HOG — Harley-Davidson, Inc.

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

1. Key Financial Results and Metrics

• Q4 2025 Revenue: Consolidated revenue decreased by 28% to $379 million for HDMC and down 59% for HDFS.
• Operating Income: Consolidated operating loss of $361 million, compared to a loss of $193 million in Q4 2024. HDMC reported an operating loss of $260 million.
• Earnings Per Share: Loss of $2.44, compared to a loss of $0.93 in Q4 2024.
• Full Year 2025 Revenue: $4.5 billion, down 14% year-over-year.
• Full Year Operating Income: $387 million, down from $417 million in 2024.
• Dealer Inventory: Reduced by 17% globally, exceeding the target of 10%.

2. Strategic Updates and Business Highlights

• CEO Focus: Arthur Starrs emphasized the need to stabilize the business and restore dealer confidence, with immediate priorities including improving dealer profitability and optimizing inventory.
• Dealer Engagement: Ongoing discussions with dealers to enhance relationships and address inventory challenges.
• Inventory Management: Targeted promotions and disciplined planning to align inventory with retail demand, particularly for touring models.
• E-commerce Strategy: Reevaluation to drive traffic to dealerships and reduce excessive discounting.
• HDFS Transaction: Transitioning to a capital-light model, with significant debt reduction and a focus on servicing fees.

3. Forward Guidance and Outlook

• 2026 Expectations: Anticipated retail and wholesale units of 130,000 to 135,000, with a focus on balancing inventory.
• Operating Income Guidance: HDMC expected to range from a profit of $10 million to a loss of $40 million; HDFS expected operating income of $45 million to $60 million.
• Tariff Costs: Projected increase in tariffs for 2026, estimated between $75 million to $105 million.
• Long-term Vision: Plans to announce a new strategic plan in May 2026, aiming for sustainable growth and improved margins.

4. Bad News, Challenges, or Points of Concern

• Declining Metrics: Significant losses in both Q4 and full year results, with operating losses in both HDMC and HDFS.
• Retail Sales Volatility: North American retail sales up 5% in Q4, but down 13% for the full year; international sales, particularly in EMEA, faced significant declines.
• Inventory Challenges: Despite reductions, there remains a pronounced overhang in touring inventory, necessitating ongoing promotional efforts.
• Market Pressures: Inflation and high interest rates affecting consumer purchasing power and overall retail performance.

5. Notable Q&A Insights

• HDFS Profitability: Concerns raised about HDFS operating income expectations being lower than initially anticipated; management indicated a cautious outlook on volume and profitability.
• Wholesale Shipment Dynamics: Guidance indicated a careful approach to wholesale shipments in 2026, with expectations for a back-loaded shipment schedule.
• Retail Sales Expectations: Management expressed optimism about new model launches and their potential to drive retail sales, particularly in the touring segment.
• Used vs. New Pricing: Discussions highlighted stabilization in used motorcycle values, with promotional activities aimed at narrowing the pricing gap between new and used motorcycles.

This summary encapsulates the key points from the earnings call, providing a clear overview of Harley-Davidson's financial performance, strategic initiatives, and outlook amidst ongoing challenges.