Financial Data and Key Metrics Changes - Consolidated revenue in Q3 increased by 17%, driven by a 23% increase in HDMC revenue, amounting to an additional $198 million compared to the prior year [23] - Consolidated operating income for Q3 was $475 million, primarily influenced by the HDFS transaction, with an operating income margin of 35.4%, significantly up from 9.2% in the same quarter last year [24] - Earnings per share for Q3 was reported at $3.1, while global retail sales decreased by 6% [25] Business Line Data and Key Metrics Changes - HDMC revenue rose by 23% in Q3, with motorcycle shipments increasing by 33% to 36,500 units [31] - HDFS revenue decreased by 3%, while LiveWire revenue increased by 16% [24] - LiveWire reported a consolidated operating loss of $18 million, but improved its cash usage by 39% compared to the previous year [40] Market Data and Key Metrics Changes - North American retail sales were down 5%, while international markets saw a decline of 9%, attributed to soft demand and high interest rates [25] - In Latin America, retail sales increased by 16%, marking the first quarter of growth since 2024 [29] - The U.S. market share for HD in the large cruiser category expanded from 61% in 2024 to 68% in 2025 [30] Company Strategy and Development Direction - The company is focusing on improving dealer health and profitability, emphasizing the importance of a strong dealer network [6][12] - Plans include enhancing motorcycle inventory management, introducing market-responsive promotions, and reviewing e-commerce strategies [7][8] - The HDFS transaction aims to transform the business into a capital-light model, unlocking $1.2 billion to $1.25 billion in discretionary cash through 2026 [21][22] Management's Comments on Operating Environment and Future Outlook - Management expressed disappointment with the Motor Company results but highlighted the positive impact of the HDFS transaction [10] - The current macro environment is challenging, with a focus on affordability and cost efficiency to attract new riders [14][15] - Future strategies will include simplifying marketing programs and enhancing the overall riding experience [46][47] Other Important Information - The company plans to use proceeds from the HDFS transaction for debt reduction, share buybacks, and organic growth initiatives [43][44] - Total cash and cash equivalents at the end of Q3 were $1.8 billion, down $469 million from the previous year [42] Q&A Session Summary Question: Demographic headwinds facing Harley Davidson - Management acknowledged the need to attract younger riders and plans to make the brand more fun and accessible through product offerings and marketing [50][51][53] Question: Market responsive customer promotions - Management discussed the importance of addressing high dealer inventory levels and implementing local promotional activities to drive sales [55][56] Question: Impact of the HDFS transaction on operating income - Management confirmed that the transaction is expected to provide a significant operating income benefit, with $275 million to $300 million anticipated in the second half of the year [62][65] Question: Expectations for 2026 shipments and inventory - Management indicated that while they are not providing specific guidance for 2026, they expect to continue reducing dealer inventory levels [68][72] Question: Fourth quarter retail expectations - Management refrained from providing specific guidance but noted improvements in dealer traffic and sales dynamics [82][84] Question: Theoretical question on shipments and margin expansion - Management emphasized that margin expansion would depend on reversing current negative trends and highlighted the importance of pricing strategies and marketing effectiveness [87][89]