Harley-Davidson Inc. reported it’s Q4’13 financials today posting a 9.7% year-over-year rise in earnings to 34 cents per share from 31 cents in the year-ago quarter. The year-over-year increase was due to higher revenues and lower operating expenses in the Motorcycles segment.
Revenues improved 1.7% to $1.19 billion and operating income rose 5.1% to $122 million from $116.1 million in the fourth quarter of 2012. Net income increased 6.8% to $75.4 million from $70.6 million a year ago.
For the 2013 full year results revenues increased 5.7% to $5.9 billion from $5.58 billion in 2012 and net income increased to $734 million from $623.9 million a year ago.
Harley-Davidson shipped 46,618 motorcycles to dealers and distributors worldwide during the 4th quarter which was down 0.95% from 47,067 motorcycles in the fourth quarter of 2012. In the U.S., shipments improved 6.3% from the year-ago quarter to 27,387 units and commands roughly 50% share of the U.S. market,
Keith Wandell, chairman, president and chief executive officer of Harley-Davidson called the year “outstanding.”
So were there any other highlights?
Well yes… John A. Olin – Chief Financial Officer and Senior Vice President stated, “As we anticipated, U.S. retail sales growth in the fourth quarter slowed from the third quarter’s growth rate, behind 2 key drivers…” “The second was the impact of the absence of the popular Road Glide models in the 2014 model year. When you look at Q4 of 2012, the Road Glide represented 9% of that volume, and that Road Glide customers are incredibly loyal to that motorcycle. And that’s probably the biggest impact that we had on our 2013 retail sales in the fourth quarter.”
Mr. Olin also talked about a “fatten the tail” strategy.
I’m not 100% sure of the context, but simply put, a financial fat tail describes a rare and extreme event. On one end of the spectrum, are products like Project RUSHMORE that encourage trade-up at a high revenue and at a very high margin, and typically are aimed at H-D’s core customer. But, Rushmore is selling extremely well with outreach customers. And in addition, the Street Glide is the #1 selling bike to women, young adults, African-American and Hispanic’s.
Suffice to say that the Road Glide was a huge part of H-D sales and it’s no longer there. Yet, the quarter was great! Congrats to the H-D team.
Photo courtesy of The Bike Exchange