Via blogs.marketwatch.com/greenberg:
Is it just me -- or is this there something about today's earnings warning from Harley Davidson (hog) that doesn't necessarily ring true? Either Harley is one of the few companies telling the truth as the ultimate canary in the coal mine for high-end, frivolous products or it's using this quarter to conveniently and smartly start unwinding the stuffing of its past. Or maybe, just maybe, it's a little of both! In warning that third quarter shipments and full year 2007 and 2008 earnings would be lower than expected -- while withdrawing guidance for 2009, altogether -- the company cited "a difficult time for the consumer." Well, duh! Especially in the wake of the credit crunch. However, critics have long pointed out that Harley, the mother of cult stocks, has long been stuffing its distributors with excessive inventory while sparking sales through its its internal finance operation, which it turn has sold the good, bad and ugly loans via securitization. (Doug Kass, who is short Harley, has long been pointing out rising delinquencies in the loan portfolio.) The trouble with stuffing, as we all know, is that it works until it doesn't. For Harley, the "doesn't, is the sudden inability of its customers to either tap their homes for equity and/or get financing from Harley, which no doubt is finding it harder to find buyers for its loans.
which has left its tire marks on more than its share of critics and short-sellers,
$49.16 (09/08/07)
