NEW YORK • Harley-Davidson Inc’s profit topped estimates even as tariffs that Europe implemented in retaliation to US President Donald Trump’s levies on steel and aluminium raised costs.

Earnings per share on a GAAP basis dropped to 80 US cents (RM3.30) in the first quarter, the Milwaukee-based manufacturer said in a statement yesterday.

Excluding restructuring and tariff costs, profit slumped to 98 cents a share, though that exceeded analysts’ average estimate for 85 cents.

While motorcycle revenue was down and operating income slumped due in part to tariffs brought about by Trump’s trade policies, expenses and restructuring charges fell.

Harley is moving some US production overseas to sidestep European Union (EU) tariffs that jumped to 31% from 6%.

Last year, this sparked the ire of Trump, who said he’d back a boycott of the company’s bikes.

Tariffs will cost the company between US$100 million and US$120 million in 2019, executives said in January.

In a tweet shortly after Harley reported results yesterday, Trump said the tariffs were “so unfair” to the US and that he’ll reciprocate.

US retail sales fell 4.2% in the first three months of the year, the ninth consecutive quarterly drop.

Harley is struggling to attract younger riders as consumer tastes shift away from pricey, heavyweight motorcycles.

It debuted its first electric motorcycle, LiveWire, in January and acquired an e-bike company in March.

Sales in Europe and Asia — regions CEO Matt Levatich has pinned hopes for growth on — fell 0.6% and 4% respectively.

Levatich wants to derive 50% of revenue from outside the US by 2027, according to a turnaround plan he presented last summer.

A new plant in Thailand is supposed to help Harley avoid tariffs, but it’s still unclear whether the EU will exempt Harley’s Asia-made bikes from levies, according to Wells Fargo & Co.

Harley shares rose 2.2% to US$40.60 as of 7:01am in New York yesterday, before the start of regular trading.

The stock has rallied 16% this year, in line with broader market gains, after closing at an eight-year low on Dec 24.

Harley is still investing in the US — it committed to put US$65 million into its Milwaukee facility and US$10 million into its Tomahawk, Wisconsin, plant as part of a five-year contract with the United Steelworkers that was ratified this month. — Bloomberg