Harley-Davidson (HOG) finally showed its investors some get-up-and-go after a challenging year.
On Thursday, the 113-year old bike manufacturer reported earnings of 22 cents a share, beating estimates for 20 cents a share, although total revenue of $1.01 billion fell short of forecasts for $1.03 billion. Importantly, Harley-Davidson said its U.S. market share stood at 51.4%, unchanged compared to the year-ago period. The result marked a turnaround from the third quarter, when market share fell about 3.9 percentage points year-over-year.
Harley credited new products, an increase in marketing and less severe industry discounting compared to the previous year as reasons for the stabilization in market share. Shares of Harley-Davidson rose by as much as 5% on Thursday, but have fallen back to a 1% gain.
Harley's comments on market share also represented a change in tone from much of 2015, when the company saw its market share slide as Japanese bike makers used the strong U.S. dollar to offer intense discounts in the U.S. For instance, Suzuki recently announced its North America sales surged 50% in December to a record, the company's sixth straight month of year-over-year sales gains.
Not helping matters either were inroads made by Polaris' (PII) Indian brand. According to Polaris, retail sales of Indian motorcycles increased approximately 80% in 2015, helped by the release of the updated Scout model.
Despite some signs of progress, Harley did also offer up some concerns that piqued the interest of analysts. The company lowered its 2016 shipment growth guidance to 1% to 3% from the 3% to 5% shared on an October earnings call. Meanwhile, inventories ended the year up about 31% from 2014 levels, which the company blamed on a higher amount of finished goods (bikes) and parts, as well as general merchandise inventory.
"While this was clearly a difficult step to take given management's unprecedented decision to provide the 3-5% [shipment] target just three months ago, we absolutely believe that lowering expectations is the right move, especially in light of recent macro-economic developments," said Wedbush analyst James Hardiman in a note.
TheStreet talked with Harley-Davidson president and CEO Matt Levatich about the quarter and outlook for 2016.