Harley profit rises as pent-up demand fuels improved shipments

[October 26, 2022]  By Bianca Flowers
 
 (Reuters) -Harley-Davidson on Tuesday reported better-than-expected profit as robust demand for popular bike models during the summer riding season boosted sales, easing investors' fears of a slowdown in leisure spending due to high inflation.

Harley-Davidson motorcycles stand in a garage at Harley-Davidson dealer in Wrigleyville neighborhood, in Chicago, Illinois, U.S., July 13, 2022. REUTERS/Bianca Flowers

Shares of the iconic motorcycle maker were 2.5% higher in pre-market trading after the company reported a 60% jump in quarterly profit, outpacing analyst estimates.

Chief executive Jochen Zeitz reaffirmed Harley's full-year revenue growth outlook of 5% to 10% for motorcycle units and operating income margin of 11% to 12% on the back of strong demand.

"Harley-Davidson delivered a strong third quarter with solid growth for both revenue and operating income," he said in a statement.

The company has ramped up production to ensure popular models are readily available as strong demand for leisure activities and road trips after pandemic lockdowns filled order books.

It has also doubled down on its production targets to make up for a two-week shutdown that suspended bike shipments in mid-May.

Sales from motorcycles and related products rose about 24% to $1.44 billion in the quarter ended Sept. 25 while operating income for motorcycles and related parts soared 164% from a year earlier.

Net profit rose to $261 million, or $1.78 per share, from $163 million, or $1.05 per share, a year earlier.

Revenue rose 21% to about $1.65 billion.

(Reporting by Aishwarya Nair in Bengaluru and Bianca Flowers in Chicago; Editing by Sriraj Kalluvila, Kirsten Donovan)

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