The headline numbers were predictable, 3rd quarter sales down 21.3% year over year, earnings down due to numerous write offs. Stock opens lower. So far so good for my short position.
As I look through the quarterly report and listened to their conference call two items caught my attention.
Source: Harley Davidson press release 2009 October 15
Harley Davidson shipments data
From their press release:
The Company is narrowing its guidance for full-year 2009 shipments, and now expects to ship 222,000 to 227,000 Harley-Davidson motorcycles to dealers, including 35,000 to 40,000 during the fourth quarter. The Company continues to expect full-year gross margins to be between 30.5 percent and 31.5 percent.
So lets split the difference and say they are going to ship 37,500 motorcycles in the 4th quarter 2009. In 4th quarter 2008 they shipped 80,476 units. Harley Davidson is telling us right now shipments (and thus motorcycle revenue) will be more than 50% lower for the fourth quarter.
I'm not disparaging the brand or the company. They are in a tough business right now; selling a 20,000 dollar completely discretionary product. Harley Davidson was very clear about their plans to reduce production in the 4th quarter and how their credit write offs continue to increase. I have to give the company credit for their presentations, but the data does not look good.
The stock closed 5+% higher for the day?