Financial Data and Key Metrics Changes - Consolidated revenue in Q4 2025 decreased by 28%, driven by a 10% decline in HDMC revenue and a 59% decline in HDFS revenue [25] - Consolidated operating income for Q4 was a loss of $361 million, compared to a loss of $193 million in Q4 2024 [25] - For the full year 2025, consolidated revenue was $4.5 billion, down 14% from the previous year, with earnings per share at $2.78 compared to $3.44 in 2024 [27] Business Line Data and Key Metrics Changes - HDMC retail sales in Q4 increased by 5% in North America, while international retail sales decreased by 10%, resulting in a global retail sales decline of 1% [27] - For the full year 2025, HDMC revenue decreased by 13% to $3.6 billion, with wholesale volumes down 16% [34] - HDFS revenue for Q4 was $106 million, down from $257 million in the prior year, primarily due to lower retail and wholesale finance receivables [40] Market Data and Key Metrics Changes - North American retail sales were up 5% in Q4, while EMEA retail sales declined by 24% due to adverse macroeconomic conditions [28][29] - Asia Pacific retail sales declined by 1% in Q4, with significant weakness in China, while Latin America saw a 10% increase in retail sales [29] - Global retail sales of new motorcycles were down 12% for the full year 2025, with both North America and international markets showing similar performance [32] Company Strategy and Development Direction - The company is focused on stabilizing the business by restoring dealer confidence and aligning wholesale activity with retail demand [5] - Immediate priorities include improving dealer profitability, reigniting brand momentum, and reducing costs [6] - A strategic plan is expected to be announced in May 2026, with a focus on sustainable growth and optimizing inventory management [4][12] Management's Comments on Operating Environment and Future Outlook - Management views 2026 as a transition year to reset the business and finalize the new strategy, with expectations of pressure on margins in the near term [12] - The company anticipates a cost of $75 million to $105 million in new or increased tariffs for 2026, which will impact operating margins [51] - Management is optimistic about returning to long-term earnings and free cash flow levels, emphasizing the importance of healthy dealer inventory levels [12][50] Other Important Information - The HDFS transaction is expected to transform the business into a capital-light model, with a significant reduction in debt and improved financial flexibility [24][39] - The company plans to repurchase shares, with $200 million allocated for share buybacks, while being measured in approach until the strategic plan is finalized [22][48] - LiveWire segment saw a 7% increase in electric motorcycle units for the full year, with a focus on launching new products in 2026 [44] Q&A Session Summary Question: What is the long-term profitability outlook for HDFS? - Management indicated that HDFS operating income is expected to be between $45 million and $60 million for 2026, with a potential to triple that in the long term [56][58] Question: How should we think about wholesale shipment growth in 2026? - Management expects Q1 2026 wholesale shipments to be down slightly compared to the previous year, with an increase anticipated in Q2 [62] Question: What are the expectations for global retail sales? - Management anticipates flat global retail sales, with potential upside in U.S. retail due to new model introductions and dealer enthusiasm [70]