HOG — Harley-Davidson, Inc.

Summary of Harley-Davidson, Inc. Q4 2025 Earnings Call

1. Key Financial Results and Metrics

• Q4 2025 Revenue: $379 million, down 10% year-over-year; full-year revenue of $4.5 billion, down 14%.
• Operating Income: Q4 operating loss of $361 million compared to a loss of $193 million in Q4 2024; full-year operating income of $387 million, down from $417 million in 2024.
• Earnings Per Share (EPS): Q4 loss of $2.44 versus a loss of $0.93 in Q4 2024; full-year EPS of $2.78 compared to $3.44 in 2024.
• Dealer Inventory: Down 17% globally year-over-year, exceeding the target of a 10% reduction.

2. Strategic Updates and Business Highlights

• CEO Transition: Arthur Starrs emphasized a focus on stabilizing the business and restoring dealer confidence.
• Inventory Management: Intentional reduction of wholesale shipments to manage elevated dealer inventory, particularly for touring models.
• Dealer Engagement: Ongoing roundtable discussions with dealers to improve relationships and align objectives.
• E-commerce Strategy: Reevaluation to drive traffic to dealerships and reduce excessive discounting.
• Cost Management: Aiming for $150 million in annual run rate savings starting in 2027, with a rigorous review of operating expenses.

3. Forward Guidance and Outlook

• 2026 Expectations: Projecting retail and wholesale motorcycle units of 130,000 to 135,000, with a focus on balancing inventory.
• Operating Income Forecast: HDMC expected to have an operating income between a positive $10 million and a loss of $40 million; HDFS projected operating income of $45 million to $60 million.
• Tariff Costs: Anticipating $75 million to $105 million in new or increased tariffs for 2026.
• LiveWire: Expected operating loss in the range of $70 million to $80 million as the company continues to invest in its electric motorcycle segment.

4. Bad News, Challenges, or Points of Concern

• Declining Metrics: Significant declines in both revenue and operating income, with a notable increase in operating losses.
• Retail Sales Volatility: Global retail sales of new motorcycles down 12% for the full year, with North American retail sales down 13%.
• Economic Headwinds: Ongoing inflationary pressures and high interest rates affecting consumer purchasing behavior.
• HDFS Performance: Operating loss of $82 million in Q4 due to costs associated with liability management activities and lower finance receivables.

5. Notable Q&A Insights

• HDFS Profitability: Analysts questioned the long-term profitability of HDFS, with management indicating a cautious outlook and the need for time to rebuild retail assets.
• Wholesale Guidance: Management indicated a careful approach to wholesale shipments, with expectations of a back-loaded shipment cadence in 2026.
• Retail Sales Expectations: There is optimism for a slight increase in U.S. retail sales in 2026 due to new model launches and improved dealer positioning.
• Used vs. New Pricing: Management discussed efforts to reduce the gap between new and used motorcycle prices, with stabilization in used values noted as a positive trend.

This summary encapsulates the key financial metrics, strategic initiatives, forward guidance, challenges, and insights from the Q&A session, providing a comprehensive overview of Harley-Davidson's current position and outlook.