By Christiana Sciaudone
Investing.com -- Harley-Davidson (NYSE:HOG) jumped 21% after reporting its best profit in five years. It's still not clear if it's been able to reach Millennials.
Earnings per share of $1.05 for the third quarter beat the estimated 31 cents on sales of $964 million, versus the expected $864 million.
Chief Executive Officer Jochen Zeitz, named in May, appears to be driving much-needed change at the legendary company. In July, Harley said it would cut 700 positions across global operations and announced it was overhauling its global operating model to become a “leaner, more nimble” organization.
Results indeed show progress, including $250 million cash savings including SG&A and capital reductions expected in 2020; $115 million annual savings from restructuring actions taken expected starting in 2021; and a 30% reduction in global dealer inventory compared to third quarter 2019.
"The company's new operating model eliminated duplication and complexity across global operations, resulting in significant expected ongoing SG&A savings and vast improvements in agility and efficiency," the company said in a statement.
Harley-Davidson will exit 39 markets where volume or profitability doesn't support continued investment and focus on its 36 highest potential markets.
Still, there's little evidence that the brand is reaching younger riders, who, according to a 2019 UBS report, are interested in bikes for ease of transportation rather than riding to be cool.
For the first nine months of the year, sales were down 22% compared to in 2019, and profit was lower by 76%. Retail motorcycle sales dropped 19% in that time in North America and 18% worldwide.