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(Reuters) -Harley-Davidson Inc’s profit tumbled 17.5% in the second quarter as a suspension of production hit motorcycle shipments, the company said on Thursday.
Net profit fell to $178 million, or $1.22 per share, in the quarter, from $215.9 million, or $1.46 per share, a year earlier.
Company executives attributed the earnings miss from production being temporarily halted in June at the company’s York, Pennsylvania, assembly plant for the second time in just over 12 months due to a parts shortage.
A slower economy compounded with higher borrowing costs is causing consumers to spend less, which is bringing demand back down to a level commensurate with supply.
Sales from motorcycles and related products fell about 4.4% to $1.19 billion in the three months ended June 30.
Harley’s price increases and surcharges for popular models have lifted the manufacturer’s earnings per share in previous quarters, but analysts say the slowing demand is reflective of consumers becoming less tolerant of price hikes.
Tighter credit for American borrowers is denting consumers’ ability to purchase big ticket leisure items. Harley has sustained margin growth through its wealthier customer base but hasn’t been as successful luring younger riders with the release of the Sportster S models and electric bikes that retail for nearly half the price point of its top selling bikes.
Worldwide retail sales were up 3% year-over-year, while bike shipments declined 10%.
The company’s financial services division saw a 19% increase in revenue growth but operating income was down 31% from the year prior.
