What happened Shares of Harley-Davidson (NYSE: HOG) were getting dragged lower after the motorcycle maker posted a disappointing second-quarter earnings report. As of 11:50 a.m. EDT, the stock was down by 8.5%. A Harley Street Glide. Image source: Harley-Davidson. So what Harley's sales dropped sharply as the company said it would manufacture fewer motorcycles this year as demand for large bikes has stumbled in the U.S. Sales fell for the second quarter in a row. Overall sales were down 6.7% to $1.58 billion with a 9.3% decline in the U.S. That figure just missed estimates at $1.59 billion. On the bottom line, earnings per share decreased from $1.55 to $1.48, which beat estimates at $1.38. The earnings beat was helped by a 10% dip in SG&A expenses, and the company promised layoffs as it said it would scale back on production. CEO Matt Levatich noted "challenging market conditions," but credited the company's ability to deliver strong margins nonetheless. Now what What really seemed to weigh on the stock was management's decision to lower guidance on motorcycle shipments as it now sees full-year shipments of 241,000-246,000, down 6%-8% from last year. Previous guidance had called for shipments to be flat to modestly down. It also said operating margin would be down 1% for the year. Management says its strategy is focused on building the next generation of Harley riders, but that is proving more difficult than expected. Millennials are not taking up motorcycle riding as fast as baby boomers did, and as more people move to cities and rural areas struggle, that trend may be difficult to reverse. Despite strong margins and an iconic brand, today's sell-off was deserved. Falling shipments are especially concerning as the economy is stronger than it has been in a decade. 10 stocks we like better than Harley-DavidsonWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Harley-Davidson wasn't one of them! That's right -- they think these 10 stocks are even better buys. Click here to learn about these picks! *Stock Advisor returns as of July 6, 2017Jeremy Bowman has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.