CHICAGO (Reuters) - Harley-Davidson Inc (HOG.N) will give investors next week a fresh look at the coronavirus pandemic’s impact on operations and offer more details of plans to turn around 117-year-old motorcycle company that has been grappling with an aging customer base.
For the quarter through June, when the virus-induced lockdowns took their biggest toll on companies, Harley’s profit is expected to plunge by 97% year-over-year to 4 cents a share, according to IBES data from Refinitiv. Revenue is estimated to decline 44% to $808.5 million (634.5 million pounds).
The company reported a 44% drop in profit in the first quarter.
Tuesday’s earnings release will come weeks after Harley announced plans to lay off 500 employees this year as part of new Chief Executive Jochen Zeitz’s turnaround strategy.
The strategy, dubbed “the Rewire,” seeks to shift focus back to more profitable heavyweight and touring bikes and core markets such as the United States.
Robin Farley, an analyst at UBS, said the move could shore up Harley’s earnings by saving costs even if it fails to address its sales problem.
The Milwaukee-based company is expected to share more details of the strategy on Tuesday.
Harley has been struggling for years to woo younger riders in the United States, its biggest market, to reduce reliance on baby boomers, who drove sales for decades. Its 2019 U.S. bike sales were the lowest in at least 16 years.
Zeitz, who took the reins in February, won praise for transforming the money-losing Puma SE (PUMG.DE) in the 1990s into one of the world’s top three sports brands. Still, finding new customers to buy big-ticket items like motorcycles in the worst recession since the Great Depression will be an arduous task.
Underscoring the challenge, Harley stock is down 22% this year compared with a 4% rise in the Dow Jones U.S. Consumer Goods index .DJUSNC.
Reporting by Rajesh Kumar Singh in Chicago; Editing by Matthew Lewis