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]