Harley Davidson (HOG) March Retail Sales Up Strongly - UBS

UBS analyst, Robin Farley, thinks March U.S. retail sales at the dealer level for Harley-Davidson (NYSE: HOG) were up close to +10% YOY, significantly better than recent Street expectations for March. The warm winter - with avg temperatures 16 degrees warmer in the Northeast in Feb and 11 degrees warmer in March vs prior year - could increase sales and also pull forward some sales from Q2. March is the most meaningful month of Q1, typically making up about half of Q1 retail sales in US, and 11% of FY. We note that March comps for Harley are easier YOY vs. Jan+Feb combined. With Jan'16 retail sales for HOG down in the U.S. and Feb up low single digits, they believe HOG US retail sales overall are up around 5% in Q1. They believe growth in March was led by Northeast region with TX and Western regions not as strong.

Harley's guidance of +1-3% shipment increase is based on HOG's assumption of worldwide retail growth in 2016. After 8-9 consecutive qtrs of US market share loss, Harley reduced its 2016 shipment guidance in Jan to +1-3% (or 269k-274k units), down from +3-5% previously. While high end of the FY range may still be too high, the warm winter means HOG is likely to maintain FY shipment guidance.

The analyst is ahead of the Street with EPS of $1.31 vs. consensus at $1.29. No change to Buy rating or $57 PT.

For an analyst ratings summary and ratings history on Harley-Davidson click here. For more ratings news on Harley-Davidson click here.

Shares of Harley-Davidson closed at $44.92 yesterday.

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