Harley-Davidson (HOG) smashed Wall Street’s expectations for the third quarter, but the market didn’t seem impressed. The stock slipped nearly 1% in premarket trading on Tuesday after the motorcycle maker posted stellar financial results that masked some deeper concerns about falling sales and weaker momentum in its core business.
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Harley-Davidson Beats Expectations but Stock Falls
Harley reported third-quarter earnings per share of $3.10 on $1.3 billion in sales, far ahead of analyst estimates for $1.53 a share and $1 billion in revenue. A year ago, the company earned just 91 cents per share on $1.2 billion in sales.
On paper, it was one of Harley’s strongest quarters in years. But shares still fell 0.6% to $26.96 in premarket trading, while futures on the S&P 500 and Dow Jones Industrial Average were both in the red.
“Our Q3 results demonstrate the positive impact of the Harley-Davidson Financial Services transaction and reinforce the strategic value HDFS brings to Harley-Davidson’s overall business model,” said CEO Artie Starrs in a statement.
Harley-Davidson Financial Services Drives the Beat
The biggest driver behind Harley’s earnings surge wasn’t motorcycle sales, it was its financing arm, Harley-Davidson Financial Services (HDFS). The unit, which offers loans, insurance, and financial products for Harley buyers, delivered a massive $439 million in operating profit, up from just $77 million a year earlier.
This improvement came after Harley struck a deal in July between HDFS and investment giants KKR (KKR) and PIMCO, giving the unit a boost that’s now showing up in the results. The financial services business helped offset softness in Harley’s core motorcycle operations, which remain under pressure.
Core Motorcycle Sales Still Struggling
Underneath the headline beat, Harley’s motorcycle business continues to face challenges. Operating income in the segment was $54 million, slightly lower than a year ago, and retail motorcycle sales fell 6% year over year.
“While retail sales remain challenged, I’m truly energized by what I’ve experienced across the company, in dealerships, and with the broader rider community,” said Starrs, who took over as CEO in October. “While there is a lot of work ahead of us, our success begins with our dealers — when they thrive, Harley-Davidson thrives.”
This optimism comes after years of sluggish performance. Harley stock is down roughly 20% over the past five years, mirroring a steady decline in sales. The company brought in $4.9 billion in 2022, but analysts expect 2025 revenue to land around $3.7 billion.
Harley-Davidson Struggles to Reignite Its Core Business
Investors may be wary that Harley’s earnings growth is coming from financing rather than motorcycles. This is a sign the company’s brand strength alone may no longer be enough to drive long-term gains.
For new CEO Artie Starrs, the challenge is to reignite Harley’s core business while leveraging its strong financial arm to restore investor confidence. That’s easier said than done, but if Harley can stabilize bike sales and keep profits rolling, the company might finally find the open road again.
Is Harley-Davidson Stock a Good Buy?
According to data from 4 Wall Street analysts over the past three months, Harley-Davidson stock (HOG) carries a Strong Buy consensus rating. Out of the four analysts, three rate the stock a Buy and one rates it a Hold, with no Sell ratings issued.
The average 12-month HOG price target stands at $32.67, implying a potential upside of 20.5% from the current price.
