The motorcycle manufacturer's sales hit a wall this spring, deepening the gloom enveloping the iconic American company.
is the most important time of the year for Harley-Davidson (HOG, news,
msgs). It sells about a third of its bikes in April, May and June,
analysts say, as the weather warms up and bikers itch to hit the road.
After the horrible year Harley has had, I can only imagine the company was hopeful for a miracle this spring. But that didn't happen. Analysts at UBS say retail sales at Harley plummeted 35% in April and May, according to Barron's.
Tell us: Would you buy a Harley?
And so Harley's problems continue. Americans still love their motorcycles, they just don't love brand-new Harleys. Here are the biggest problems the company faces:
The used motorcycle market does a brisk business.
Harley buyers are getting older. Only 12% of buyers are under 35.
Harley offered no-money-down financing to subprime buyers who either couldn't or wouldn't repay their loans. As a result, its financing arm is in trouble with delinquent loans and credit rating concerns.
The company has cut back shipments to retailers in hopes of bringing down inventory. Harley also had to close plants, lay off employees and cut production this year.
The share price has been sliding since the beginning of May.
Last year at this time, the share price was nearly $40. It plunged below $9 in March, bounced back above $20 in May, and these days is lingering in the $15 to $17 range.
Friday, Citigroup cut its rating on Harley to sell. Barron's thinks the stock may have topped out in May.