase in the U.S. market. The lack of innovation is especially troubling (to me) given that product development spending was up $7M in the first half of 2011 which was described as a continuation of their strategy and focus on leaner engineering. Sure metals and fuel costs are up, but the lack of stronger product changes is not always a recipe for long term success.
Nothing was noted on the call about the recent expansion in India. Not sure why given that SG&A expenses were up about $13M on the strategy to grow 100 – 150 international dealers by 2014. Latin America saw a decrease in retail sales which was largely due to all Brazil dealers being terminated. There was a restart in that country and the new dealers (6) were coming up to speed.
Congrats to H-D on a great quarter!
UPDATE: Full transcript of the analyst call is HERE courtesy of SeekingAlpha.
Photo courtesy of H-D. Full Disclosure: I don’t own H-D stock