April 27 (Reuters) – Harley-Davidson Inc (HOG.N) on Thursday reported better-than-expected first-quarter outcomes at the same time as retail gross sales in North America fell, indicating a softness in demand within the bike maker's largest market as a result of inflationary pressures.
Shares of Harley-Davidson had been down about 3% in afternoon commerce as first-quarter retail gross sales in North America fell 17%.
The earnings beat was aided by pent-up demand for its widespread fashions, however recession fears, in addition to international market volatility, are signaling that demand for bikes will begin to dissipate as shoppers start to drag again on leisure purchases, analysts mentioned.
“It's clearly clear in an atmosphere of rising charges and inflation that there's some moderation in buyer habits,” Chief Business Officer Edel O'Sullivan mentioned on a name with analysts.
The corporate additionally reaffirmed its full-year forecast for income development of 4-7% for its bike division, disappointing traders who had been searching for an upward revision.
“The very fact they did not increase steering following their huge Q1 beat is elevating fears that the steadiness of the 12 months may very well be weaker,” mentioned Garrett Nelson, senior fairness analyst at CFRA Analysis.
Total, gross sales from bikes and associated merchandise rose 21% to $1.56 billion, pushed by an increase in wholesale shipments and continued worth will increase.
The corporate's monetary companies division noticed a 32% decline in development, affirming investor fears that buyers are forgoing borrowing money as a result of larger rates of interest.
Harley-Davidson reported a web revenue of $2.04 per share, beating analysts' expectations of $1.39 per share, in accordance with Refinitiv.
Income from the bike division got here in at $1.56 billion, whereas analysts had been anticipating $1.36 billion.
Reporting by Kannaki Deka in Bengaluru
and Bianca Flowers in Chicago
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