(Reuters) -Harley-Davidson lowered its revenue forecast for the year as sticky inflation and high borrowing costs hurt demand for motorcycles in North America, sending the company’s shares down 3.3% before the bell on Thursday.
Demand for leisure products in the U.S. has been weak as Americans remain wary of depleting savings and rising credit card debt.
In July, Harley said it would pare back motorcycle shipments in the second half of this year to bring them in line with retail sales.
The Milwaukee-based company’s third-quarter global motorcycle shipments fell 39% as dealers adjusted inventory levels amid the current retail environment.
Harley’s retail sales in North America, the company’s biggest market, were down 10%.
“We have worked diligently through the quarter to mitigate the impact of high interest rates, and macroeconomic and political uncertainty, that continue to put pressure on our industry and customers, especially in our core markets,” Harley CEO Jochen Zeitz said.
Still, the company’s third-quarter profit of 91 cents per share beat the average analyst estimate of 79 cents, according to data compiled by LSEG, as Harley focused on selling more of its lucrative Touring bike models.
This strategy has been effective in maintaining the company’s profit margin despite consumers cutting back on non-essential purchases due to persistent inflation and higher borrowing costs.
Harley said it now expects 2024 revenue from motorcycles and related products to be down 14% to 16%, compared with its prior forecast of down 5% to 9%.
Rival Polaris also cut its full-year forecast earlier this week, citing a challenging retail environment.
(Reporting by Kannaki Deka in Bengaluru; Editing by Shounak Dasgupta)
