Harley Grows Up

Legendary hogmaker, Harley-Davidson (HDI), is facing a mid-life crisis. How do you market a plaything for older white guys to a mass audience?

As the Baby Boomers who transformed Harley’s rumbling, lumbering bikes from countercultural totems into American icons enter their senior years — the leading edge of the generation is turning 60 this year — they’re increasingly in the market for knee and hip replacements (Biomet!), not Harley’s notoriously bone-shaking bikes.
That’s forcing the Milwaukee, Wisconsin-based company to scramble to find new customers among women, blacks and Hispanics — groups that have not been traditional Harley-Davidson riders.
The quest has involved the development and rollout of new products, like the 883 Sportster Low, built for smaller, lighter riders, and new marketing efforts, like Harley’s TV ad campaign during the NCAA tournament this spring.
And the effort is showing some signs of success. Female ridership has quintupled in recent years. Today, women like Janeen Wingo, a 33-year-old resident of Calumet City, Illinois, who bought a Harley-Davidson 1200 Sportster last summer, account for 1 in 10 of the company’s sales — up from 1 in 50 just 15 years ago.

Here are Harley’s sales and earnings for the past ten years:
Year………..Sales (mil)………EPS
1996……….$1531.2…………$0.47
1997……….$1762.5…………$0.57
1998……….$2064.0…………$0.69
1999……….$2452.9…………$0.87
2000……….$2906.4…………$1.13
2001……….$3363.4…………$1.43
2002……….$4091.0…………$1.90
2003……….$4624.3…………$2.50
2004……….$5015.2…………$3.00
2005……….$5342.2…………$3.41
Not a bad trend. Wall Street is expecting 2006 EPS of $3.72 on sales of $5.6 billion. The stock is currently going for about 13 times this year’s estimate.

Posted by Eddy Elfenbein on March 15th, 2006 at 11:22 am

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