Harley-Davidson, Inc. reported second quarter results.
“I’m pleased with the pace of improvements and with the strong quarter that we have delivered,” said Jochen Zeitz, Chairman, President and CEO, Harley-Davidson. “We are starting to see the initial proof points as we execute our Hardwire Strategy, as demonstrated by the positive financial results today. We are encouraged by the signs of consumer positivity in the market; however, we remain mindful of the significant supply chain challenges that we expect to continue to impact the sector.”
Second Quarter 2021 Highlights and Results, and Recent Announcements
Second Quarter 2021 Results
Harley-Davidson, Inc. Consolidated Financial Results |
nm – not meaningful |
|||||
$ in millions (except EPS) |
2nd quarter |
6 months |
||||
2021 |
2020 |
Change |
2021 |
2020 |
Change |
|
Revenue |
$1,532 |
$865 |
77% |
$2,955 |
$2,163 |
37% |
Net Income (Loss) |
$206 |
($92) |
nm |
$465 |
($23) |
nm |
GAAP Diluted EPS |
$1.33 |
($0.60) |
nm |
$3.01 |
($0.15) |
nm |
Adjusted Diluted EPS |
$1.41 |
($0.38) |
nm |
$3.11 |
$0.13 |
nm |
Q2 consolidated revenue was up 77 percent versus Q2 2020 driven by strong growth in the Motorcycles and Related Products segment. Bottom-line results reflect significant operating income improvement with strong results in both the Motorcycles and the Financial Services segments.
Harley-Davidson Retail Motorcycle Sales |
||||||
Motorcycles (thousands) |
2nd quarter |
6 months |
||||
2021 |
2020 |
Change |
2021 |
2020 |
Change |
|
North America |
48.2 |
33.6 |
43% |
81.0 |
58.8 |
38% |
EMEA |
10.2 |
11.0 |
(7)% |
15.2 |
18.7 |
(19)% |
Asia Pacific |
6.0 |
6.9 |
(13)% |
11.8 |
12.6 |
(7)% |
Latin America |
0.9 |
1.2 |
(31)% |
1.6 |
3.0 |
(47)% |
Worldwide Total |
65.3 |
52.7 |
24% |
109.5 |
93.2 |
18% |
Global retail motorcycle sales in the second quarter were up 24 percent, driven by a strong Q2 North America retail performance. EMEA Q2 retail sales declines were a result of the company’s decision not to continue selling Street and legacy Sportster motorcycles in Europe. Latin America retail sales were impacted by a reduction in dealers and pricing actions across the portfolio, which were executed as part of the Rewire strategy.
Motorcycles and Related Products Segment Results |
||||||
$ in millions |
2nd quarter |
6 months |
||||
2021 |
2020 |
Change |
2021 |
2020 |
Change |
|
Motorcycle Shipments (thousands) |
56.7 |
28.4 |
100% |
111.5 |
81.3 |
37% |
Revenue |
$1,332 |
$669 |
99% |
$2,564 |
$1,769 |
45% |
Motorcycles |
$1,030 |
$447 |
131% |
$2,046 |
$1,346 |
52% |
Parts & Accessories |
$223 |
$169 |
32% |
$373 |
$303 |
23% |
General Merchandise |
$56 |
$38 |
47% |
$106 |
$87 |
22% |
Gross Margin |
30.6% |
16.1% |
14.5 pts. |
32.3% |
24.1% |
8.2 pts. |
Operating Income (Loss) |
$186 |
($121) |
nm |
$413 |
($36) |
nm |
Operating Margin |
14.0% |
(18.1%) |
32.0 pts. |
16.1% |
(2.1%) |
18.2 pts. |
Revenue from the Motorcycles and Related Products segment was up significantly during the second quarter primarily driven by a 100 percent increase in wholesale shipments as the company lapped last year’s COVID-19 related shutdown.
Parts and Accessories second quarter revenue was up 32 percent while General Merchandise was up 47 percent over Q2 2020.
Second quarter gross margin was up 14.5 percentage points to Q2 prior year while second quarter operating margin finished up 32 percentage points over Q2 prior year due to volume gains behind lapping last year’s COVID-19 related shutdown, improved motorcycle unit mix and lower restructuring expense.
Financial Services Segment Results |
||||||
$ in millions |
2nd quarter |
6 months |
||||
2021 |
2020 |
Change |
2021 |
2020 |
Change |
|
Revenue |
$201 |
$196 |
2% |
$391 |
$394 |
(1)% |
Operating Income |
$95 |
$5 |
nm |
$213 |
$28 |
nm |
Financial Services segment operating income was up significantly over prior year in the second quarter, primarily driven by a lower provision for credit losses.
Other Results
Harley-Davidson generated $644 million of cash from operating activities year-to-date in 2021, $34 million favorable to year-to-date 2020. Cash and cash equivalents were $1.7 billion at the end of the second quarter, down $2.1 billion to the end of Q2 2020 as the company has intentionally brought down cash balances as it believes the pandemic-related liquidity concerns have eased.
Tax Rate – The company’s second quarter effective tax rate was 25 percent.
Dividends – The company paid cash dividends of $0.15 per share in Q2 2021.
As a result of its Q2 performance, for the full-year 2021, the company now expects:
Additionally, for the full-year 2021, the company continues to expect:
Cash allocation priorities remain to first fund growth through The Hardwire initiatives, then to pay dividends. Given the company’s strong cash position, the company may also choose to execute discretionary share repurchases.
Company Background
Harley-Davidson, Inc. is the parent company of Harley-Davidson Motor Company and Harley-Davidson Financial Services. Our vision: Building our legend and leading our industry through innovation, evolution and emotion. Our mission: More than building machines, we stand for the timeless pursuit of adventure. Freedom for the soul. Our ambition is to maintain our place as the most desirable motorcycle brand in the world. Since 1903, Harley-Davidson has defined motorcycle culture by delivering a motorcycle lifestyle with distinctive and customizable motorcycles, experiences, motorcycle accessories, riding gear and apparel. Harley-Davidson Financial Services provides financing, insurance and other programs to help get riders on the road. www.harley-davidson.com.
Webcast
Harley-Davidson will discuss its financial results and outlook on an audio webcast at 8:00 a.m. CT today. The webcast login and supporting slides can be accessed at http://investor.harley-davidson.com/news-and-events/events-and-presentations. The audio replay will be available by approximately 10:00 a.m. CT.