Sales have been declining for several years.
Dealerships have invested heavily in merchandising to wealthy but aging motorcycle riders and the 'culture' of H-D. New models are aimed at a different demographic, which is not in tune with the traditional motorcycle culture that had previously been dominated by H-D.
But the sales and the stock value have both been declining.
https://www.msn.com/en-us/finance/c...-down-after-five-year-sales-slump/ar-BB10xf0Q
Dealerships have invested heavily in merchandising to wealthy but aging motorcycle riders and the 'culture' of H-D. New models are aimed at a different demographic, which is not in tune with the traditional motorcycle culture that had previously been dominated by H-D.
But the sales and the stock value have both been declining.
https://www.msn.com/en-us/finance/c...-down-after-five-year-sales-slump/ar-BB10xf0Q
Harley-Davidson CEO Steps Down After Five-Year Sales SlumpGo to the link above for the remainder of the story!
(Bloomberg) -- Harley-Davidson Inc. is starting the week in search of a new boss, seeking someone who can stem years of declining sales at the iconic American motorcycle maker just as it’s starting to roll out some new products.
Chief Executive Officer Matt Levatich unexpectedly stepped down Friday, parting ways with the board after a 26-year career at Harley-Davidson -- including five years as CEO in which the company lost more than half its market value. Chairman Jochen Zeitz will fill the job for now, the company said after the close of business Feb. 28.
Harley shares fell as much as 2.3% to $29.77 shortly after the open of regular trading Monday as investors prepared for change at the Milwaukee-based manufacturer.
“An external hire that can look at the business with fresh and critical eyes is needed,” Joseph Spak, analyst at RBC Capital Markets, wrote to investors. That said, “the stock could be in limbo until a new, permanent CEO is named.”
Levatich had been wrestling with several headwinds as CEO, including an aging customer base in the U.S., its biggest market, and heightened tariff costs from President Donald Trump’s trade wars. Harley’s first electric motorcycle, LiveWire, won positive reviews but has yet to kick-start sales or help it achieve greater market share abroad.
Harley was caught flat-footed by competition from more affordable, lightweight bikes as heavy motorcycles like the one Marlon Brando rode in the movie “The Wild One” went out of style, said David MacGregor, an analyst at Longbow Research in Independence, Ohio.
“They’re finally figuring it out, but they’re three years behind the curve,” he said by phone. “The board members and investors were just not willing to wait.”
The new CEO will come aboard as Harley is entering new segments with less expensive middleweight bikes, small displacement motorcycles for Asia, and a slew of electric bikes. It’s also been trying everything from tweaking its iconic logo to acquiring a kids e-bike company to attract younger riders.
Even with the yearslong slump in sales, “the timing of the leadership change ahead of major new product launches scheduled over the next few years” was a surprise, analysts Sharon Zackfia and Tania Anderson of William Blair & Co., wrote in a note.
Road to Recovery?
Harley’s shares have plunged 18% this year through the close Friday, and its $4.6 billion market capitalization is down by more than half from when Levatich took over.
U.S. sales dropped for a fifth straight year in 2019. That period covers most of Levatich’s tenure as CEO, which began in May 2015. Retail sales in the U.S. have risen only once in the past 21 quarters. That inability to spur growth presaged an earnings miss when Harley reported its latest quarterly results in January.
a close up of a piano: Harley Hurting © Bloomberg Harley Hurting
Levatich expressed confidence recently that the company was on the road to recovery. “Our return to growth is not in the distance -- it’s right around the corner, and 2020 is our pivotal year,” the CEO told investors on a Jan. 28 earnings call.
His departure comes after the company moved in January to grant long-term shareholders the power to directly nominate board members, a concession meant to boost investor influence.
Millennial Scooters
Harley’s effort to invest in new products to appeal to a younger demographic has added pressure to margins. To help find younger buyers, Levatich hired the company’s first-ever brand president last April, only to dismiss him six months later, citing unspecified conduct that didn’t align with its corporate culture.
The stock staged a recovery in late 2016 when a new engine briefly boosted U.S. sales volumes and Levatich, 55, announced a restructuring plan designed to save the company millions. But that boost proved short-lived.
“They had it, they lost it, they got it back and lost it again,” said Ken Harris, co-founder of Cadent Consulting Group, a Chicago-based marketing and sales consulting firm. “When people aged out, they had no one to replace those buyers.”
“A millennial would rather have a powered scooter than a Harley Davidson,” Harris said. “I’m not surprised that they had to make a change.”
...