Harley-Davidson Q3 2020 Financials

Good afternoon.

Election Day is a week away. There’s new evidence of water on the moon. Amy Coney Barrett is a Supreme Court justice, the fire hose of information continues to overwhelm even the most devout COVID-19 science junkies and Harley-Davidson shares soared 27% to $36.82 earlier in the day after reporting third-quarter net income of $120.2 million and post its best Q3 result since 2015.

A striking result after Harley-Davidson put a German environmentalist in charge and recorded a worldwide sales decline of 8%, which is the 15th consecutive quarterly decline.

Wall Street is reviving optimism about Harley’s future at a time when motorcycle sales are in decline. Talk about exaggerating your perspective.

Jochen Zeitz’s (CEO) “ReWire” (yes, a play on the LiveWire electric motorcycle) strategy cut 30% of the models in the lineup, exited 39 markets, eliminated 10% of its workforce including product teams developing new motorcycle models — were executed to manage down motorcycle volume and reduce its global presence due to low sales.  

The actions helped to stop discounting and drive dealership prices higher to MSRP in Q3.  It’s also a tacit acknowledgement that the motor company’s smaller scope and scale is the only way forward after multiple abandoned growth plans and over a decade long quest to appeal and reach new types of riders.

Abandoning affordable, youth-oriented motorcycles is a staggering reversal given Mr. Zeitz’s experience at Puma in connecting with the youth culture and claiming ownership of that generation in Europe. Remember “Puma chic” streetwear fashion?

Harley-Davidson Inc. is back!  Back, to making big, expensive motorcycles for its most devoted customers.

UPDATE: October 27 at 5:13PM Pacific — Full Disclosure: I don’t currently own or have plans to purchase HOG stock.

Photos courtesy of Bloomberg and Harley-Davidson

All Rights Reserved (C) Northwest Harley Blog

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‘Coronavirus’

I truly hope you all are healthy while staying safe.

To state the obvious: we are all drowning under a steady drip of negative and sometimes outright terrifying news.

With social media and cable television, we can get this drip, drip, drip of dangerous news 24/7. And given the intense competition between the different “news” sources, it has created an environment of doing whatever it takes to increase clicks and views in support of more ad revenue.  Adding to this are the bad actors out there.  They have goals to take advantage of the current structure of social media to excite, energize or anger audiences making it very difficult to stem the tide of disinformation.  In fact, according to some news reports, Russian trolls are already engaged in disinformation campaigns around COVID-19.

There are three factors that seem to encourage the pessimism spiral. The first is a belief that the events that have occurred are permanent. In other words, if things are bad, things will stay bad. The second is a belief that what has happened will have a pervasive and apocalyptic effect on our lives. And the third is the issue of blame, finding someone, not just someone who is accountable, but someone who can be blamed with all the emotion that goes along with that process.

I want to avoid the temptation to play armchair psychologist, but recognizing that inside voice that is making those negative remarks and arguing against yourself, while putting things in true perspective can help to be more optimistic.

There is relief and why, perhaps now more than ever, motorcycle blogs are essential. I hope you agree.

Blog dispatches from across the country about motorcycle wanderings—this can provide a welcome diversion, a brief reprieve from the current restrictions we’re all living under, and a reminder of the thirst for motorcycle adventures we’ll all need to sate when this pandemic has finally passed.

One day soon, this crazy time of social distancing and sheltering at home will be behind us and we’ll be immersed riding with the sun on our backs and the wind in our face!

Photo taken by author — “The Valley Isle” Sunset, Hawaii (March 2020).

All Rights Reserved © Northwest Harley Blog

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