8-K: Harley-Davidson Reports Softer Than Expected Q1 2025 Results, Withdraws Full Year Outlook

Harley-Davidson's Q1 2025 results show a decline in revenue and sales, leading to the withdrawal of their full-year financial outlook due to economic uncertainty.

Summary

• Harley-Davidson reported its first quarter 2025 financial results on May 1, 2025.
• The company's Q1 results were ahead of expectations in some areas, but U.S. retail sales were softer than anticipated.
• Global motorcycle retail sales decreased by 21% year-over-year due to a volatile macroeconomic environment and consumer uncertainty.
• HDMC revenue was down 27% year-over-year, primarily due to a planned decrease in motorcycle shipments.
• Diluted EPS was reported at $1.07.
• HDMC operating income margin was 10.8 percent.
• HDFS operating income margin was 26.1 percent.
• Consolidated revenue decreased by 23% to $1,329 million.
• Consolidated operating income decreased by 39% to $160 million.
• Net income attributable to HDI was $133 million, a 43% decrease.
• Motorcycle shipments decreased by 33% to 38.6 thousand units.
• LiveWire's operating loss improved by $9 million, a 32% decrease in losses.
• The company repurchased $87 million of shares (3.4 million shares).
• Due to the uncertain global tariff situation and macroeconomic conditions, the company is withdrawing its full year 2025 financial outlook.

Sentiment

Score: 4

Explanation: The sentiment is moderately negative due to the decline in sales, revenue, and the withdrawal of the full-year outlook. While there are some positive aspects like the improvement in LiveWire's operating loss and share repurchases, the overall tone is cautious and reflects significant challenges.

Positives

• HDFS operating income increased by 19% due to a lower provision for credit losses and lower operating expenses.
• LiveWire's operating loss improved by $9 million, a 32% decrease in losses.
• The company repurchased $87 million of shares (3.4 million shares).
• Cash and cash equivalents of $1.9 billion at the end of the quarter.

Negatives

• Global motorcycle retail sales decreased by 21% year-over-year.
• HDMC revenue decreased by 27% year-over-year.
• Consolidated revenue decreased by 23% to $1,329 million.
• Consolidated operating income decreased by 39% to $160 million.
• Net income attributable to HDI decreased by 43% to $133 million.
• Motorcycle shipments decreased by 33% to 38.6 thousand units.
• LiveWire revenue decreased by 42% due to lower electric motorcycle unit sales and lower STACYC electric bike sales.
• The company withdrew its full year 2025 financial outlook.

Risks

• Uncertain global tariff situation and macroeconomic conditions.
• Volatile macroeconomic environment and overall consumer uncertainty.
• High interest rate environment and an uncertain economic outlook leading to unfavorable consumer confidence.
• Weak demand in North America, EMEA, APAC, and Latin America.
• Potential impacts from supply chain and logistics issues, tariffs, changing market conditions, and geopolitical environments.
• Risks associated with LiveWire operating as a separate public company.
• Potential for product liability claims and regulatory non-compliance issues.

Future Outlook

Due to the uncertain global tariff situation and macroeconomic conditions, Harley-Davidson withdrew its full year 2025 financial outlook from February 5, 2025.

Management Comments

• Jochen Zeitz, Chairman, President and CEO, stated that the company remains focused on navigating the challenging economic and tariff environment through cost productivity measures, supply chain mitigation, tight operating expense control, and reducing dealer inventory.
• He also mentioned a commitment to driving retail sales through increased marketing initiatives as the riding season begins.

Industry Context

The announcement reflects challenges in the motorcycle industry due to macroeconomic factors, similar to other discretionary consumer goods companies. The decline in retail sales and revenue aligns with broader trends of consumer uncertainty and economic volatility. The company's focus on cost management and supply chain mitigation is a common response in the current environment.

Comparison to Industry Standards

• Compared to Polaris (PII), which also faces similar macroeconomic headwinds in the recreational vehicle market, Harley-Davidson's performance reflects industry-wide challenges.
• Companies like Yamaha and Honda, which have a more diversified product portfolio, might show more resilience in specific segments, but are still likely to be affected by the same global economic factors.
• Harley-Davidson's focus on electric vehicles through LiveWire mirrors the broader industry trend towards electrification, similar to initiatives by other major motorcycle manufacturers.
• However, LiveWire's sales decline indicates challenges in the adoption of electric motorcycles, which is a common issue across the EV sector.

Stakeholder Impact

• Shareholders will be impacted by the decline in financial performance and the withdrawal of the full-year outlook.
• Employees may face uncertainty due to cost-cutting measures and potential restructuring.
• Dealers may experience challenges due to lower retail sales and the need to manage inventory effectively.
• Customers may be affected by pricing changes and product availability due to tariffs and supply chain issues.

Next Steps

• The company will continue to focus on cost productivity measures, supply chain mitigation, and operating expense control.
• Harley-Davidson plans to increase marketing initiatives to drive retail sales during the riding season.
• The company will monitor the global tariff situation and macroeconomic conditions.

Key Dates

Keywords

Harley-Davidson, Financial Results, Q1 2025, Motorcycle Sales, Revenue, Operating Income, Net Income, EPS, Shipments, LiveWire, HDFS, Outlook, Tariffs, Macroeconomic Conditions