Harley-Davidson Stock Dips After Solid First Quarter Sales

Blame good early-season riding weather.

Shares of Harley-Davidson nosedived yesterday due mostly to concerns that there might be a slowdown in demand for H-D’s high-end bikes. The stock tumble comes on the heels of a 26 percent jump in sales during the first quarter of this year, but  Harley-Davidson dealers say U.S. retail sales only went up between 1 percent and 3 percent in April and early May.

So why the sudden drop in fortunes after a stretch of solid performance?

The Motor Company recently announced that first-quarter profits were up a healthy 44 percent on strong U.S. demand for its machines, but company spokespersons said unusually warm winter and spring weather around the U.S.  prompted some riders to buy early, and those early-season buyers drained off sales which would usually occur as the weather improves. They added that the company was ready for the slowdown and weren’t taken by surprise when sales moderated during the initial stages of the second quarter.

There are other forces in play among investors. They may well be worried about the news that some Harley-Davidson dealers says sales are hurting due to shortages of inventory, and while growing scarcity should help boost prices and margins for dealers, it does slow down traffic in showrooms over the long haul.

Harley-Davidson Inc. stock prices fell $2.40, or 4.7 percent, to $48.27 after dropping as low as $48.04 earlier in the day on Friday.

Overall, the news is nothing but good for the Men of Milwaukee as vver the past 52 weeks, the Motor Company’s shares have traded between $31.50 and $54.32. Since the beginning of this year, Harley shares have gained about 30 percent, and that makes the long-term outlook good for the iconic maker of American motorcycles.