With strong Q3 performance, Harley-Davidson (HOG) returns to growth path

Cult-bike maker Harley-Davidson, Inc. (NYSE: HOG) recently reported its best quarterly numbers since the onset of the pandemic, reflecting the rebound in consumer sentiment and the company’s effective measures to deal with the ongoing supply chain challenges. The stock made modest gains since then, after experiencing weakness over the past several months.

In the third quarter of 2021, adjusted earnings increased to $1.18 per share from $1.05 per share in the corresponding period of the prior year. The number also beat analysts’ estimates by a wide margin, a trend that continued since the final months of 2020 when the company slipped to a loss.

Net income, including special items, rose around 35% to $163 million or $1.05 per share from $120 million or $0.78 per share in the third quarter of last year. The growth was driven by a 17% year-over-year increase in revenues to $1.37 billion, which also came in above the consensus forecast, aided by increased shipments and favorable product mix. Overall, the positive outcome shows that initiatives taken under the management’s five-year strategy are paying off.

The company also revised down its full-year 2021 capital expenditures guidance to the range of $135 million to $150 million, while maintaining growth outlook for the motorcycles segment in the 30-35% range. During the quarter, the company launched Sportster-S, a revamped version of the Sportster motorcycle made on the Revolution Max platform.

“Harley-Davidson delivered a solid third quarter and we have seen many of our Hardwire strategic initiatives perform well, providing encouraging initial proof points of our five-year strategy. Our teams continue to work to mitigate the impact of the ongoing supply chain challenges that our sector faces, however, our performance underlines that we are on course to deliver our long-term Hardwire strategy,” said Jochen Zeitz, CEO.

Read management/analysts’ comments on quarterly results

Harley-Davidson’s stock traded higher in the early hours of Thursday, after closing the previous session lower. It has lost about 21% in the past six months.