On May 19, 2022, Harley-Davidson halted production at its plants in Menomonee Falls, Wisconsin, and York, Pennsylvania. The shutdown was scheduled to last two weeks, potentially crippling the Motor Company’s Q2 2022 performance. Despite the hiatus lasting longer than the two-week estimate, Harley still reported a $215.8M profit in this year’s second quarter.
According to Harley-Davidson CEO Jochen Zeitz, the manufacturer closed production facilities and suspended vehicle shipments due to brake hose supply issues. Harley addressed the holdup and resumed production in early June. During that time, the Bar and Shield’s lower operating expenses and tariff reductions on steel and aluminum in the European Union helped the firm turn a profit.
“And despite the macro uncertainty, (Foreign Exchange Market), and inflationary pressure, and supply chain issues, we expect to deliver on our Hardwire ambitions,” stated Zeitz. “We believe that the Hardwire strategy is working. We're making significant progress in transforming our business and now it's the time to elevate our ambition beyond the current environment.”
Harley continues to contend with resource shortages, shipping delays, and inflation, but the brand is passing off those costs to customers. On average, prices on new and used Hogs have increased by 1.3 percent. Apparently, Harlistas don’t mind the modest price hike either, with the MoCo claiming that post-pandemic demand for leisure activities and road trips stabilized its motorcycles sales.
Still, the company posted a five-percent decrease in sales due to its inventory backlogs and extended restock intervals. In turn, those sliding sales led to a four-percent drop in revenue, which amounts to roughly $1.47 billion. Fortunately, reduced operation costs and a lucky break with the E.U. offset the production and sales woes.
“We continue to work through the knock-on effect of this action,” concluded Zeitz. “We've ramped up production, and we believe that we'll be able to make up for the lost production throughout the remainder of the year.”
Harley, ultimately, turned a profit in Q2 2022, but the brand isn’t out of the woods yet. We’ll see if they can make up for lost sales in Q3 2022.