Harley-Davidson ((HOG)) has held its Q3 earnings call. Read on for the main highlights of the call.
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The recent earnings call for Harley-Davidson revealed a mixed sentiment, with a blend of strategic successes and ongoing challenges. While the company highlighted the successful transformation of Harley-Davidson Financial Services, which is expected to unlock significant cash, it also faced hurdles such as disappointing results from the Motor Company and global retail declines. Positive developments were noted in specific segments and regions, but issues like tariff costs and international market challenges continue to pose significant obstacles.
HDFS Transaction Success
Harley-Davidson announced a strategic partnership with KKR and PIMCO to transform Harley-Davidson Financial Services into a capital-light, derisked business model. This transaction is anticipated to unlock between $1.2 billion and $1.25 billion in discretionary cash by the first quarter of 2026, marking a significant financial maneuver for the company.
Global Revenue Growth
The company reported a 17% increase in consolidated revenue for the third quarter, driven largely by a 23% rise in HDMC revenue. Additionally, LiveWire revenue experienced a 16% increase, signaling robust growth in these segments.
Softail Family Growth
The Softail family saw strong growth of 9% in North America, showcasing the strength of Harley-Davidson’s revised product lineup and its appeal to consumers in this region.
Improvement in Latin America
Retail performance in Latin America improved by 16%, with notable growth in Brazil and Mexico, indicating a positive reception in these markets.
Market Share Expansion
In the U.S., Harley-Davidson expanded its market share in the large cruiser category from 61% in the third quarter of 2024 to 68% in the same period of 2025, demonstrating a strong competitive position.
Disappointing Motor Company Results
Despite some positive trends, the Motor Company results were disappointing, with operating income down by 2% compared to the previous year, highlighting areas needing attention.
Global Retail Decline
Global retail sales declined by 6% in the third quarter, with North America down 5% and international markets down 9%. This reflects ongoing challenges such as unfavorable consumer confidence, high interest rates, and inflation concerns.
Tariff Costs Impact
New or increased tariffs resulted in $27 million in costs for the third quarter and are projected to reach between $55 million and $75 million for the full year 2025, impacting the company’s financials.
Challenges in EMEA
Retail in the EMEA region dropped by 17% after a strong first half, with declines in core families like Touring, Trike, and Softail, indicating regional market challenges.
LiveWire Operating Loss
The LiveWire segment reported an $18 million operating loss, though this was an improvement compared to the previous year, suggesting progress in this area.
Forward-Looking Guidance
Looking ahead, Harley-Davidson provided guidance focused on strategic initiatives to improve dealer health and profitability. Key strategies include enhancing motorcycle inventory management, particularly in the touring and CVO segments, and implementing market-responsive promotions to drive dealer traffic. The company is also exploring e-commerce alternatives and has proposed flexibility in dealer facility guidelines. Financially, the transformation of HDFS is expected to unlock significant cash by 2026, reinforcing Harley-Davidson’s commitment to maintaining strong financial health.
In summary, Harley-Davidson’s earnings call reflected a cautious optimism, with strategic initiatives poised to unlock financial potential and drive growth. However, the company must navigate persistent challenges such as tariff costs and global retail declines to sustain its momentum. The focus on enhancing dealer relationships and product diversification remains central to its forward strategy.