Harley-Davidson(US:HOG)2025-11-05 21:15Financial Performance - Net income for Harley-Davidson, Inc. in Q3 2025 was $377.4 million, or $3.10 per diluted share, compared to $119.0 million, or $0.91 per diluted share, in Q3 2024[163] - The company reported operating income of $474.8 million in Q3 2025, a significant increase of 348.7% compared to $105.8 million in Q3 2024[1] - HDFS segment operating income surged by $362.1 million, reaching $438.8 million in Q3 2025, compared to $76.7 million in the same period last year[1] - Net income attributable to Harley-Davidson, Inc. was $377.4 million in Q3 2025, up 217.0% from $119.0 million in Q3 2024[1] - Diluted earnings per share increased to $3.10, reflecting a 240.7% rise from $0.91 in the prior year[1] - Net income attributable to Harley-Davidson, Inc. increased by $45.8 million (8.0%) to $618.0 million in the first nine months of 2025[207] - Diluted earnings per share increased by $0.76 (17.8%) to $5.03 in the first nine months of 2025 compared to the same period in 2024[210] Sales and Market Performance - Worldwide retail sales of new Harley-Davidson motorcycles declined by 6.0% in Q3 2025 compared to Q3 2024, with North America down 4.5%, EMEA down 16.9%, and Asia-Pacific down 3.4%[165] - Retail sales of new Harley-Davidson motorcycles in North America decreased by 4.5%, with a 4.2% decline in the U.S. market during Q3 2025[1] - Retail unit sales of new Harley-Davidson motorcycles decreased by 18,321 units (14.6%) to 107,248 units in the first nine months of 2025 compared to the same period in 2024[212] - U.S. motorcycle shipments decreased by 17,498 units (19.5%) to 72,263 units in the first nine months of 2025 compared to the same period in 2024[217] - The Company's U.S. market share of new 601+cc motorcycles decreased by 3.9 percentage points to 33.8% in the first nine months of 2025[214] Segment Performance - HDMC segment operating income decreased to $54.1 million in Q3 2025, down $1.0 million from Q3 2024, primarily due to higher manufacturing and tariff costs[164] - Operating income for the HDMC segment fell by $259.8 million, or 52.9%, from $491.5 million in 2024 to $231.7 million in 2025, with an operating margin decline of 6.1 percentage points[219] - LiveWire segment revenue increased by 15.7% to $5.6 million in Q3 2025, driven by higher electric motorcycle sales[1] - LiveWire segment revenue decreased by $1.6 million, or 10.3%, from $15.96 million in 2024 to $14.32 million in 2025, primarily due to lower electric motorcycle volumes[224] - Operating loss for the LiveWire segment improved to $18.2 million, a reduction of 30.3% compared to a loss of $26.1 million in Q3 2024[1] Cost and Investment - The total cost of new or increased tariffs incurred by the Company in 2025 was approximately $45 million, with potential impacts estimated between $55 million to $75 million for the full year[166] - Capital investments for 2025 are now expected to be between $175 million to $200 million, down from a previous expectation of $200 million to $225 million[179] - The Company achieved productivity savings of approximately $257 million from 2022 to 2024 and an additional $75 million in the first nine months of 2025, with an expectation of $100 million in annual savings for 2025 and 2026[178] Shareholder Returns - The Company remains committed to repurchasing approximately $1 billion of shares from Q3 2024 through the end of 2026, including a $200 million accelerated share repurchase program expected to commence in Q4 2025[180] - Cash outflows for share repurchases were $193.2 million in the first nine months of 2025, compared to $359.8 million in the same period last year[245] Financial Position and Liquidity - The Company had cash and cash equivalents of $1,775.04 million and total availability under credit and conduit facilities of $3,679.71 million as of September 30, 2025[236] - The Company's total outstanding debt decreased to $5.16 billion as of September 30, 2025, from $7.80 billion as of September 30, 2024[246] - The Company extended its existing $710.0 million five-year credit facility to mature in April 2029, providing additional liquidity[249] Risk Management - The Company is exposed to market risks from foreign currency exchange rates, commodity prices, and interest rates, utilizing derivative financial instruments to mitigate these risks[275] - HDMC segment operating results are significantly affected by fluctuations in the Euro, Australian dollar, and other currencies, with foreign currency contracts in place to manage this risk[276] - HDFS operating income is impacted by interest rate changes, with interest rate caps used to reduce fluctuations on floating-rate asset-backed securitization transactions[279] Strategic Initiatives - The Company plans to introduce a new small displacement motorcycle with a targeted entry price below $6,000 and shift the timing of its annual new model year launch to the preceding fall[172] - The company anticipates a slower EV adoption due to a lack of government incentives and regulatory challenges, impacting future investment strategies in LiveWire[265] - LiveWire plans to expand internationally, which will increase its exposure to currency rate risk as it grows its international presence[278]