Harley-Davidson's (HOG) - Get Report impressive first-quarter earnings beat was somewhat overshadowed by continued sluggishness in the U.S.

On Tuesday, the legendary motorcycle maker reported first-quarter earnings of $1.36 a share, handily beating Wall Street estimates of $1.29. Spurred by sales gains in Asia, Europe and Canada due to increased marketing and new product introductions, overall revenue rose 4.3% year over year to $1.58 billion. Analysts expected $1.5 billion in sales.

Harley-Davidson, which has recently seen its stock come under pressure over concerns about the health of its business, managed to alleviate some concerns by reiterating its financial targets for the year. The company said it still expects to ship 269,000 to 274,000 motorcycles this year, an approximate 1% to 3% increase from 2015. Operating profit margins are also anticipated in a range of 16% to 17%.

But for some investors concerns may linger due to challenges in the core U.S. market that persisted into the first quarter.

Harley-Davidson's market share at the end of the first quarter stood at 50.9%, down from 51.4% in the fourth quarter. In the year-earlier first quarter, Harley's U.S. market share was 51.4%. First-quarter sales in the U.S. fell 0.5%, even as the company ramped up its marketing efforts. Harley-Davidson pinned the blame on increased discounting by competitors and continued weakness in areas of the country that are dependent on the oil industry.

As one Wall Street analyst recently put it, Harley-Davidson continues to get squeezed in the U.S. from several factors.



"As is usually the case with Harley dealers in election seasons, many pointed to the political environment and economic uncertainty as the main factors [for sluggish sales], and from an economic standpoint, dealers in heavy agricultural and energy regions have been the hardest hit, as has been the case for some time," said Wedbush Securities analyst James Hardiman in an April 12 note to clients. In addition to economic uncertainty causing people to delay buying a bike, Harley is still feeling the heat from a key competitor.

Hardiman continued, "We estimate that 80%-90% of Harley's overall market share losses in 2015 went to Polaris (PII) - Get Report , and that even after stripping out auto-cycles (Slingshot and Spyder), Polaris gained about half of Harley's lost share."

In addition to increased marketing, Harley-Davidson is responding to its U.S. share loss by introducing new bikes. The company began shipping two new cruiser bikes in March -- the Low Rider S and the CVO Pro Street Breakout. On Monday, Harley-Davidson debuted the Roadster model, which will begin shipping in May.

For its part, Polaris has announced two new bikes over the last several months: the Scout Sixty (launched in November 2015) and a second model in its popular Scout cruiser lineup called the Indian Springfield (launched in March 2016).