Harley-Davidson misses by $0.08, misses on rev, shipment guidance; lowers FY15 shipment, margin guidance; co will increase invesmtents
- Reports Q3 (Sep) earnings of $0.69 per share, $0.08 worse than the Capital IQ Consensus of $0.77; revenues rose 0.9% year/year to $1.14 bln vs the $1.21 bln Capital IQ Consensus.
- 53472 shipments vs. 54-59K guidance.
- Dealer new motorcycle sales were down 1.4% worldwide for the third quarter compared to the year-ago period, with sales down 2.5 percent in the U.S. and up 0.9 percent internationally.
- "We expect a heightened competitive environment to continue for the foreseeable future, and now is the time for us to dial things up with significant additional investments in marketing and product development."
- Harley-Davidson is revising its full-year guidance for motorcycle shipments, reflecting its commitment to managing supply in line with demand and now expects to ship 265,000 to 270,000 motorcycles to dealers and distributors worldwide in 2015, which is ~flat to down 2 percent from 2014; from 276,000 to 281,000 motorcycles.
- In the fourth quarter, the co expects to ship 47,000 to 52,000 motorcycles compared to 47,157 motorcycles shipped in the year-ago period. The company now expects full-year 2015 operating margin of ~16 percent to 17 percent for the motorcycles segment, from 18-19%.
- In 2016, Harley-Davidson will increase its investment in customer-facing marketing by approximately 65 percent above 2015 levels. The company also plans to increase its investment in new product development by approximately 35 percent from 2015 levels. These changes represent an approximate $70 million increase in investment to drive demand compared to 2015.