(Bloomberg) -- Harley-Davidson Inc. teased a tuned-up turnaround plan to cope with a deepening slump in demand for the American motorcycle maker's bikes.
Harley will refine its road map for recovery and reveal “significant additional steps” this summer to improve performance, the company said as it reported the steepest drop in quarterly U.S. retail sales in five years. The shares were little changed at $41.03 as of 9:43 a.m. in New York, erasing a gain of as much as 5.1 percent.
“We are pleased to see management looking to potentially take more action and this turnaround is likely the focus of the stock now,” Joseph Spak, an analyst at RBC Capital Markets with a hold rating on the shares, wrote to clients Tuesday.
Chief Executive Officer Matt Levatich has been struggling to attract younger buyers in Harley's core home market and overseas sales have been stalling. The company is shuttering a Missouri plant and consolidating that production in Pennsylvania, shedding about 260 jobs in the process. It also was caught in the crosshairs of President Donald Trump's trade spat with Europe over U.S. metal tariffs last month, with European Union leaders threatening to tax imports of Harley bikes in retaliation.
“The growth opportunities are limited because you have interest in the hobby waning here and you don't have that possibility for expansion in global markets because your bikes aren't what people ride as commuters,” Kevin Tynan, a Bloomberg Intelligence analyst, said before earnings were released.
U.S. retail sales plunged 12 percent in the first quarter, the 13th decline out of the last 14 quarters. Motorcycle revenue beat analysts' estimates as shipments to dealers were in line with the company's forecast.
To contact the reporter on this story: Gabrielle Coppola in New York at gcoppola@bloomberg.net.
To contact the editors responsible for this story: Craig Trudell at ctrudell1@bloomberg.net, Jamie Butters
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