Core Insights - Harley-Davidson reported a wider-than-expected adjusted loss of 93 cents per share for Q4 2024, compared to a consensus estimate of a loss of 68 cents, and a profit of 18 cents per share in the same quarter last year [2] - Consolidated revenues fell 35% year-over-year to $688 million, driven by significant declines in motorcycle sales and related products [2][3] Financial Performance - Revenues from the Motorcycle and Related Products segment dropped 47% year-over-year to $420 million, missing forecasts due to lower motorcycle shipments [3] - Worldwide motorcycle shipments decreased by 15% to 25,700 units, falling short of estimates [3] - Revenues from motorcycle sales alone plummeted 60% year-over-year to $231 million, with an operating loss of $214 million, significantly worse than the previous year's loss of $44 million [3] Regional Sales Performance - Retail motorcycle units sold globally decreased by 14.9% year-over-year, with North America sales down 4% to 15,127 units [4] - Sales in EMEA declined by 7%, while Asia Pacific and Latin America saw drops of 26% and 7%, respectively [4] Other Revenue Streams - Parts and accessories revenues fell 10% year-over-year to $118 million, but exceeded estimates [5] - Apparel revenues decreased by 6% to $54 million, also beating projections [5] - Harley-Davidson Financial Services reported revenues of $257 million, up 4% year-over-year, but missed forecasts [5] LiveWire Segment - LiveWire shipments fell 54% to 236 units, with revenues declining 32% to $10 million [6] - Operating loss for LiveWire narrowed to $26 million, better than projections [6] Financial Position - Selling, general, and administrative expenses decreased to $210.5 million from $225.5 million year-over-year [7] - Cash and cash equivalents increased to $1.59 billion, while long-term debt decreased to $4.47 million [7] 2025 Guidance - For 2025, Harley-Davidson expects revenues from HDMC to remain flat to down 5% year-over-year, with an operating income margin of 7-8% [8] - LiveWire segment anticipates wholesale units between 1,000-1,500 and an operating loss of $70-$80 million [9] Market Sentiment - Estimates for Harley-Davidson have trended downward, with a consensus estimate shift of -46.08% [10] - The company currently holds a subpar Growth Score of D and a Momentum Score of F, but an A on the value side, resulting in an aggregate VGM Score of C [11] - Harley-Davidson has a Zacks Rank 5 (Strong Sell), indicating expectations of below-average returns in the coming months [12]

Group 1 - Harley-Davidson, Inc. manufactures and sells motorcycles and related products globally, with 63% of unit sales in the United States in 2024 [1] - The company generates sales across various regions including EMEA, APAC, and Canada [1] Group 2 - The investment philosophy focuses on identifying mispriced securities by understanding the drivers behind a company's financials, often revealed through a DCF model valuation [1]

Group 1: Harley-Davidson - Harley-Davidson is facing significant challenges with a negative return of 23.8% over the last five years, compared to an S&P 500 gain of 85.1% [2] - Revenue declined 35% year over year in Q4 2024 to $688 million, with full-year 2024 revenue down 11% to $5.84 billion [2] - The motorcycle segment saw a 47% decline in revenue year over year in Q4, and total motorcycle shipments fell by 53% [2] - Total net income for 2024 was $445 million, marking a 35% decline year over year, with a loss of $118.43 million in Q4 [3] - Sales have been in relative decline since 2015, with 2015 being the highest-selling year since 2010 [4] - The 2025 outlook is bleak, with expectations for flat or down revenue by as much as 5%, and financing expected to decline by 10% to 15% [5] Group 2: Kraft Heinz - Kraft Heinz has struggled for years to achieve meaningful growth, with a 3% decline in net sales for full-year 2024 and a 2.2% decline in diluted earnings per share [6] - The company anticipates flat sales or a decline of up to 2.5% in 2025, with adjusted operating income expected to decrease by 1% to 4% [7] - Despite a 21% increase in net income in 2023, earnings declined in 2024, indicating challenges in sustaining profit growth from stagnant sales [8] - Over the last five years, Kraft Heinz has underperformed the market by 44%, lacking momentum for stock growth [9]

Core Insights - Harley-Davidson, Inc. will present at the Raymond James 46th Annual Institutional Investors Conference on March 5, 2025, with CFO Jonathan Root and Investor Relations Director Shawn Collins participating in sessions [1] Company Background - Harley-Davidson, Inc. is the parent company of Harley-Davidson Motor Company and Harley-Davidson Financial Services, aiming to lead the motorcycle industry through innovation and emotional connection [2] - The company has been defining motorcycle culture since 1903, offering customizable motorcycles, accessories, riding gear, and apparel [2] - Harley-Davidson Financial Services provides financing and insurance programs to support riders [2] - The company holds a controlling interest in LiveWire Group, Inc., the first publicly traded all-electric motorcycle company in the U.S., focusing on urban adventure and electric motorcycle branding [2]

Financial Performance - Harley-Davidson, Inc. reported total revenue of $5.19 billion for the year ended December 31, 2024, a decrease of 11.1% compared to $5.84 billion in 2023[327]. - The net income attributable to Harley-Davidson, Inc. for 2024 was $455.4 million, down 35.5% from $706.6 million in 2023[327]. - The company's motorcycle and related products revenue was $4.15 billion in 2024, a decline of 15.0% from $4.88 billion in 2023[327]. - Operating income for 2024 was $416.6 million, a significant decrease of 46.5% from $779.1 million in 2023[327]. - Basic earnings per share (EPS) for 2024 was $3.46, down from $4.96 in 2023, reflecting a decline of 30.2%[327]. - Comprehensive income attributable to Harley-Davidson, Inc. for 2024 was $427.6 million, compared to $743.6 million in 2023, indicating a decrease of 42.5%[330]. - The financial services segment generated revenue of $1.04 billion in 2024, an increase of 8.9% from $953.6 million in 2023[327]. - Total revenue for the Company in 2024 was $5,186.8 million, a decrease of 11.1% from $5,836.5 million in 2023[364]. Assets and Liabilities - Total assets decreased from $12,140,554 thousand in 2023 to $11,881,579 thousand in 2024, a decline of approximately 2.1%[333]. - Total liabilities decreased from $8,887,746 thousand in 2023 to $8,726,159 thousand in 2024, a reduction of about 1.8%[333]. - Long-term debt, net decreased from $4,990,586 thousand in 2023 to $4,468,665 thousand in 2024, a decline of approximately 10.4%[333]. - The total equity attributable to Harley-Davidson, Inc. decreased from $3,252,808 thousand in 2023 to $3,166,047 thousand in 2024, a decline of about 2.7%[333]. - The current portion of long-term debt, net increased from $577,203 thousand in 2023 to $683,272 thousand in 2024, representing an increase of about 18.4%[335]. - The company reported a net cash used by investing activities of $383,330 thousand in 2024, compared to $512,304 thousand in 2023, indicating a decrease of approximately 25.2%[338]. Cash Flow and Investments - Net cash provided by operating activities rose significantly from $754,887 thousand in 2023 to $1,063,833 thousand in 2024, an increase of approximately 40.8%[338]. - Cash and cash equivalents increased from $1,533,806 thousand in 2023 to $1,589,608 thousand in 2024, representing a growth of about 3.6%[333]. - The company repurchased common stock worth $459,829 thousand in 2024, compared to $363,987 thousand in 2023, an increase of approximately 26.4%[338]. - The company repurchased 12.5 million shares for $450.0 million in 2024, compared to 10.2 million shares for $350.0 million in 2023[388]. Derivative Financial Instruments - The notional U.S. dollar value of outstanding foreign currency contracts was $455.3 million, down from $540.1 million in 2023, indicating a decrease of approximately 15.7%[294]. - The notional value of derivative financial instruments used to hedge commodity prices was $4.2 million as of December 31, 2024, down from $6.3 million in 2023, reflecting a reduction of 33.3%[295]. - HDFS had an interest rate cap with a notional value of $273.0 million outstanding at December 31, 2024, significantly reduced from $617.9 million in 2023, a decrease of 55.8%[297]. - The notional value of cross-currency swaps was $759.8 million at December 31, 2024, down from $1.42 billion in 2023, indicating a decrease of 46.5%[300]. - The notional value of derivative financial instruments designated as cash flow hedging instruments was $1,215,765 in 2024, with assets valued at $19,837 and liabilities at $34,857[427]. - The company utilizes derivative financial instruments to manage risks related to foreign currency exchange rates, interest rates, and commodity prices[421]. Credit Losses and Receivables - The allowance for credit losses (ACL) for retail finance receivables was $378.4 million as of December 31, 2024, against a retail receivable portfolio totaling $6.7 billion[322]. - The allowance for doubtful accounts was $3.4 million as of December 31, 2024, compared to $2.1 million in 2023, indicating an increase of 61.9%[348]. - Retail finance receivables in the U.S. decreased to $6.5 billion in 2024 from $6.7 billion in 2023, representing a decline of 7.0%[401]. - The allowance for credit losses increased to $401.2 million in 2024 from $381.9 million in 2023, reflecting a rise of 5.9%[408]. - The company experienced increased retail credit losses in 2024 due to macroeconomic factors, including higher motorcycle payments and inflationary pressures[406]. Pension and Benefits - The Company has a defined benefit pension plan with a benefit obligation of $1,568.3 million as of December 31, 2024, up from $1,553.9 million in 2023[479]. - The total accumulated benefit obligation (ABO) for all pension and SERPA plans combined was $1.51 billion in 2024, compared to $1.57 billion in 2023[484]. - The service cost for pension and SERPA benefits was $4.698 million in 2024, down from $5.174 million in 2023[485]. - The interest cost for pension and SERPA benefits decreased to $80.478 million in 2024 from $81.911 million in 2023[485]. - The expected return on plan assets for pension plans was $132.574 million in 2024, compared to $146.076 million in 2023[485]. International Expansion and Market Risks - LiveWire plans to expand its business internationally, which is expected to increase its exposure to currency rate risk as it grows its international presence[296]. - The Company selectively uses derivative financial instruments to manage market risks, including foreign currency exchange rates, commodity prices, and interest rates[293]. - The Company’s HDMC segment operating results are significantly affected by fluctuations in the value of the U.S. dollar relative to foreign currencies, particularly the Euro and Australian dollar[294]. Tax and Regulatory Matters - The income tax provision for 2024 was $71.963 million, a decrease of 58% from $171.830 million in 2023[3]. - The total gross amount of unrecognized tax benefits at the end of 2024 was $16.179 million, down from $18.214 million at the end of 2023[383]. - The company had deferred income tax assets of $342.593 million and deferred income tax liabilities of $183.656 million as of December 31, 2024[379].

Market Overview - Wall Street is experiencing volatility due to persistent inflation, uncertainty regarding the Federal Reserve's rate-cut trajectory, and concerns over a potential trade war [1] - The auto sector faces additional challenges from potential U.S. tariffs on Canadian and Mexican imports, although these duties were temporarily paused [1] Dividend-Paying Stocks - Dividend-paying stocks are seen as a stable investment option for cautious investors seeking steady income [2] - Several auto stocks, including Harley-Davidson, Magna International, Oshkosh Corp., PACCAR, and Group 1 Automotive, have recently increased their first-quarter 2025 dividends [2] Harley-Davidson - Harley-Davidson raised its quarterly dividend by 4.3% to $0.18 per share, resulting in a dividend yield of 2.80% and a payout ratio of around 20% [3] - The company anticipates flat retail sales for 2025, with wholesale shipments expected to decline by 5% and global inventory projected to drop over 10% [4] - The Zacks Consensus Estimate for Harley-Davidson's 2025 EPS is $3.44, reflecting a decrease of $0.76 over the past 30 days [5] Magna International - Magna International increased its quarterly dividend by 2% to $0.485 per share, translating to a dividend yield of 5% and a payout ratio of around 35% [6] - The company is implementing restructuring and cost-cutting measures due to macroeconomic pressures, leading to a revised 2026 sales outlook [7] - The Zacks Consensus Estimate for Magna's 2025 EPS implies growth of 13% [8] Group 1 Automotive - Group 1 Automotive raised its quarterly dividend by 6.3% to $0.50 per share, resulting in a dividend yield of 0.4% and a sustainable payout ratio of 5% [10] - The company has increased dividends 12 times in the last five years, with an annualized growth rate of 12.5% [10] - The Zacks Consensus Estimate for Group 1's 2025 sales and EPS implies growth of 10% and 4.4%, respectively [12] Oshkosh Corporation - Oshkosh raised its quarterly dividend by 11% to $0.51 per share, yielding 1.90% with a payout ratio of around 16% [14] - The company has a strong balance sheet and is expanding its offerings through acquisitions, although it faces short-term softness in its Access segment [15] - The Zacks Consensus Estimate for Oshkosh's 2025 sales and EPS implies a decline of 2.4% and 6.6%, respectively [17] PACCAR - PACCAR increased its quarterly dividend by 10% to $0.33 per share, resulting in a dividend yield of 1.25% and a payout ratio of around 15% [18][19] - The company is poised for growth due to strong demand for its vehicles and strategic expansion initiatives, despite facing significant capital expenditures [20] - The Zacks Consensus Estimate for PACCAR's 2025 sales implies a 0.5% increase year over year, while EPS estimates suggest a 4.2% decline [21]

Core Insights - Harley-Davidson, Inc. reported a fourth-quarter 2024 adjusted loss of 93 cents per share, which was wider than the Zacks Consensus Estimate of a loss of 68 cents, and a significant decline from earnings of 18 cents per share in the same quarter last year [1] - The company generated consolidated revenues of $688 million, down 35% from the prior-year quarter [1] Segmental Highlights - Revenues from the Motorcycle and Related Products segment fell 47% year-over-year to $420 million, missing the forecast of $463 million due to lower motorcycle shipments [2] - Worldwide motorcycle shipments decreased 15% to 25,700 units, lagging behind the estimate of 27,122 units [2] - Revenues from motorcycle sales were $231 million, down 60% year-over-year, with an operating loss of $214 million, wider than the loss of $44 million in the same quarter of 2023 [2] - Retail motorcycle units sold globally were 25,660, down 14.9% year-over-year, with North America sales decreasing 4% to 15,127 units [3] Financial Performance - Revenues for parts and accessories were down 10% year-over-year to $118 million, but exceeded the estimate of $94.7 million [4] - Revenues from Harley-Davidson Financial Services totaled $257 million, up 4% year-over-year, but missed the forecast of $267.1 million [4] - Operating income for Financial Services fell 20% to $46 million, missing the estimate of $56.1 million [4] LiveWire Segment - Total shipments for LiveWire were 236 units, declining 54% from the year-ago quarter, with revenues down 32% to $10 million [5] - Operating loss for LiveWire narrowed from $35 million to $26 million, which was better than the projected loss of $29 million [5] Financial Position - Selling, general and administrative expenses decreased to $210.5 million from $225.5 million in the year-ago quarter [6] - Cash and cash equivalents were $1.59 billion as of December 31, 2024, up from $1.53 billion a year earlier [6] - Long-term debt decreased to $4.47 million from $4.99 million recorded as of December 31, 2023 [6] 2025 Guidance - For 2025, the company expects revenues from HDMC to remain flat to down 5% year-over-year, with an operating income margin expectation of 7-8% for the motorcycle segment [7] - Operating income for Financial Services is anticipated to fall 10-15% compared to 2024 [7] - Electric motorcycle wholesale units for the LiveWire segment are expected to be in the range of 1,000-1,500, with an anticipated operating loss of $70-$80 million [8] - Capital expenditure projection for the full year is estimated to be in the range of $225-$250 million [8]

Financial Data and Key Metrics Changes - In Q4 2024, consolidated revenue decreased by 35%, primarily due to a 47% decline in HDMC revenue, partially offset by a 4% increase in HDFS revenue [45] - Consolidated operating loss in Q4 was $193 million, compared to an operating loss of $21 million in Q4 2023 [46] - Full year 2024 consolidated revenue was $5.2 billion, an 11% decrease compared to the previous year, with consolidated operating income of $417 million, down 47% from 2023 [48] - Earnings per share for 2024 was $3.44, down from $4.97 in 2023 [50] Business Line Data and Key Metrics Changes - HDMC revenue decreased by 15% for the full year 2024, while HDFS revenue increased by 9% [48] - LiveWire reported an operating loss of $110 million for 2024, with a 31% decline in revenue [49][40] - HDMC's operating income was $278 million, down 58% from the prior year, while HDFS operating income was $248 million, up 6% [49] Market Data and Key Metrics Changes - Global retail sales of new motorcycles declined by 15% in Q4 2024, with North America down 13% and international sales down 17% [50] - For the full year 2024, global retail sales were down 7%, with North America retail sales declining by 4% and international sales down 13% [54] - EMEA retail sales were down 11% for the full year, while Asia Pacific retail sales declined by 18% [52][53] Company Strategy and Development Direction - The company continues to execute its Hardwire strategy, focusing on profitable growth despite macroeconomic challenges [6] - The launch of new models, particularly in the Touring segment, has contributed to market share gains, with Harley-Davidson achieving a 74.5% market share in the US Touring segment [7][12] - The company plans to invest in entry-level motorcycles and small cruisers, as well as expand into the adventure touring segment [14][15] Management's Comments on Operating Environment and Future Outlook - Management noted that the high interest rate environment has impacted consumer confidence and affordability [6] - The company expects flat retail sales for 2025, with positive performance skewed towards the second half of the year [34][80] - Management is cautious about macroeconomic conditions but believes the company is well-positioned for future growth [35] Other Important Information - The company achieved operating cash flow of over $1 billion in 2024, a nearly 40% increase from the prior year [24] - Total headcount was down by 7% compared to the end of Q4 2023, contributing to cost productivity savings of $257 million [23][68] - The company repurchased 12.5 million shares in 2024, totaling $450 million, as part of its capital allocation strategy [78] Q&A Session Summary Question: Inventory reduction expectations for touring - Management expects dealer inventory to end the year down 10%, with a more pronounced decrease in the first half of the year [92][93] Question: Margin surprise in Q4 - The margin surprise was attributed to lower volumes, manufacturing costs, and retooling expenses, impacting overall operating income margin [102] Question: Retail outlook for 2025 - Management anticipates a better performance in the second half of 2025 compared to the first half, driven by new product launches and customer awareness [106][108]

Core Insights - Harley-Davidson reported a significant decline in revenue and earnings for the quarter ended December 2024, with revenue of $430.89 million, down 46.6% year-over-year, and an EPS of -$0.93 compared to $0.18 in the same quarter last year [1] - The reported revenue fell short of the Zacks Consensus Estimate of $481.81 million by 10.57%, while the EPS also missed the consensus estimate of -$0.68 by 36.76% [1] Financial Performance - Total worldwide retail sales of Harley-Davidson motorcycles were 25,660, slightly below the average estimate of 26,340 [4] - Total motorcycle shipments were 14,010, compared to the estimated 15,331 [4] - Revenue from motorcycles and related products was $420.49 million, down 46.9% year-over-year, and below the average estimate of $481.81 million [4] - Revenue from motorcycles was $231.47 million, a decline of 60.3% compared to the previous year, and below the estimate of $286.10 million [4] - Revenue from financial services was $256.72 million, representing a 4.3% increase year-over-year, and slightly above the estimate of $254.39 million [4] Market Performance - Harley-Davidson shares have returned -9% over the past month, contrasting with the Zacks S&P 500 composite's +1.7% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Q4 and Full Year 2024 Results Wednesday, February 5, 2025 Q4 AND FULL YEAR 2024 RESULTS – EARNINGS CALL Call Participants 2 ▪ Jochen Zeitz, Chairman, President and CEO ▪ Jonathan Root, Chief Financial Officer and President, Commercial ▪ Karim Donnez, CEO – LiveWire (NYSE: LVWR) ▪ Shawn Collins, Director Investor Relations FULL YEAR 2024 PERFORMANCE HEADLINES 3 • Delivered diluted EPS of $3.44 • HDMC operating income of $278 million for an operating margin of 6.7% • HDMC global motorcycle shipments of 148,86 ...