Carl Sprinkle only went to a Harley-Davidson dealer to buy new foot pegs for his 16-year-old motorcycle. But then he saw it: a limited edition, three-wheeled Street Glide with a trio of ghostly eagles adorning its obsidian paint job.
Price tag: $46,000.
Sprinkle took it home after selling his camper and trading in another Harley.
"I spent an hour there arguing with myself, dropped a deposit and tried to figure out how to buy it," said Sprinkle, a 68-year-old retired union pipe fitter who lives in Indiana. "There was no way I wasn't going to have that motorcycle."
His purchase helps explain why Harley is bucking a downturn in sales of leisure products: High interest rates, punishing gas prices and broad economic anxiety have dented sales of everything from RVs to boats.
But that downturn hasn't come for Harley. In its primary market of North America, the bike maker has recorded year-over-year retail-sales growth in each of the last four quarters, and is on track for the first full-year increase since 2021. Globally, sales are up 4% so far this year.
Harley stock is up more than 60% since the start of the year, and some long-skeptical observers, who have watched the company's bike sales drop precipitously over the last 20 years, are changing their views. James Hardiman, an analyst at Citi, upgraded his rating to "buy" after seeing sales grow month after month.
"Enough of those begin to stack up, and we started to look at this through a different lens," he said.
Harley Chief Executive Artie Starrs said new models have helped to unleash pent-up demand. The three-wheeled "trikes" aimed at older riders were refreshed this year with extra horsepower and comfier suspension. The company also introduced two midtier bikes, the Super Glide and the Deadwood.
"I certainly am not going to say that we're not subject to economic conditions," Starrs said. "I'm just going to say that there's an enthusiasm and love for getting on your bike that is quite powerful, and at least from what we're seeing right now, is outrunning some of the macro factors in North America."
Dealer Jason Bremer said much of the turnaround comes down to offering products people want to buy. His three dealerships in Minnesota and Texas have sold the new trikes as fast as they can get them, he said, while the midtier bikes have also generated excitement.
"People are looking for camaraderie, and they're looking for something to do," he said. "They're looking for their next sense of joy."
David Pauloski, 45, who lives near Pittsburgh, traded in a Harley Low Rider ST for a Super Glide this year. He said his new bike's red, white and blue paint job appealed to his sense of patriotism, while its $16,000 sticker price was modest by Harley standards.
"For the first time, I saw a limited-edition Harley that was a really good value proposition," said Pauloski, a field service manager for a medical device company.
Teddy Morse, whose Ed Morse Automotive Group owns six Harley dealerships, said those relatively inexpensive motorcycles, as well as rebates and company-offered interest rates as low as 1.99%, have helped to get customers in the door.
"When you do that, pushing cheaper bikes, you're going to have a much larger pool of people who can buy," he said.
Harley is hoping to add to its sales growth next year. New additions will include the Sprint 440, the smallest bike in Harley's collection, which will retail for less than $6,000 in the U.S., and the Sportster 883, a revival of a classic model that will go for about $10,000.
Those bikes could be particularly important in Europe, which has seen retail sales decline 6% so far this year because of what the company called "a subdued economic environment."
Starrs said the Sportster once accounted for up to 40% of sales for some European dealers; it was pulled from the lineup in 2022 because the engine didn't meet the continent's clean- air standards. That issue has been fixed, the company says.
Harley predicts that by the end of this year, it will sell 135,500 to 139,000 motorcycles worldwide. Even on the low end, that would beat last year's total of 132,535.
But it is still a fraction of the 344,000 bikes sold during Harley's peak year of 2006. Hardiman said longstanding concerns about the brand's aging ridership haven't gone away.
"We're going to need a lot more evidence to be convinced that there still aren't demographic headwinds that weigh on this business," he said.
Comments