Harley-Davidson misses on 2nd-quarter earnings as coronavirus hurts sales and new CEO pushes restructuring plan

insider@insider.com (Matthew DeBord,Reuters)
·2 min read
Harley-Davidson riders
Harley has been refocused on core products for core customers.

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Harley-Davidson unexpectedly swung to a loss in the second quarter as coronavirus shutdowns hit motorcycle sales.

The company on Tuesday reported a loss of 60 cents per share for the quarter through June, compared with a profit of $1.23 per share a year ago.

Analysts had on average expected the profit to come in at 4 cents per share, according to IBES data from Refinitiv.

Motorcycles and related products revenue dived 53% year-on-year to $669 million.

The iconic American motorcycle maker is in the midst of a rush restructuring under new CEO Jochen Zeitz, a former head of athletic brand Puma. Zeitz replaced Mat Levatich earlier this year, prior to the impact of the coronavirus.

Zeitz immediately refocused Harley on its core business — big, expensive, and profitable cruiser bikes, calling his turnaround plan "Rewire." This entails, as Zeitz said on an earnings call after the results were announced, layoffs of hundred of employees worldwide.

Levatich had struggled to introduce an all-electric motorcycle, the LiveWire, but dealers have balked at the nearly $30,000 bike. Under Levatich, Harley has also sought to expand in growing markets outside the US.

Zeitz said that Harley intended to exit underperforming global markets to concentrate on North America.

Harley shares have declined 22% year-to-date, but they had been recovering since a nadir in April. The stock was down 6%, to $27, at the markets open, after declining slightly pre-market.

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Harley has declined in 2020, but recently staged a recovery.

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(Reuters reporting by Rajesh Kumar Singh; Editing by Alex Richardson)

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