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Harley-Davidson Reports First Quarter Financial Results for 2025

On May 1, 2025, Harley-Davidson, Inc. (NYSE: HOG) announced its financial performance for the first quarter of 2025, revealing a mixed bag of results shaped by challenging economic conditions. Jochen Zeitz, the Chairman, President and CEO of Harley-Davidson, stated, "Our first quarter results were better than expected in several areas, although retail sales in the U.S. were softer than we had hoped. We are focused on navigating the tough economic and tariff landscape with careful execution of our operational strategies."

Financial Highlights

During the first quarter of 2025, Harley-Davidson reported a diluted earnings per share (EPS) of $1.07. The results displayed an operating income margin for the Harley-Davidson Motor Company (HDMC) at 10.8% and a notable 26.1% for Harley-Davidson Financial Services (HDFS). However, global motorcycle retail sales experienced a significant decline of 21% year-over-year, predominantly influenced by a volatile macroeconomic environment and declining consumer confidence.

• - Revenue Performance: The company's consolidated revenue for Q1 2025 decreased by 23% to $1.329 billion from $1.730 billion in Q1 2024. Operating income also fell by 39%, dropping to $160 million from $263 million year-over-year.
• - Motorcycle Shipments: The HDMC saw a 33% drop in motorcycle shipments, down from 57.7 thousand units to just 38.6 thousand. This decline was accompanied by a sharp revenue drop of 27%, primarily attributed to a planned decrease in shipments and unfavorable foreign currency effects.
• - Retail Sales Decline: The retail sales figures showcased a decline across several regions, most notably a 24% reduction in North America and 28% in the Asia Pacific region, highlighting the downward trend in demand, particularly in markets like China and Japan.
• - Share Buyback: On a discretionary basis, Harley-Davidson repurchased $87 million worth of shares during the first quarter, reflecting the company's commitment to enhancing shareholder value amidst fluctuating revenues.

Insights on Harley-Davidson Financial Services

The HDFS segment reported a revenue of $245 million, showing a minor year-over-year reduction of 2%. However, operating income in this segment surged by 19%, demonstrating effective management of credit provisioning and operating expenses amidst a declining loan portfolio. Financing receivables recorded a decrease of 6% compared to the previous year, settling at $7.4 billion.

LiveWire Performance

LiveWire, Harley-Davidson's electric motorcycle brand, faced challenges as well, with a stark 72% drop in unit sales to just 33 units in the first quarter. The revenue from LiveWire also fell by 42%, emphasizing the struggle to establish a foothold in the growing electric vehicle market, despite a significant reduction in operational losses, which improved by 32% compared to the previous year.

Economic and Market Considerations

The CEO mentioned the need to increase marketing initiatives as the riding season approaches, aiming to stimulate retail sales despite the external economic pressures, including higher interest rates and inflation, which adversely impact consumer purchasing power.

Looking ahead, Harley-Davidson has decided to withdraw its full-year financial outlook for 2025 due to the ongoing uncertainty surrounding global tariffs and economic conditions, indicating caution in their strategic planning.

Conclusion

In summary, while Harley-Davidson continues to adapt its strategies in response to market challenges, the figures from Q1 2025 underscore a broader trend of reduced consumer confidence and demand. The company remains determined to strengthen its position by navigating these tumultuous conditions and leveraging its financial services to support riders on the road. The upcoming riding season may serve as a pivotal moment for the brand to revitalize its sales efforts and reconnect with motorcycle enthusiasts globally.