8-K: Harley-Davidson Reports Weak Q4, Full Year 2024 Results, Provides Cautious 2025 Outlook

Harley-Davidson's Q4 results were significantly impacted by cyclical headwinds, leading to a substantial revenue decline, while the full year saw a decrease in revenue and operating income, with a cautious outlook for 2025.

Summary

• Harley-Davidson reported a diluted EPS of $3.44 for 2024.
• HDMC operating income was $278 million with a 6.7% margin.
• Global motorcycle shipments decreased by 17% to 148,862 units.
• North American retail sales of Touring, Trike, and CVO models increased by over 8%.
• Dealer inventory decreased by over 4% year-over-year.
• HDFS operating income increased by 6% to $248 million.
• Q4 saw a diluted EPS loss of -$0.93.
• HDMC revenue decreased by 47% to $420 million.
• Global motorcycle shipments in Q4 decreased by 53% to 14,010 units.
• Global retail sales of new motorcycles decreased by 15% in Q4.
• For 2025, HDMC expects revenue to be flat to down 5% with an operating income margin of 7.0% to 8.0%.
• HDFS expects operating income to decrease by 10% to 15% in 2025.
• LiveWire anticipates selling 1,000 to 1,500 units with an operating loss of $70 to $80 million in 2025.
• Harley-Davidson expects diluted earnings per share to be flat to down 5% in 2025.
• Capital investments are projected to be $225 to $250 million in 2025.

Sentiment

Score: 4

Explanation: The sentiment is slightly negative due to the reported revenue decline, operating losses, and cautious outlook for 2025. However, there are some positive aspects, such as growth in the Touring segment and share repurchases, which prevent a more negative assessment.

Positives

• The launch of new Street Glide and Road Glide touring motorcycles contributed to nearly 5% growth in the U.S. Touring segment.
• Harley-Davidson dealer inventory levels of new motorcycles finished the year down over 4% year-over-year.
• HDFS operating income of $248 million, up 6% from prior year.
• North American retail sales of Touring, Trike, and CVO models were up more than 8% for the full year of 2024.
• The company repurchased $450 million of shares (12.5 million shares) on a discretionary basis.

Negatives

• HDMC global motorcycle shipments of 148,862, down 17% from prior year.
• Delivered diluted EPS loss of -$0.93 for Q4.
• HDMC revenue of $420 million, down 47% vs. prior year.
• Global retail sales of new motorcycles down 15% vs. prior year.
• LiveWire: electric motorcycle unit sales of 1,000 1,500 and an operating loss of $70 to $80 million.
• Consolidated revenue was down 35 percent, driven by a revenue decline of 47 percent at HDMC.
• Consolidated operating loss was $193 million which compares to an operating loss of $21 million in the prior years period.
• HDMC revenue was down 15 percent, due to lower volumes and unfavorable net pricing, partially offset by positive impacts of shipment mix.
• LiveWire revenue decreased by 31 percent compared to the prior year, driven by lower unit sales of EV motorcycles and of STACYC electric bikes.

Risks

• The company faces risks related to supply chain and logistics issues, including quality issues and interruptions.
• Tariffs and trade measures could impact the company's ability to sell products and increase costs.
• Changing market conditions, interest rates, and geopolitical environments pose risks.
• The company's ability to develop and introduce successful products and services on a timely basis is crucial.
• The company faces competition from existing and new competitors.
• The company's operations could be adversely impacted by various factors, including tariff impacts, inflation, work stoppages, and natural causes.
• LiveWire operating as a separate public company has risks including the ability of LiveWire to execute its plans to develop, produce, market and sell its electric vehicles and the demand for and consumer willingness to adopt twoand three-wheeled electric vehicles.

Future Outlook

For the full year 2025, HDMC expects revenue to be flat to down 5% and operating income margin of 7.0% to 8.0%. HDFS expects operating income to be down 10% to 15%. LiveWire expects unit sales of 1,000 to 1,500 and an operating loss of $70 to $80 million. Harley-Davidson, Inc. expects diluted earnings per share to be flat to down 5% and capital investments of $225 to $250 million.

Management Comments

• In 2024, we saw our performance being significantly impacted by the continued cyclical headwinds for discretionary products, including the high-interest rate environment affecting consumer confidence, said Jochen Zeitz, Chairman, President and CEO, Harley-Davidson.
• The launch of our new Street Glide and Road Glide touring motorcycles contributed to nearly 5% growth in the U.S. Touring segment and drove H-Ds market share to 74.5% in 24.
• The decisions we have made and the bold actions we have taken as part of our Hardwire strategy are continuing to strengthen our foundation for the future.
• The industry has faced many challenges over the past couple of years, impacting at all levels, but we believe we are best positioned to take advantage of any uptick in consumption.

Industry Context

The report indicates that the motorcycle industry is facing cyclical headwinds and challenges related to consumer confidence and interest rates. Harley-Davidson is positioning itself to capitalize on any potential recovery in consumption.

Comparison to Industry Standards

• The document does not provide specific comparisons to industry standards or competitors.
• Without further information, it's difficult to assess Harley-Davidson's performance relative to global benchmarks or comparable companies.

Stakeholder Impact

• Shareholders may be concerned about the decline in revenue and operating income.
• Employees may face uncertainty due to potential cost-cutting measures.
• Dealers may experience challenges due to lower motorcycle shipments.
• Customers may be affected by changes in product offerings and pricing.

Next Steps

• Harley-Davidson will discuss its financial results and outlook on an audio webcast at 8:00 a.m. CST today.

Key Dates

Keywords

Harley-Davidson, financial results, motorcycles, shipments, revenue, earnings, outlook, HOG, LiveWire, HDFS