LVWR — LiveWire Group, Inc.

Summary of Harley Davidson Q4 2025 Earnings Call

1. Key Financial Results and Metrics

• Q4 2025 Revenue: $1.1 billion, down 28% year-over-year.
• Q4 Operating Income: Loss of $361 million, compared to a loss of $193 million in Q4 2024.
• Earnings Per Share: Loss of $2.44, compared to a loss of $0.93 in the prior year.
• Full Year 2025 Revenue: $4.5 billion, down 14% from 2024.
• Full Year Operating Income: $387 million, down from $417 million in 2024.
• HDFS Operating Income: Loss of $82 million in Q4; full-year operating income of $490 million, up from $248 million in 2024.

2. Strategic Updates and Business Highlights

• CEO Transition: Arty Scars emphasized a focus on restoring dealer relationships, improving inventory management, and enhancing customer engagement.
• Inventory Management: Dealer inventory decreased by 17% globally, exceeding the target of 10%. North American dealer inventory was down 16%.
• Promotional Strategies: Targeted promotions were implemented to address high dealer inventory, particularly for touring models.
• E-commerce Strategy: A shift to enhance dealership traffic and reduce discounting pressures.
• LiveWire Segment: Continued investment in electric motorcycles with a focus on the upcoming launch of the Honcho model.

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: For HTMC, expected to range from a positive $10 million to a loss of $40 million. HDFS projected operating income of $45 million to $60 million.
• Cost Pressures: Forecasted incremental tariffs between $75 million to $105 million in 2026.
• Long-term Goals: Aiming for a return to sustainable growth and profitability, with a strategic plan to be announced in May 2026.

4. Bad News, Challenges, or Points of Concern

• Declining Sales: Global retail sales of new motorcycles down 12% year-over-year, with significant declines in international markets, particularly EMEA.
• Operating Losses: Continued operating losses in both HDMC and HDFS, with pressures from tariffs and inventory management.
• Market Conditions: Ongoing macroeconomic challenges affecting discretionary spending and pricing pressures.
• Dealer Health: Uneven dealer performance, with some facing significant challenges that could impact long-term growth.

5. Notable Q&A Insights

• HDFS Profitability: Questions regarding HDFS's lower-than-expected operating income highlighted concerns about volume and inventory levels impacting earnings.
• Wholesale Shipment Cadence: Guidance indicated a cautious approach to wholesale shipments, with expectations for a back-loaded increase in the latter half of 2026.
• Retail Sales Expectations: Optimism around new model launches and inventory management strategies was tempered by the need for careful monitoring of retail performance.
• Used vs. New Pricing: Discussion on the pricing spread between used and new motorcycles indicated efforts to stabilize used values while managing promotional activities to drive sales.

Overall, Harley Davidson is navigating a challenging environment with a focus on stabilizing operations, improving dealer relationships, and preparing for a strategic reset in 2026.