Monday February 23, 6:56 pm ET
Shares of Harley-Davidson tumble as overall market falls and investors worry about 2009 sales
NEW YORK (AP) -- Shares of Harley-Davidson Inc. fell Monday, as the overall market dropped and investors continued to fret about the company's 2009 sales amid tight credit markets and a weak economy.

The iconic motorcycle maker's shares fell 51 cents, or 4.7 percent, to close at $10.31, after dropping to $10.19 earlier in the session. Over the past 52 weeks, Harley-Davidson shares have traded between $10.07 and $48.05.

Baird's Craig R. Kennison said he expects Harley-Davidson sales to be down about 23 percent this year.

"The government 'stimulus' package contains pork for Harley buyers -- which may drive fence-sitters to buy," Kennison wrote in a note to investors. "Meanwhile, our near-term stock outlook hinges on the TALF program -- which may become active in March."

According to a recent Baird survey of 72 U.S. dealers, demand for Harley-Davidson motorcycles was down 10 percent to 15 percent in January and early February, but sales volumes for the period were still better than expected, partially as a result of a trade-in promotion, Kennison said.

Those numbers put the company on track to sell 58,000 to 60,000 in the first quarter, ahead of his estimate of 53,000 bikes, Kennison said.

But while average dealer inventories are down about 19 percent from the same time last year, they're still slightly higher than dealers had planned and fewer bikes are selling at or above the suggested retail price.

"We would be concerned if this trend persists, but note that Harley planned to ship aggressively in quarter one so that it has time to slow production in quarter two to restructure," Kennison said.

At the same time, the majority of surveyed dealers reported that credit conditions have gotten worse, as the company's financing arm continued to tighten its lending policies, he said.

 

I am buy stock today...price is right!

 

The dealers in my area all say they're doing great. Go figure.

When the times get rough and you might not have a job next week, riding is the only source of comfort you got. I'm on a hold with major purchases but I just dropped over $1000 for heated gear

 

It ain't all about HD.... the entire country is feeling the weight of the stock market crashing down... Dow closed at 7114 today down another 250.... that's 1997 value btw.... HD is just one small fish in the big pond.

 

With dealer inventories down 19% and sales not declining as much as expected inventories could really be low by the middle of the summer. Last year the dealers here were begging for bikes in July. I have noticed they have stock piled about 40 extra used bikes over the winter. Our riding season is just starting now here in TX.

 

Yea its not just Harley it is everyone. They will survive.

 

Unfortunately, this economy hasn't bottomed out yet. Every day that goes by, stocks drop, companies lay off more, and housing continues to drop. I don't see HD as being immune to the problems especially considering they are premium priced. They sold a lot of 09s to customers who traded in late models. What are they going to do to keep this going? I don't see how they can attract enough new riders to buy when the market demand for premium bikes is shrinking. I sure hope this stimulus package works but I seriously doubt it will...

I think we're in for at least 2-3 more tough years...

 

Nobody is immune, but the darn banks have got to start opening the purse strings to businesses - I know several businesses that are profitable, but are having trouble getting a revolver to finance the business - this used to be easy. because of this, they can't produce as much.
And the bankers tell congress they are lending a lot - bunk.

Don't worry about HD - they survived the depression, they are not going anywhere.

 

A lot of companies are in dire situations now because of theri CEO's actions. Harley and other companies bought stock back when it was at all time high by borrowing money. This was totally idiotic. But I guess the CEO's had bonuses based on how high the stock price was. They got short term loans and now they are coming due and they can''t get new loans. And if they sell stock they won't get squat for it.

I highly doubt that Harley is doing as well as they are saying. The area I live in has still hardly any unemployment and a bunch of high paying jobs but the local harley dealer has a ton of bikes and is offering 1000 dollars of free accessories if you buy a bike. THings will only get worse when dealers can't sell bikes when the riding season starts. Dealers going belly-up will lead to even less bikes leaving the factory.

 

Market has another year of downturn -- I'll load up on HOG when it hits $3.00 (and then live high off the hog when it trades for $55 7 to 10 years from now).