Aftermarket Moto Design 275 June 2022 AMD 275 June 2022

JUNE 2022


30th ! YEAR


Harley Q1 North America Retail Motorcycle Sales -5 %; International + 2 % - Ongoing Supply Chain Shortages Blamed

JUNE 2022

ISSUE # 275
Harley has opened the year with mixed results for Q1 - revenue from motorcycles was up overall , but while international unit sales improved , domestic U . S . numbers were off . Global Q1 retail motorcycle sales were up + 2 % versus the prior year - " driven by growth in EMEA and Asia Pacific . North America retail performance ( down -5 %) was adversely impacted by production shortages , which resulted in significantly lower dealer inventories ." Chairman and CEO Jochen Zeitz is quoted as saying that " as we enter the second year of our five-year Hardwire strategic plan , we are pleased to see strong consumer demand for Harley- Davidson products across all regions . Our teams continue to work through the impact of the ongoing global supply chain disruption , and despite the challenging macro environment , we are optimistic for improvements in the second half of the year ." Q1 reported highlights include + 6 % growth for motorcycle revenue -
" driven by global motorcycle pricing and growth across Parts & Accessories (+ 11 %) and Apparel (+ 2 %)." Motorcycle sales operating income margin was 15.6 %, which was down - 2.9 points versus 2021 Q1 - " global pricing was able to offset cost inflation , but margin was negatively impacted by
lower shipments due to the ongoing semi-conductor shortage ." A decline of -27 % in HDFS operating income was " driven by the significant loss reserve release in 2021 and the normalization of losses in 2022 in line with expectations ; GAAP diluted EPS was $ 1.45 and during the quarter Harley repurchased $ 248 million of shares ( 6.2 million shares ) on a discretionary basis . Harley ' s full-year 2022 outlook remains unchanged ; the merger
transaction between LiveWire and AEA-Bridges Impact Corporation ( the special purpose acquisition vehicle / SPAC in which Harley will maintain a 74 % ownership stake ) is " on track to close in mid-2022 " - which sounds a tad later than the Q2 completion and NYSE ' go live ' originally cited . First quarter gross margin was down - 2.8 percentage points compared to Q1 prior year - " global pricing contributed approximately four points of margin benefit and largely offset the cost inflation , however , gross margin was also negatively impacted by unfavorable motorcycle mix due to the inability to produce to demand given the semi-conductor challenges . The - 2.9 first quarter operating margin decline was " due to negative mix and higher operating expenses for LiveWire ." HDFS ' operating income declined $ 32m versus Q1 2021 - " driven by an unfavorable comparison to the prior year quarter , which included a
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