Born to be wild? The movie Easy Rider got a lot of Baby Boomers heading out on the highway.
Get your motor running…
Head out on the highway…
It’s hard to say exactly how many Harley’s the classic hippie-era film, Easy Rider, actually sold, but it helped ingrain the idea of traveling America on two wheels, and that dream seems to be coming back to life for the Boomers, if the sudden upturn in Harley-Davidson sales is any indication.
The largest of the American motorcycle manufacturers rebounded from a deep slump during the recession, its second-quarter sales soaring by 8%, while profits doubled during the quarter to $190.6 million, or 81 cents a share.
“We’re pleased with the trends in our sales, Harley-Davidson Chief Executive Keith Wandell told the Associated, Press, though he said, “We still remain cautious about the overall economy and overall consumer confidence.”
The century-old company has had some significant ups-and-downs over recent decades, its fortunes long tied to the mood – and fortunes – of the Baby Boom men. But there are signs that Harley is expanding its reach, attracting a surprising number of new women riders – as a number of recent magazine stories have highlighted. It is also starting to draw in the Gen-X and younger buyers who’ve traditionally steered towards Japanese and, to a lesser degree, European imports, according to industry data.
A current model Harley Fat Bob.
The maker reported that U.S. sales rose 7.5%, while exports were up 2.4%. In total, the motorcycle maker sold 83,996 bikes during the quarter, marking Harley’s first upturn since late 2006. It is boosting its forecast for the rest of the year to somewhere between 228,000 to 235,000, which could mean an increase of as much as 12%.
Not that it would be a difficult comparison. Harley sales collapsed in 2009, falling 23%, year-over-year. The slump deepened in 2010, many potential customers steering clear of what was seen as a toy rather than basic transportation, according to analysts.
“We continue to note indications that HOG is on the right track strategically and operationally, and believe that the trajectory of the market recovery will be the key determinant of additional upside” for the maker, said analyst Rod Lache, of Deutsche Bank.
Harley’s recent numbers may reflect the impact of the March 11 disaster in Japan. While most of that country’s motorcycle manufacturers – like the auto industry – were hit by severe parts shortages Harley has largely been unaffected. With a short riding season in much of the country, that may be helping steer potential riders to look for alternative products from the U.S. or Europe.
The good news from the Milwaukee-based company sent its stock price –the company trades, appropriately, under the NYSE symbol HOG — soaring to a 52-week high before the closing bell on Tuesday.
And analyst Lache said the sales upturn could be taken as a positive sign for the broader economy. “We view this as particularly meaningful in the context of questions surrounding demand for consumer discretionary goods,” he said.