In their financial reporting for the final quarter and full year of 2010 Harley-Davidson say that retail sales of new Harley-Davidson motorcycles in the fourth quarter were nearly level with the year-ago period, decreasing 1.0 percent worldwide and 0.2 percent in the U.S.
For the full year, worldwide retail sales of Harley-Davidson motorcycles decreased 8.5 percent overall compared to 2009, with domestic U.S. retail sales of Harley-Davidson motorcycles down 11.7 percent against a heavyweight motorcycle market that was off 14.6 percent. In international markets, retail sales of new Harley-Davidson motorcycles decreased 1.9 percent for the full year compared to 2009, with dealers selling 222,110 new Harleys in total, 143,391 of which were sold in the U.S.
“We feel good about our 2010 results,” said Keith Wandell, President and Chief Executive Officer of Harley Davidson, Inc. “Through the hard work of a lot of very dedicated and talented employees and dealers, we have made strong progress at transforming our business to be leaner, more agile and even more effective at delivering great products and customer experiences. “
In 2010, we expanded our i n t e r n a t i o n a l f o o t p r i n t , s a w improvement in our motorcycle segment results driven by the restructuring of our operations and returned Harley-Davidson Financial Services to solid profitability. A strong, financially sound Harley-Davidson is key to our ability to invest in the business and grow. While there is still hard work ahead, and we remain cautious in our outlook, I am confident that we are positioning Harley-Davidson to succeed and deliver value,” Wandell said.
Commenting on the firm’s brand performance in relation to its ability to develop future-facing customer demographics, Wandell went on to say that “in the U.S., we are the market share leader in new on-road motorcycle sales, not only to Boomers but to young adults, women, African-American and Hispanic riders. In Europe, we moved into the number two market share spot for heavyweight motorcycles in 2010 [behind only BMW]. For 2011, we plan to build on our position as one of the strongest brands in the world”.
The underlying trends in Harley’s performance show that the company strengthened its position continuously throughout 2010, suggesting that, with losses diminishing and sales declines stabilizing, the company should emerge into a modest return to profitable growth in the first half of this year (subject to amortizations).
The fourth quarter 0.2 percent domestic US decline in retail sales occurred against a 14.8 percent drop in industry-wide U.S. heavyweight motorcycle (651cc-plus) retail unit sales. Revenue from Harley-Davidson motorcycles in the fourth quarter of 2010 was $697.8 million, up 26.4 percent compared to the year-ago period, the Company shipping 44,481 Harley-Davidson motorcycles to dealers and distributors worldwide, compared to 35,938 motorcycles in the fourth quarter of 2009. Revenue from Parts and Accessories totaled $149.4 million during the quarter, up 3.3 percent.
The Company’s financial services unit (HDFS) was a key contributor to 2010 earnings, with operating income from financial services of $181.9 million for the full year, including $43.5 million in NEWS Income statements in THREE MONTHS ENDED TWELVE MONTHS ENDED $1,000s (except share) DEC 2010 DEC 2009 DEC 2010 DEC 2009 Net sales revenue $917,076 $764,499 $4,176,627 $4,287,130 Gross profit $271,066 $154,821 $1,427,403 $1,386,196 Total (loss) operating income $36,720 ($228,928) $560,631 $196,086 Net (loss) income ($46,766) ($218,696) $146,545 $55,116 Diluted (loss) earnings per common share ($0.18) ($0.63) $1.11 $0.30 Figures are shown THREE MONTHS ENDED TWELVE MONTHS ENDED in $1,000s DEC 2010 DEC 2009 DEC 2010 DEC 2009 H-D Motorcycles $697,781 $552,036 $3,136,987 $3,174,810 Buell Motorcycles $4,546 ($3,962) $16,280 $46,514 Parts & Accessories $149,395 $144,626 $749,240 $767,275 General Merchandise $61,458 $66,752 $259,125 $282,210 United States 27,617 20,036 131,636 144,464 Exports 16,864 15,902 78,858 78,559 Total H-D 44,481 35,938 210,494 223,023 Total Buell 63 3,026 2,614 9,572 Touring 18,514 14,780 81,927 84,104 Custom 17,835 16,517 87,158 91,650 Sportster 8,132 4,641 41,409 47,269 Total 44,481 35,938 210,494 223,023 NET SALES REVENUE MOTORCYCLE SHIPMENT DATA NOTE: H-D MOTORCYLE SHIPMENT DATA IS NOT THE SAME AS RETAIL REGISTRATIONS PRODUCT MIX DEC 2010 DEC 2009 DEC 2010 DEC 2009 Harley-Davidson sales revenue and production data… 4th quarter 2010 United States 21,246 21,284 143,391 162,385 Canada 1,022 1,030 10,376 11,406 Total North America region 22,268 22,314 153,767 173,791 Europe 5,938 6,322 37,378 36,444 Other 731 997 3,810 3,560 Total Europe region 6,669 7,319 41,188 40,004 Japan 2,951 2,865 11,405 13,105 Other 2,750 2,649 9,582 9,884 Total Asia Pacific region 5,701 5,514 20,987 22,989 Latin America region 1,752 1,607 6,168 5,850 Total Worldwide sales 36,390 36,754 222,110 242,634 RETAIL SALES OF H-D MOTORCYCLES DEC 2010 DEC 2009 DEC 2010 DEC 2009 the fourth quarter. Operating income from motorcycles and related products was $378.8 million for the full year. The operating loss of $6.8 million for the fourth quarter was a substantial improvement from the $221.8 million quarterly loss reported a year earlier.
For 2010 as a whole the Company shipped 210,494 Harley-Davidson motorcycles, in line with its target range of 207,000 to 212,000 motorcycles full year 2010 shipments were 5.6 percent lower than 2009, when the Company shipped 223,023 units. Revenue from Harley-Davidson motorcycles for the full year was $3.14 billion, a 1.2 percent decrease compared to 2009. Full-year P&A revenue was $749.2 million, a 2.4 percent decrease from the year-ago period.
Widespread skepticism greeted Harley’s 2010 sales and shipments forecasts, but having met them there are echoes of a return to the kind of channel-stuffing that attracted criticism in years past in the announcement the Company has made about 2011 production levels.
Harley say they plan to ship between 221,000 and 228,000 motorcycles (worldwide) this year, which will be a 5 percent plus increase; they also state quite openly that this will include shipping more motorcycles to their U.S. dealers that they anticipate will be sold at retail in 2011, but that in doing so they are returning “aggregate U.S. dealer inventory to what the company believes is an appropriate level”. Harley say they’ll ship between 51,000 and 56,000 of these in the first quarter of the year