Harley-Davidson Financial Services Grows Originations Despite Slowing Retail Sales

While motorcycle sales in the U.S. continue to decrease, Harley-Davidson Financial Services grew originations by 7.2% in the second quarter, the company announced in an earnings report.

Loan originations for new and used motorcycles increased to $1.06 billion compared with $987.7 million the same time the year prior. Overall, HDFS had a lower year-over-year provision for credit losses and the full-year outlook has improved.

The majority of HDFS measurable metrics remained relatively flat. Revenue grew by $100,000 to $188.1 million and outstandings dropped 0.3% to $7.5 billion. Delinquencies 30 days or more decreased notably to 3.09% of the portfolio compared to 3.25% year over year.

Harley Davidson Inc. projects that HDSF will finish 2018 flat to slightly increased.

On the retail side of things, Harley-Davidson Inc. sold 6.4% fewer bikes than the same time the year prior. This is in line with market expectations, according to a report from Robin Farley, a powersports analyst for UBS Investment Research.

“Our results in the second quarter reflect business performance that is in line with our expectations,” Matt Levatich, president and chief executive of Harley-Davidson, said in a press release. “With the focus of every employee and dealer, we are making progress building the next generation of Harley-Davidson riders in line with our long-term objectives.”

Retail strength in international markets has increased, with Harley-Davidson reporting sales growth in Europe. New bikes sales in Europe grew to 3.6% year over year. This international growth comes as Harley plans to move some of its production overseas in lieu of rising EU tariff costs, and the OEM outlined a strategy to grow its presence in foreign markets during the earnings call.

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