Harley-Davidson shares skid on sales worries

Harley-Davidson shares dropped 87 cents, or 2.2 percent, to $39.20. Over the past 52 weeks, the company's shares have traded between $32.18 and $55.

Citi's Gregory R. Badishkanian said it appears that Harley-Davidson's sales have slowed in the first two months of the third quarter.

Badishkanian, who rates the shares "Sell," said the company could post a sales decline percentage for July and August in the "mid-teens," which would follow an 8.7 percent drop in the second quarter.

"This may be due to the weak consumer environment, which has been impacting other leisure vehicle manufacturers," Badishkanian wrote in a note to investors.

For the full third quarter, Badishkanian said he expects a sales decline percentage in the "low teens," citing easier sales comparisons for September.

The analyst also said that he doesn't expect Harley-Davidson's 2009 models, which are expected to be less innovative than the 2008 versions, to boost the company's sales much.

"A weak model year 2009 product intro may result in a continuation of weak U.S. retail sales and could also result in a further moderation in faster growing international sales, particularly in light of tough prior year comparisons," Badishkanian said.