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Harley-Davidson's Financial Report for 2024 and 2025 Forecast

On February 5, 2025, Harley-Davidson, Inc. (NYSE: HOG) released its financial results for the fourth quarter and the full year of 2024, along with a strategic outlook for 2025. The company CEO, Jochen Zeitz, addressed the challenging economic landscape that has been impacting the motorcycle industry, particularly in light of rising interest rates and fluctuating consumer confidence.

Overview of 2024 Financial Performance

The highlights of Harley-Davidson's financial performance for 2024 reflect substantial challenges:

• - Full Year Revenue: Total revenue reached $5.187 billion, a decline of 11% compared to 2023.
• - Earnings Per Share (EPS): The diluted EPS was reported at $3.44.
• - Motorcycle Shipments: The company shipped 148,862 motorcycles globally, a 17% decrease from the previous year, largely attributed to the focus on dealer inventory management.
• - Operating Income: The operating income was noted at $417 million, down a staggering 47% from 2023.

The fourth quarter results painted an even more concerning picture:

• - Revenue for Q4: The company reported revenue of $688 million, reflecting a 35% drop year-over-year.
• - Q4 EPS: A loss of $0.93 per diluted share was noted, compared to a profit of $0.18 per share in the fourth quarter of the prior year.
• - Global Motorcycle Shipments: The Harley-Davidson Motor Company (HDMC) witnessed a drastic decline in shipments, down to 14,010 units from 29,544 units during the same quarter in 2023.

Market Dynamics and Strategic Initiatives

In addressing the downturn, CEO Jochen Zeitz emphasized that the company’s new launches, specifically the Street Glide and Road Glide touring motorcycles, fueled a notable 5% growth in the U.S. Touring segment. Furthermore, these models have helped Harley-Davidson increase its market share to 74.5% within this segment.

Zeitz attributed the major financial challenges to cyclical headwinds in the discretionary spending market, as well as adverse macroeconomic conditions affecting consumer confidence. The company has initiated its Hardwire strategy, focusing on operational efficiency and market adaptability to mitigate these challenges.

Outlook for 2025

Looking ahead, Harley-Davidson expects a mixed outlook for 2025:

• - Revenue Expectations: The company forecasts flat to a 5% decrease in HDMC revenue, anticipating an operating income margin between 7.0% to 8.0%.
• - LiveWire Performance: The all-electric motorcycle segment, LiveWire, is projected to see unit sales of 1,000 to 1,500, with expected operating losses in the range of $70 million to $80 million.
• - Investment Strategy: Harley-Davidson has outlined capital investments of approximately $225 to $250 million to support future growth initiatives.

Despite the challenges, Zietz expressed confidence in the company’s positioning to leverage a market recovery and successfully navigate the economic landscape ahead. His vision retains a focus on the brand's legacy of adventure and freedom, which remains central to Harley-Davidson's marketing ethos.

Conclusion

As Harley-Davidson gears up for 2025, the motorcycle giant faces a critical juncture. The strategic initiatives outlined by Zeitz aim not only to navigate the current challenging environment but also to set the stage for potential growth and restoration of profitability. With continued focus on innovation, market share retention, and financial prudence, Harley-Davidson endeavors to maintain its status as a leading motorcycle brand globally. Investors and enthusiasts alike will be keeping a close eye on the company's performance as the new year unfolds.