Harley-Davidson Financial Services increased its origination volume in the second quarter despite inventory constraints plaguing the powersports industry.
New retail originations increased 29% year over year to $1.2 billion, driven largely by higher new motorcycle sales and strong used motorcycle origination volume, Chief Financial Officer Gina Goetter said on Wednesday’s earnings call. New retail motorcycle sales increased 43% YoY to roughly 48,200 units.
Still, the captive’s penetration rate dropped to 65.3% of new motorcycles sold, down from 69.3% in the same reporting period last year. Inventory at new retail Harley-Davidson stores is down to about 14,000 units, down from 23,000 units last quarter and 27,000 units last year.
Meanwhile, accounts 30-plus-days past due increased 46 basis points YoY to 2.21% following a decrease in payment extensions. However, annualized net charge-offs remained 103 bps below last year’s level at 0.84%, largely due to recent federal stimulus packages, Goetter said, noting that credit loss provisions decreased $75 million YoY.
“Net interest income was favorable for the quarter, driven by lower average outstanding debt and cost of funds as compared to the second quarter of last year,” Goetter said.
Shares of Harley-Davidson, Inc. [NYSE: HOG] were trading down 1.51% to 40.03 at market close today. The motorcycle manufacturer has a market capitalization of $6.15 billion.
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