MW Harley-Davidson's stock slips after Q4 loss amid 'cyclical headwinds for discretionary products'

By James Rogers

The high-interest rate environment has impacted consumer confidence, according to Harley-Davidson CEO Jochen Zeitz

Harley-Davidson Inc.'s stock was down 3.1% in premarket trading Wednesday after the iconic motorbike maker reported a worse-than-expected fourth-quarter loss. The company's chief executive Jochen Zeitz said that the high-interest rate environment has impacted consumer confidence.

The Milwaukee-based company had a net loss of $117 million, or a loss of 93 cents a share, after net income of $26 million, or 18 cents a share, in the prior year's quarter. Analysts surveyed by FactSet were looking for a loss of 66 cents a share.

Revenue fell 35% year-over-year to $688 million, but was above the FactSet estimate of $462 million. The company said that the revenue decline was driven by a 47% revenue decline at Harley-Davidson Motor Company, although this was partially offset by 4% revenue growth at Harley-Davidson Financial Services.

Related: Harley-Davidson's stock falls as motorbike maker lowers guidance to reflect still-pressured consumer

At Harley-Davidson Motor Company, global motorcycle shipments fell 53% to 14,010 during the quarter, which the company said was due to "dealer channel de-stocking" and market conditions.

"In 2024, we saw our performance being significantly impacted by the continued cyclical headwinds for discretionary products, including the high-interest rate environment affecting consumer confidence," said Harley-Davidson $(HOG)$ CEO Jochen Zeitz, in a statement.

For 2025, the company expects earnings to be flat to down 5%. Analysts surveyed by FactSet were looking for earnings to rise 6.3%. The company expects Harley-Davidson Motor Company revenue to be flat to down 5% and operating income margin of 7.0% to 8.0%.

Related: Harley-Davidson dealers say the company is sending them too many motorcycles

CFRA raised its rating for Harley-Davidson to sell Wednesday. "While this was an ugly release, we raise our rating one notch to Sell, as we believe Street expectations will now be reset to more realistic levels and note that HOG still generates material free cash flow," wrote CFRA analyst Garrett Nelson, in a note.

Harley Davidson generated $1.07 billion net cash from operating activities in 2024, up from $754.9 million in the prior year.

Harley-Davidson shares are down 22.4% in the last 12 months, compared with the S&P 500 index's SPX gain of 21.9%.

-James Rogers

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February 05, 2025 08:33 ET (13:33 GMT)

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