• Operating Income Margin: 12.1% for the quarter.
• Global Retail Sales: Down 21% in Q1; North America down 24%, EMEA down 2%, APAC down 28%, LATAM down 6%.
• Global Wholesale Shipments: Down 33% at the end of Q1.
• Dealer Inventory: Down 19% globally; US inventory down 23%.
• HDFS Operating Income: Increased by 19% for the quarter.
• Consolidated Revenue: Down 23% in the first quarter.
• Consolidated Operating Income: $160 million, with a 51% decline at HDMC.
• First Quarter Earnings Per Share: $1.07.
• HDMC Gross Margin: 29.1%, down from 31.2% in the prior year period.
• Operating Expenses: $199 million, $24 million lower than prior year.
• LiveWire Operating Loss: $20 million.
• LiveWire Unit Sales: 33 units in Q1 compared to 117 units in the prior year.
• Operating Cash Flow: $142 million, up $38 million from the prior period.
• Total Cash and Cash Equivalents: $1.9 billion, $467 million higher than the prior year.
• Share Repurchases: 3.4 million shares bought back at a value of $87 million in Q1.

• Warning! GuruFocus has detected 7 Warning Signs with HOG.

Release Date: May 01, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Harley-Davidson Inc (NYSE:HOG) reported a better-than-expected operating income margin of 12.1% for the quarter, driven by strong product mix and tight cost control.
• The Financial Services business (HDFS) delivered a 19% increase in operating income, showcasing its strength and potential for further leveraging.
• The launch of the limited production CVO World light motorcycle received an outstanding response, with expectations to sell out from preorders.
• Harley-Davidson Inc (NYSE:HOG) plans to introduce new entry-level products in smaller displacements, aiming to expand its portfolio and future growth.
• The company achieved $24 million in productivity savings in Q1, primarily from logistics and supply chain initiatives, contributing to its cost management efforts.

Negative Points

• Global retail sales were down 21% in Q1, with a significant 24% decline in North America, primarily due to low consumer confidence and an uncertain macro environment.
• The APAC region experienced a 28% retail decline, driven by softness in China and Japan, impacting overall sales performance.
• Harley-Davidson Inc (NYSE:HOG) withdrew its 2025 financial guidance due to uncertainty in the macroeconomic and tariff environment.
• LiveWire, the company's electric motorcycle segment, faced challenges with lower unit sales and a slower-than-expected EV adoption rate.
• The company is dealing with significant tariff impacts, particularly from China, which could result in a $130 million to $175 million impact in 2025.

Q & A Highlights

Q: Regarding HDFS, what might the economics of a long-term strategic partnership look like for Harley-Davidson? A: Jonathan Root, CFO & President of Commercial, explained that they are in early discussions about HDFS. The focus is on demonstrating the premium value of HDFS and ensuring long-term funding optionality to maintain class-leading returns and attractive offers for customers and dealers. More details will be provided in the next quarter.

Q: What has changed from the prior conclusion that HDFS was strategic? A: Jonathan Root stated that the aim is to provide a market-based view of HDFS's value. They still see HDFS as strategically important and are not planning to sell it entirely. The current discussions are part of good governance to evaluate the business's value periodically.

Q: Can you provide more details on the tariff impact and mitigation strategies? A: Jochen Zeitz, CEO, mentioned that the tariff impact is primarily due to China, with a potential cost of $75 million to $100 million. They are actively engaging with administrations to mitigate impacts and are adjusting supply chains. The situation remains fluid, and they hope for more clarity in the coming months.

Q: What led to the decision to bring back entry-level bikes, and how will the model year timing shift affect the business? A: Jochen Zeitz explained that the entry-level bikes are part of a strategic expansion, aiming to offer competitive and profitable products. Jonathan Root added that the model year timing shift to fall will extend the selling season and align with dealer feedback, requiring a multiyear effort to implement.

Q: How is Harley-Davidson addressing the challenges in the EV segment with LiveWire? A: Jochen Zeitz noted that LiveWire is facing headwinds due to slower EV adoption, lack of incentives, and infrastructure issues. They are focusing on cost savings and reducing cash burn to achieve a sustainable business model. Karim Donnez, CEO of LiveWire, added that they are exploring opportunities in specific EV market segments.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.