What happened
Iconic motorcycle maker Harley-Davidson (NYSE: HOG) surprised investors with an announcement this morning that is punishing its stock. Shares sank more than 11% in early trading, and remained down 8.1% as of 10:38 a.m. ET.
So what
Harley put out an astonishing statement this morning announcing that it is suspending all vehicle assembly and shipments for the next two weeks, with the exception of its new fully electric bike. The company said that late Tuesday it received information from a third-party supplier "concerning a regulatory compliance matter relating to the supplier's component part."
Image source: Getty Images.
Now what
In its public statement, Harley qualified the shutdown, saying it was being done "out of an abundance of caution." The company didn't expand on what the regulatory issues might be for the supplier. A spokesperson told a local news station near the company's York, Pennsylvania, manufacturing facility, "the company is committed to finding a solution and resolving this situation in a matter of urgency."
Harley shares were already in a downtrend, and today's drop is contributing to a three-month decline of more than 20%. Like many other manufacturers and retailers, Harley has been dealing with supply chain issues and rising costs. In its first-quarter report last month, the company said sales grew 5% year over year, but net income declined 14%.
Management said at the time it was confident it would see an improvement in the supply chain situation in the second half of the year. Today's surprise news of a two-week production suspension certainly won't help the company get back on track any sooner.
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