Core Insights - The Vietnamese electric motorcycle market is experiencing significant growth, with new vehicle sales reaching approximately 209,000 units in the first half of 2025, representing a year-on-year increase of 99.2%, making it the third-largest electric motorcycle market globally after China and India [1] Market Performance - The L1 electric motorcycle segment (under 50cc engine) has seen a remarkable increase in sales, soaring by 112.6% in the first half of 2025. This model targets middle and high school students, offering convenience and low operating costs [1] - Traditional fuel motorcycle sales have also risen, with Vietnamese consumers purchasing 1,284,291 motorcycles in the first half of 2025, a 6.4% increase compared to 1,206,872 units in the same period of 2024 [1] Market Composition - The Vietnamese electric motorcycle market is primarily dominated by local and Chinese brands, with VinFast accounting for over 55% of total electric motorcycle sales in the first half of 2025 [1]

Core Insights - Harley-Davidson has appointed Artie Starrs as the new President and CEO, effective October 1, 2025, succeeding Jochen Zeitz [1][4] - Artie Starrs brings extensive experience from Topgolf, where he led significant revenue growth and global expansion [2][3] - The transition aims to enhance Harley-Davidson's connection with its riders and attract new customers [2][4] Leadership Transition - Jochen Zeitz will remain as Chairman, President, and CEO until October 1, 2025, after which he will serve as a senior advisor until February 2026 [4][5] - Troy Alstead has been appointed to succeed Zeitz as Chairman of the Board effective October 1, 2025 [4][5] - The Board expressed gratitude for Zeitz's leadership and contributions during challenging times [5] Company Background - Harley-Davidson, Inc. is the parent company of Harley-Davidson Motor Company and Harley-Davidson Financial Services, focusing on innovation and adventure [6] - The company aims to maintain its status as the most desirable motorcycle brand globally, offering customizable motorcycles and related experiences [6] - Harley-Davidson has a controlling interest in LiveWire Group, Inc., the first publicly traded all-electric motorcycle company in the U.S., aiming to lead in the electric motorcycle market [7]

Core Insights - Harley-Davidson reported Q2 2025 results with GAAP revenue of $1,307 million, exceeding analyst expectations of $1,099 million, but GAAP earnings per share (EPS) fell to $0.88, below the anticipated $0.96 [1][2] - Year-over-year metrics showed significant declines: revenue decreased by 19%, operating income dropped by 53%, and EPS fell by 46% [1][2] - Management did not provide full-year guidance due to uncertainties related to global tariffs and weak demand for discretionary goods [1] Financial Performance - Q2 2025 GAAP EPS was $0.88, down 46% from $1.63 in Q2 2024 [2] - GAAP revenue was $1,307 million, a 19.3% decline from $1,619 million in Q2 2024 [2] - Operating income fell to $112 million, a 53.5% decrease from $241 million in the previous year [2] - Net income attributable to Harley-Davidson, Inc. was $108 million, down 50.5% from $218 million in Q2 2024 [2] - HDMC operating margin contracted to 5.9%, down from 14.7% a year earlier [2] Business Overview - Harley-Davidson manufactures heavyweight motorcycles known for their distinctive style and brand image, and operates Harley-Davidson Financial Services and LiveWire, its electric motorcycle business [3] - The company has a global presence supported by a widespread dealer network and a robust lifestyle brand [3] Strategic Developments - A significant strategic move involved selling a 4.9% stake in its financial services arm to KKR and PIMCO, unlocking $1.25 billion in discretionary cash [5] - This transaction is expected to fund $450 million in debt repayment and $500 million in share repurchases in the second half of 2025 [5] Market Trends - The core motorcycle segment experienced a contraction, with global retail sales down 15% and shipments falling 28% [6] - North America retail sales declined by 17%, while the Asia-Pacific region saw a 21% drop, attributed to weak demand in China and Japan [6] - Dealer inventory levels were 28% lower compared to Q2 2024 [6] Product Innovation - New product launches included the limited CVO Road Glide RR, targeting both affordability and profitability in smaller displacement and classic motorcycle segments [7] - Parts and accessories revenue decreased by 4%, and apparel revenue was down 13% due to slowed discretionary spending [7] Electric Motorcycle Segment - LiveWire revenue was subdued at $6 million, with units delivered plunging 65% to just 55 [8] - Future investments in LiveWire are restricted to an existing $100 million credit line, with expected operating losses of $59–69 million for full year 2025 [9] Financial Services - Harley-Davidson Financial Services segment revenue slipped 2% to $257 million, maintaining a high margin of 27.1% [10] - Operating income for Financial Services is estimated at $525–550 million for the year, reflecting benefits from the recent transaction [12] Dividend and Share Repurchase - The company continued dividend payments, distributing $0.18 per share, a slight increase from the previous year's $0.1725 [11] - Plans to accelerate share repurchases with proceeds from the KKR and PIMCO transaction in the second half of 2025 [11]

Core Insights - Harley-Davidson reported a revenue of $1.05 billion for the quarter ended June 2025, reflecting a year-over-year decline of 22.6% and an EPS of $0.88 compared to $1.63 a year ago, indicating a significant drop in financial performance [1] - The reported revenue was 7.04% lower than the Zacks Consensus Estimate of $1.13 billion, and the EPS fell short of the consensus estimate of $0.99 by 11.11% [1] Financial Performance Metrics - Total worldwide retail sales of Harley-Davidson motorcycles were 42,254, below the estimated 45,308 [4] - Total worldwide motorcycle shipments were 35,837, compared to the estimated 39,622 [4] - Revenue from motorcycles and related products (HDMC) was $1.04 billion, missing the estimated $1.13 billion, marking a 22.6% decline year-over-year [4] - Financial services revenue (HDFS) was $257.44 million, slightly below the estimated $268.81 million, representing a 2.3% decline year-over-year [4] - Live Wire revenue was $6.01 million, below the estimated $7.35 million, reflecting a 6.8% decline year-over-year [4] - Revenue from parts and accessories was $186.87 million, compared to the estimated $189.7 million, showing a 3.6% decline year-over-year [4] - Apparel revenue was $55.24 million, significantly lower than the estimated $63.64 million [4] - Licensing revenue increased to $5.94 million, exceeding the estimated $4.57 million, with an 8.4% increase year-over-year [4] - Motorcycle revenue was $778.05 million, below the estimated $848.49 million, indicating a 27.2% decline year-over-year [4] Stock Performance - Harley-Davidson shares have returned -8.4% over the past month, contrasting with the Zacks S&P 500 composite's +3.4% change, indicating underperformance in the market [3] - The stock currently holds a Zacks Rank 4 (Sell), suggesting potential continued underperformance in the near term [3]

Financial Data and Key Metrics Changes - Consolidated revenue for Q2 decreased by 19%, primarily due to a planned reduction in motorcycle shipments and soft demand [10][26] - Consolidated operating income was $112 million, reflecting a 69% decline at HDMC [27] - Earnings per share for Q2 was $0.88, with global retail sales down 15% year over year [27][28] - Cash and cash equivalents at the end of Q2 were $1.6 billion, down $261 million from the previous year [47][48] Business Line Data and Key Metrics Changes - HDMC revenue decreased by 23% in Q2, driven by a 28% decline in motorcycle shipments [34] - HDFS revenue was $257 million, a decrease of 2%, while operating income was $70 million, also down 2% [43][44] - LiveWire reported an operating loss of $19 million, an improvement from a $28 million loss in the prior year [46] Market Data and Key Metrics Changes - North American retail sales were down 17%, while international markets saw a 12% decline [27][28] - In Asia Pacific, retail sales decreased by 21% due to intense competition [31] - The U.S. cruiser category experienced a 6% volume growth, increasing market share to 53% [32] Company Strategy and Development Direction - The company entered strategic partnerships with KKR and PIMCO for HDFS, enhancing flexibility and reducing overall leverage [4][6] - Plans to reduce debt by $450 million and accelerate a $1 billion share buyback program [9][50] - Introduction of new entry-level products and a small displacement motorcycle targeting a price below $6,000 [20][19] Management's Comments on Operating Environment and Future Outlook - Management noted ongoing economic uncertainty and elevated interest rates impacting customer purchasing behavior [10][11] - There is cautious optimism regarding future trade agreements that may mitigate operational impacts [14] - Management expects a significant improvement in retail performance in July, with positive trends anticipated for the remainder of the year [67][68] Other Important Information - The company plans to implement a new efficiency program leveraging technology, including AI, to drive cost savings [11] - The global tariff environment remains uncertain, with an estimated full-year impact from tariffs projected between $50 million and $85 million [42] Q&A Session Summary Question: What are the components used to calculate the 1.75 times book value marker for the HDFS transaction? - The calculation is based on the proceeds from KKR and PIMCO's equity investment relative to the post-transaction book value of HDFS [52][54] Question: What is driving the underlying profitability of HDFS, and what is the normalized profitability expected in 2026? - The profitability has improved due to stabilization in used values and better repossession rates, with normalized earnings expected to be around $240 million to $250 million annually [56][65] Question: How does the company feel about current dealer inventories and the target for year-end? - The company expects a significant reduction in dealer inventory, targeting a double-digit decline by year-end [73] Question: Why was the 4.9% equity sale the right level, and are there any tax ramifications? - The 4.9% limit is due to regulatory requirements from the FDIC, and the $1.25 billion figure is a pretax amount [78][82] Question: Is there any guarantee of growth in retail sales or receivables associated with the HDFS transaction? - There are no guarantees regarding growth rates or loss levels associated with the transaction [89]

Financial Data and Key Metrics Changes - Consolidated revenue for Q2 2025 decreased by 19%, primarily due to a planned reduction in motorcycle shipments and soft demand [10][27] - Consolidated operating income was $112 million, reflecting a 69% decline at HDMC, while HDFS operating income decreased by 2% [28][43] - Earnings per share for Q2 was $0.88, with global retail sales down 15% year over year [28][29] - Operating cash flow decreased by $68 million from the prior period, totaling $509 million [47] Business Line Data and Key Metrics Changes - HDMC revenue decreased by 23% in Q2, driven by a 28% decline in motorcycle shipments [34][35] - HDFS revenue was $257 million, down 2% due to lower retail and commercial receivables [43] - LiveWire reported an operating loss of $19 million, an improvement from a $28 million loss in the prior year [46] Market Data and Key Metrics Changes - North American retail sales were down 17%, while international markets saw a 12% decline [28][29] - In EMEA, retail was down 5%, with growth in Germany and the Benelux regions offset by declines in France and the UK [30] - Asia Pacific retail was down 21%, attributed to intense competition in the lightweight motorcycle segments [31] Company Strategy and Development Direction - The company entered strategic partnerships with KKR and PIMCO for HDFS, aiming to enhance long-term value and reduce overall funding costs [4][5] - Plans to reduce debt by $450 million and accelerate a $1 billion share buyback program were announced [9][49] - The introduction of new entry-level products and a small displacement motorcycle is scheduled for 2026, targeting a price below $6,000 [20][19] Management's Comments on Operating Environment and Future Outlook - Management noted ongoing economic uncertainty and elevated interest rates impacting customer purchasing behavior [10][11] - There are signs of improvement in customer traffic in North America, with expectations for positive retail performance in the second half of the year [66][67] - The company remains cautious about the global tariff environment, estimating a full-year impact of $50 million to $85 million from tariffs [42] Other Important Information - The HDFS transaction is expected to generate $1.25 billion in cash for Harley Davidson, representing about 40% of the current market cap [9][10] - The company is committed to returning capital to shareholders despite the challenging operating environment [48] Q&A Session Summary Question: What are the components used to calculate the 1.75 times book value marker for the HDFS transaction? - The calculation is based on the proceeds from KKR and PIMCO's equity investment in the business, reflecting the premium paid versus the post-transaction book value [52][54] Question: What is driving the underlying profitability of HDFS? - The profitability has improved due to stabilization in used motorcycle values and better repossession rates, contributing positively to HDFS performance [56][58] Question: How does the company view current dealer inventories and what is the target for year-end? - The company expects a significant reduction in dealer inventory, targeting a double-digit decline by year-end [71] Question: What is the timing of the model launch shift? - The model year shift is planned for the fall, with new models being introduced to maintain excitement in dealerships [73][74] Question: Are there any guarantees associated with the HDFS transaction regarding growth in retail sales? - There are no guarantees for maintaining certain growth rates or loss levels; however, there is confidence in the business's ability to run profitably through cycles [88][89]

Financial Data and Key Metrics Changes - Consolidated revenue in Q2 2025 decreased by 19%, largely in line with expectations across HDMC and HDFS, while revenue also decreased at LiveWire [27] - Consolidated operating income for Q2 was $112 million, a decline of 69% at HDMC, while HDFS operating income decreased by 2% [28] - Earnings per share for Q2 was $0.88, with global retail sales down 15% year-over-year [28][29] - Operating cash flow was $509 million, down $68 million from the prior period, with total cash and cash equivalents at $1.6 billion, a decrease of $261 million year-over-year [46][47] Business Line Data and Key Metrics Changes - HDMC revenue decreased by 23% in Q2, driven by a 28% decline in motorcycle shipments, totaling 36,000 units compared to 50,000 units in the prior year [34] - HDFS revenue was $257 million, a decrease of 2%, with operating income at $70 million, down 2% compared to last year [43] - LiveWire reported an operating loss of $19 million, an improvement from a $28 million loss in the prior Q2, with unit sales down to 55 from 158 [46] Market Data and Key Metrics Changes - North American retail sales were down 17%, while international markets saw a decline of 12% [28][29] - In EMEA, retail was down 5%, with growth in Germany and the Benelux regions offset by declines in France and the UK [30] - Asia Pacific retail was down 21%, attributed to intense competition in the lightweight motorcycle segments [31] Company Strategy and Development Direction - The company has entered strategic partnerships with KKR and PIMCO for HDFS, aiming to enhance long-term value and reduce overall funding costs [3][5] - A new efficiency program will be introduced to enhance productivity, leveraging technology including AI for cost savings [11] - Plans to launch new entry-level products and a small displacement motorcycle are set for 2026, targeting an entry price below $6,000 [20][19] Management's Comments on Operating Environment and Future Outlook - Management noted ongoing economic uncertainty and elevated interest rates impacting customer purchasing behavior [10][29] - There are signs of improvement in customer traffic in North America, with expectations for positive comp growth in the latter half of the year [64][65] - The company remains cautious about the global tariff environment, estimating a full-year impact from tariffs to be between $50 million and $85 million [42] Other Important Information - The HDFS transaction is expected to generate $1.25 billion in cash for Harley Davidson, allowing for debt reduction and share buybacks [9][49] - The company plans to reduce debt by $450 million and invest up to $300 million in future growth opportunities [49] Q&A Session Summary Question: What are the components used to calculate the 1.75 times book value marker for the HDFS transaction? - The calculation is based on the proceeds from KKR and PIMCO for their equity investment in the business, reflecting the premium paid versus the post-transaction book value [51][53] Question: What is driving the underlying profitability of HDFS, and what is the normalized profitability expected in 2026? - The profitability has improved due to stabilization in used values and better repossession rates, with normalized earnings expected to be around $240 million to $250 million annually [55][62] Question: How does the company feel about current dealer inventories and the target for year-end? - The company expects a significant reduction in dealer inventory, targeting a double-digit decline by year-end [69][70] Question: What is the rationale for the 4.9% equity sale in the HDFS transaction? - The 4.9% limit is due to regulatory requirements from the FDIC regarding ownership percentages in the HDFS business [76][78]

Q2 2025 Performance - Harley-Davidson diluted EPS was $0.88[6] - HDMC operating income margin was 5.9%[6] - HDMC revenue decreased by 23% year-over-year[6] - Global motorcycle shipments decreased by 28%, primarily due to planned dealer inventory reduction[6] - Global motorcycle retail sales decreased by 15% year-over-year[6] - Global dealer inventories decreased by 28% compared to Q2 '24[6, 21] - The cost of new or increased tariffs implemented in '25 was $13 million in Q2 '25[6] - HDFS operating income margin was 27.1%[6] HDFS Transaction - Strategic partners valued the HDFS business at approximately 1.75x post-transaction book value[7, 11, 14] - HDFS agreed to sell a 4.9% common equity interest to investment vehicles managed by KKR and PIMCO[7] - HDFS will sell approximately two-thirds of HDFS future retail loan originations at a premium on an annual basis for five years[7, 14, 55, 58] - The transaction unlocks $1.25 billion in discretionary cash, representing approximately 40% of current Harley-Davidson market capitalization[7] - HDFS agreed to sell over $5 billion of existing gross consumer retail loan receivables and residual interests in securitized consumer loan receivables at a premium[7, 14, 55] - HDFS expects to use a portion of the proceeds to reduce indebtedness to optimize its post-transaction capital structure[7] Financial Outlook & Capital Allocation - HDFS transaction is expected to generate ~$1B of available cash and allow for ~$1.25B distribution to H-D from HDFS[14, 67] - The company intends to use available cash for share buyback of $500M, HDI debt reduction of $450M and reinvestment in HDMC[14, 66]

Group 1 - Harley-Davidson is expected to report Q2 2025 earnings on July 30, 2025, with consensus forecasts indicating earnings of approximately $0.96 per share, down from $1.63 in the same quarter last year, and revenue expected to be around $1.1 billion, reflecting a nearly 19% year-over-year decrease [2] - The decline in earnings and revenue suggests a diminishing interest in Harley's high-end motorcycles, attributed to low consumer confidence amid high interest rates and economic uncertainty [2] - The company has retracted its full-year 2025 outlook due to uncertainties related to trade policies and macroeconomic fluctuations, while management emphasizes commitment to cost control and stricter inventory management [2] Group 2 - Harley-Davidson currently has a market capitalization of $3.0 billion, with revenue for the past twelve months at $4.8 billion, generating $314 million in operating profits and $354 million in net income [3] - Historical trends indicate that there have been 17 earnings data points over the past five years, with 11 positive and 6 negative one-day returns, resulting in a 65% occurrence of positive returns [5] - The median of the 11 positive returns is 7.8%, while the median of the 6 negative returns is -6.8% [5] Group 3 - A strategy to analyze the correlation between short-term and medium-term returns post-earnings can be effective, particularly if the correlation is strong [6] - The correlation between 1D and 5D returns can guide traders to position themselves "long" for the subsequent 5 days if the 1D post-earnings return is positive [6] - The performance of peers can influence Harley-Davidson's stock reaction following earnings, with market adjustments potentially beginning prior to the earnings announcement [7]

Group 1 - Harley-Davidson has been facing challenges recently, with a previous recommendation of 'buy' made in late October 2022 [1] - The overall picture for the motorcycle manufacturer has deteriorated since the earlier positive outlook [1] Group 2 - Crude Value Insights provides an investment service focused on oil and natural gas, emphasizing cash flow and growth potential [1] - Subscribers benefit from a stock model account, detailed cash flow analyses of exploration and production firms, and live discussions about the sector [2]