Harley Davidson (HOG) Running on Fumes - Short

I mentioned many times that the days were numbered for HOG. Primarily because I believe that US customers are tapped out and may in fact have been swelled by easy financing.

I was right.

The background is still pretty decent: Revenue up 17% YoY and Earnings up ~25%.
HOG's earnings show a smart drop in US sales of 5.5%. International sales perked up (given the drop in the dollar, they should). The US makes up 71% of sales.

Harley stood by their 2008 guidance of 17% EPS growth. But I don't believe it. They were surprised by the drop in US sales. And this is basically the big quarter for them, when everyone is out tooling around.

My premse has always been that they were a toy bought by blue-collar workers who were suddenly made wealthier via the housing boom (construction jobs, for example). As everyone knows, those folks are struggling to make house payments now. They aren't buying new bikes - they are selling the old ones.

I went on Craigslist. Almost all Harleys for sale are in what I call blue collar neighborhoods.
Go on ebay: about 30% of the Harley's for sale are 2005~2007 models. Need cash, anyone?

Last time I checked, times are getting tighter for the working man. And this is a working man's toy.