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Why Did Harley-Davidson Decline on January 30?

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Feb. 1 2018, Updated 10:32 a.m. ET

Harley-Davidson

Harley-Davidson (HOG), which is an American motorcycle manufacturer, was among the S&P 500’s top losers on January 30. Harley-Davidson regained strength last week and surged to six-month high price levels. Carrying forward the strength, Harley-Davidson started this week on a stronger note but reversed its direction on Tuesday. The prices lost strength on Tuesday following the release of weaker-than-expected sales data.

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According to Harley-Davidson’s management, US retail sales in 4Q17 declined to $23.2 million—a decline of 11% from $26.1 million recorded in 4Q16. According to management, the decline in US retail sales is due to soft used bike prices in the fourth quarter. On the other hand, international new motorcycle sales fell 8% in 4Q17. Overall, 42,142 new motorcycles were sold worldwide in the fourth quarter, which is 10% less than the new motorcycle sales in the same period a year ago.

Despite weak motorcycle sales, the revenue in 4Q17 surged to $1.23 billion—11% growth and higher than the market estimate of $1.1 billion. On January 30, Harley-Davidson declined 8.1% and closed the day at $50.84—a four-week low price level. Harley-Davidson is part of the S&P 500 Consumer Discretionary sector, which declined 0.54% on Tuesday.

In the next part of this series, we’ll discuss how Principal Financial Group (PFG) performed on January 30.

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