Bussiness

Harley-Davidson shares tank as coronavirus spurs quarterly loss

Harley-Davidson on Tuesday reported an unexpected quarterly loss due to disruptions caused by the coronavirus pandemic, sending its shares sliding more than 9 percent in morning trade.

It also unveiled a restructuring strategy that aims to shift focus back to more profitable motorcycles and core markets such as the US.

Harley has been struggling for years to grow sales beyond baby boomers. The company has not posted retail sales growth in the US, its biggest market, in the past 14 quarters.

The pandemic has exacerbated its challenges.

In the latest quarter, U.S. retail sales plunged 27 percent year-on-year, the steepest fall in at least six years. Overall, motorcycles revenue dived 53 percent year-on-year to $669 million, hurt by the temporary suspension of production due to COVID-19 related lockdowns.

Harley 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 on average expected a profit of 4 cents per share, according to IBES data from Refinitiv.

Shares were last trading down 5 percent, at $27.80.

While retail sales have improved sequentially since April with the lifting of pandemic shutdowns, Harley declined to provide an earnings guidance.

Chief Executive Jochen Zeitz has tightened supplies and cut production, reducing global dealer inventory and driving up prices for pre-owned bikes, which used to be a drag on new bike sales.

Zeitz, who took the reins in February, said the company will avoid price discounts and promotions to drive sales. “Focusing on desirability will be the future,” he said.

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