Beginning[ edit ] Inyear-old William S. Harley drew up plans for a small engine with a displacement of 7. Over the next two years, Harley and his childhood friend Arthur Davidson worked on their motor-bicycle using the northside Milwaukee machine shop at the home of their friend, Henry Melk.
Long only Summary International revenue growth outpaced U. As the company expands their product mix internationally and adds dealerships, there are further opportunities to grow.
Short-term risks include currency headwinds and volatile oil prices. HOG increased their revenue nearly 5. The increase in revenue was due to the introduction of their brand to new demographics in the United States and new geographical markets internationally, extending their product line offerings in international markets, and continuing to design and produce cutting edge motorcycles.
In this article, I will analyze whether the company can sustain this revenue growth going forward, and determine whether there are any obstacles on the horizon. Infor the third consecutive year, sales to this group grew at more than twice the rate of sales to core customers. It is important for Harley-Davidson to continue promoting their brand to different demographics and create the brand loyalty with customers of all demographics in the United States.
Inthe company saw slow growth in the United States as sales were up 1. The strongest growth came from the Asia Pacific Region, which saw growth of Based on this international growth, International Revenue year-over-year growth table obtained from the January 29, Conference Call Slide Presentation.
I expect these impressive international growth rates to continue going forward as the company expands their international dealerships.
Sincethe company has added new international dealerships, which was on the higher side of the estimated guidance offered in When providing guidance on dealership expansions, management expects openings to remain consistent with More importantly, management predicts that international dealerships already opened will see better product selection as they expand their distribution network and increase their brand relevance by being able to deliver their full array of products.
I believe the most exciting motorcycle the company currently has in the product pipeline is their first electric motorcycle referred to as Project LiveWirewhich was introduced in It is currently in the demo phase in the United States with expectations for it to be expanded internationally in I think this is an innovative and promising direction for the company.
The motorcycle is geared towards a short commute, as the estimated range is just 53 miles and needs a charging time of 3. Despite these limitations, during the US demo phase, the company has seen positive feedback on the more than demo riders saying the motorcycle exceeded their expectations.
Further proof of this success is the fact that the company intends to introduce the electric motorcycle into the European, Canadian, and Asia Pacific markets in And when it comes to introducing a motorcycle, there is no one I trust more than Harley-Davidson.
In addition to the electric motorcycle introduction, the company also introduced other new motorcycles such as: Project Rushmore - a touring motorcycle with new innovations and technical enhancements Freewheeler - a hot-rod like trike with ape hangers, bobtail fenders, and a lower ride The company is also making improvements and adjustments for a new model of the CVO Street Glide.
I believe with these product implementations and vast portfolio of products, Harley-Davidson will remain the trendsetter in the motorcycle industry. Furthermore, these products will continue to create brand excitement to retain loyal customers in the US as well as attract customers in international markets.
Risks With the recent decrease in worldwide oil prices, it does give consumers more discretionary income to purchase motorcycles and afford the higher insurance prices; however, it does reduce the number of buyers trading in their cars for motorcycles like we saw in Consumers are no longer as committed to buying an efficient fuel mode of transportation and are turning back to larger trucks and SUVs.
This devaluation had an unfavorable revenue impact of approximately 2. This is a pretty large impact on gross margin percentages.
Per management, they are expecting continued unfavorable impact on revenues going forward due to a strong dollar with estimates for the first quarter at 3. In Q1the company increased their dividend The forward yield of this dividend was 1. I believe that the company has a loyal customer base and is capable of growing it with introductions of new products.
Finally, the company remains committed to rewarding their shareholders with buybacks and dividends. Based on these reasons, I believe Harley-Davidson is an attractive long-term investment.
The author has no positions in any stocks mentioned, but may initiate a long position in HOG over the next 72 hours. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it other than from Seeking Alpha.
The author has no business relationship with any company whose stock is mentioned in this article.During its period of peak demand, during the late s and early first decade of the 21st century, Harley-Davidson embarked on a program of expanding the number of dealerships throughout the country.
dear fellOw sharehOlder: Harley Davidson has thrived on its ability to see opportunity, to take on challenges, and to adapt to changing market needs and a changing world for more than a century. It was true at the dawn of the Company, during America’s trans-. As Harley-Davidson's long-distance FLH touring models were the first to receive the Evolution powerplant when the new engine was introduced back in , the company had, by the s, invested much research and development into their flagship line.
Harley Davidson Case Analysis I. SITUATION ANALYSIS: Harley Davidson had its centennial celebration of their motorcycle production industry in , meaning it had its start in Up until the later s, the company primarily focused on producing the heavyweight motorcycles that the majority of aging male baby boomers desired.
Harley-Davidson (NYSE:HOG) increased their revenue nearly % to $ billion in , up from $ billion in The increase in revenue was due to the introduction of their brand to new. Increasing revenues over time are generally a good sign of company's growth.
While a bit obvious, if a lemonade company has sold 30 million in revenue and has 10 million in costs of goods sold, the company's revenue is still 30 million.