Did Trump’s Attacks Hurt Harley-Davidson’s Sales? It’s Saying Little

Harley-Davidson on Tuesday reported a surprisingly large decline in U.S. motorcycle sales.

The company and its executives spent much time discussing the hit. Curiously, though, there was no mention of President Donald Trump’s attacks on the company and what role they might have played in the poor sales.

Harley-Davidson’s situation highlights the predicament faced by companies targeted by Trump. His administration’s trade policies are hitting the businesses of many companies. If executives respond, they risk provoking a public rebuke from Trump that may reduce demand for their companies’ products. But if his comments could be affecting their businesses, investors expect some details.

Harley-Davidson announced at the end of June that it was shifting some of its production out of the United States to avoid retaliatory tariffs that the European Union had imposed. After the announcement, Trump criticized the company several times on Twitter and said he supported a boycott of its products.

Harley-Davidson’s overall profit increased in the third quarter, but its retail sales in the United States plunged 13.3 percent from a year earlier, more than double the decline in the second quarter.

“There was an inexplicable acceleration in the magnitude of the decline in U.S. retail sales,” said Rommel Dionisio, an analyst at Aegis Capital. “In a fairly strong economy, it took many investors by surprise.”

The sharp slowdown may have had little to with Trump’s comments. Going into the third quarter, Harley-Davidson already faced a long-term decline in demand for its motorcycles in the United States as well as a glut of attractively priced used vehicles. Senior Harley-Davidson executives discussed such challenges on a conference call Tuesday, but they said nothing about the possible effect of Trump’s attacks.

“We have no evidence to suggest that trade and tariff issues impacted customer intent to purchase,” Patricia Sweeney, a company spokeswoman, said in an emailed statement after the conference call.

Harley-Davidson’s reticence about Trump’s comments may shield it from further criticism. But public companies are required to give shareholders a timely and relatively detailed assessment of any significant forces affecting their financial results. Staying silent about the possible harm done by Trump’s attacks may seem to be a wise public relations move, but it could also keep important information from investors.

Some analysts said they saw no evidence that Trump’s tweets had a meaningful effect on Harley-Davidson’s third-quarter results.

Felicia Hendrix, an analyst at Barclays, said that the quarter’s sales were mostly in line with recent trends and that September’s sales were quite strong. Customers, she said, had held back on purchases early in the quarter in anticipation of the release of new products later in the period.

“None of our dealer checks would indicate that there was any fallout from the Trump comments this summer or that they felt that customers were boycotting their stores,” Hendrix wrote in an email.

Trump’s criticism may also have made Harley-Davidson’s products more attractive to customers who don’t support him.

“This is a pretty divided nation,” said Jaime Katz, an analyst at Morningstar, “so for every customer that supports Trump’s boycott, there is probably one who doesn’t support it.”

Still, Harley-Davidson’s appeal to older blue-collar American men, a group that has lent solid support to Trump, most likely meant his calls for a boycott fell on receptive ears.

“I believe it was a temporary factor in the industry in impacting U.S. sales of Harley-Davidson motorcycles,” said Dionisio, the Aegis Capital analyst.