Key Highlights
- Second quarter profit declined to $80M ($0.75 per share) compared to $108M ($0.88 per share) year-over-year
- Quarterly revenue decreased 6% to $1.23B; gross profit margin compressed from 28.6% to 27.5%
- Company delivered 39,200 motorcycles, reflecting 9.4% growth YoY but missing analyst projections of 40,810 units
- Management upgraded annual retail sales guidance to 133,500ā138,500 motorcycles from prior 130,000ā135,000 range
- HDMC operating income projection elevated to $10Mā$50M, significantly above previous -$40M to $10M estimate
Shares of Harley-Davidson (HOG) declined approximately 1% during Thursday’s premarket session following the motorcycle manufacturer’s disappointing second quarter financial report, despite exceeding certain Wall Street projections.
The company reported second quarter net profit of $80 million, translating to $0.75 per diluted share, representing a decline from $108 million, or $0.88 per share, recorded in the corresponding period of the previous year. Quarterly revenue contracted 6% on a year-over-year basis to $1.23 billion.
The per-share earnings figure surpassed consensus analyst forecasts by $0.11, providing some relief amid the broader financial deterioration.
Gross profit margin contracted to 27.5% from 28.6% in the prior-year quarter, pressured by elevated raw material expenses, adverse product mix dynamics, and negative foreign currency impacts.
Harley-Davidson delivered 39,200 motorcycles throughout the quarter ā marking a 9.4% increase year-over-year, though falling short of Street consensus calling for 40,810 units shipped.
Global retail sales advanced 1% overall. The North American market contributed 3% growth while Latin America posted 4% gains, offset by a 9% decline in EMEA and flat performance across Asia Pacific.
Operating profit dropped 32%, primarily attributed to challenges within the financial services arm, HDFS, which continues transitioning toward a capital-light business structure.
Strategic Shift Under “Back to the Bricks”
Under CEO Artie Starrs’ leadership, the iconic motorcycle brand has been repositioning away from premium touring motorcycles toward lighter, more accessible models. Entry-level pricing now begins around $10,000.
The strategic “Back to the Bricks” initiative focuses on reviving classic Harley designs while appealing to younger demographics through smaller-displacement engine options ā representing a significant departure from the company’s traditional core customer segment.
Electric Unit Shows Incremental Progress
LiveWire, the company’s electric motorcycle division, reduced its operating loss to $18 million from $19 million in the year-ago quarter ā demonstrating modest yet consistent progress.
Full-year LiveWire projections anticipate an operating loss between $70Mā$80M, supported by capital expenditures ranging from $175Mā$200M.
Notwithstanding the quarterly shortfall, Harley-Davidson elevated its full-year retail sales projection to 133,500ā138,500 motorcycles, up from the previous 130,000ā135,000 unit range.
HDMC operating income guidance received a substantial upgrade to $10Mā$50M, marking a dramatic improvement from the prior outlook spanning -$40M to $10M.
Additionally, HDFS operating income expectations were increased to $55Mā$65M compared with the previous $45Mā$60M range.
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