#USA #Harley-Davidson #Milwaukee #HDFS #Artie Starrs

Harley-Davidson's Third Quarter Financial Performance

On November 4, 2025, Harley-Davidson, Inc. (NYSE: HOG) revealed its financial outcomes for the third quarter of 2025. The results indicate a significant transformation in the company's strategy, reflecting improved financial health amidst challenging market conditions.

Overview of Results

Artie Starrs, President and CEO, stated, "Our Q3 results demonstrate the positive impact of the HDFS transaction and reinforce the strategic value HDFS brings to Harley-Davidson's overall business model." Despite facing difficulties in retail sales, Starrs expressed optimism about the company's trajectory, emphasizing the crucial role of dealers in fostering growth.

The financial results for Q3 include:

• - Diluted EPS of $3.10
• - HDFS operating income reaching $439 million
• - Global motorcycle retail sales decreased by 6% compared to the previous year
• - HDMC revenue surged by 23% year-over-year
• - Global motorcycle shipments increased by 33% year-over-year

This quarter's successes were underpinned by the completion of a transformative financing deal with KKR and PIMCO. Jonathan Root, CFO, noted that the successful transaction would unlock approximately $1.2 billion in discretionary cash. This pivotal deal involved the sale of existing loans and interests, thereby allowing Harley-Davidson to convert their financial services into a model that significantly reduces risk and capital requirements.

Key Financial Highlights

The figures illustrate a notable recovery and strategic advantage gained from the HDFS transaction:

• - Revenue: $1,341 million, a 17% increase from Q3 2024.
• - Operating Income: Rose dramatically to $475 million from $106 million a year ago, reflecting a 349% increase.
• - Net Income: Reached $377 million, up 217% compared to $119 million in the prior year.

The HDFS deal was a multi-faceted transaction that involved:
1. Back Book Sale: Selling around $6 billion of existing HDFS loan receivables.
2. Forward Flow Agreement: Establishing arrangements for future HDFS loan originations.
3. Equity Interest Sale: Selling a 9.8% interest in HDFS to KKR and PIMCO.

Retail Motorcycle Sales Analysis

Despite the overall revenue growth, Harley-Davidson experienced a decline in retail motorcycle sales, with a reported 34,000 motorcycles sold globally in Q3, reflecting a 6% decrease from the previous year. Notably, North American sales fell by 5%, while EMEA markets dropped by 17%. However, Latin America reported a modest growth of 16%, providing some balance to the overall numbers.

The company acknowledged the impacts of economic conditions on consumer confidence, high interest rates, and inflation, contributing to the challenges in retail performance. Yet, an increase in wholesale shipments highlighted a promising pipeline for future revenue.

Strategic Partnerships and Future Directions

Looking ahead, Harley-Davidson's strategy is set to undergo further refinements to boost sustainable growth. This involves enhancing dealership profitability and fostering connections with consumers. The focus will be on locally relevant marketing strategies to strengthen community ties and improve brand loyalty among riders.

Starrs concluded optimistically, stating, "While we have significant work to accomplish, the foundation laid by these strategic partnerships will help us move towards a thriving future for all our dealers and customers."

The company is looking forward to an accelerated share repurchase plan targeting $1 billion by 2026, which signals confidence in its growth trajectory.

In summary, Harley-Davidson is navigating through market challenges with a renewed strategic focus, supporting dealers, and enhancing relationships within the riding community, potentially positioning itself well for future successes.