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Fiscal First Half Year Ended September 30, 2025 Financial Results Operating Profit 438.1 bil. yen Motorcycles: Although sales in Vietnam declined, global sales remained strong, primarily driven by growth in Brazil. For the six months ended September 30, we achieved the record-high sales volume, operating profit, and operating margin. Automobiles: While price revisions had a positive impact, profit decreased due to tariff impacts and one-time expenses related to EVs. Operating cash flows after R&D adjustment ...

Core Insights - Harley-Davidson, Inc. reported third-quarter 2025 adjusted earnings of $3.10 per share, significantly exceeding the Zacks Consensus Estimate of $1.38, and up from 91 cents per share in the same quarter last year [1][9] - The company generated consolidated revenues of $1.34 billion, reflecting a 17% increase year-over-year, driven by a 33% rise in motorcycle shipments [1][9] Segmental Highlights - Revenues from the Motorcycle and Related Products segment increased by 23% year-over-year to $1.07 billion, surpassing the forecast of $1.02 billion due to higher-than-expected motorcycle shipments [2] - Worldwide motorcycle shipments rose 33% to 36,500 units, exceeding the estimate of 34,541 units, with motorcycle sales revenues reaching $822 million, up 34% year-over-year [2] - Operating income for the Motorcycle segment was $54 million, a slight decline of 2% year-over-year [2] Retail Performance - Harley-Davidson retailed 34,000 motorcycle units globally, a 6% decline year-over-year but above expectations of 32,360 units [3] - Retail sales in North America decreased by 5% to 23,500 units, while EMEA sales fell 17% and Asia Pacific sales dropped 3%, contrasting with a 16% increase in Latin America [3] Parts, Accessories, and Financial Services - Revenues from parts and accessories decreased by 4% year-over-year to $167 million, but exceeded the estimate of $165.3 million [4] - Apparel revenues rose by 1% to $56 million, falling short of the forecast of $57.5 million [4] - Harley-Davidson Financial Services reported revenues of $261 million, down 3% year-over-year, while operating income surged 472% to $439 million [4] LiveWire Performance - LiveWire shipments totaled 184 units, an 86% increase from the previous year, with revenues rising 16% to $6 million, although this fell short of the $9.3 million estimate [5] - The operating loss for LiveWire narrowed from $26 million to $18 million, slightly better than the projected loss of $18.6 million [5] Financial Position - Selling, general, and administrative expenses increased to $229 million from $208.7 million year-over-year [6] - Harley-Davidson had cash and cash equivalents of $1.78 billion as of September 30, 2025, with long-term debt decreasing to $3.15 million from $4.47 million at the end of 2024 [6] Guidance Updates - The company has withheld its 2025 HDMC financial outlook due to tariff uncertainties but updated guidance for the LiveWire business, now expecting an operating loss of $72-$77 million, up from a previous estimate of $59-$69 million [7]

Core Insights - Harley-Davidson Inc. shares fell over 5% despite reporting third-quarter results that significantly exceeded expectations, driven by a transformation in its financial services division [1] Financial Performance - The company reported adjusted earnings of $3.10 per share, surpassing the consensus estimate of $1.58, while revenue increased by 17% year-over-year to $1.34 billion, exceeding estimates of $1.01 billion [2] - The strong performance was largely attributed to the completion of the Harley-Davidson Financial Services transaction with KKR and PIMCO, which transitioned the unit to a capital-light, lower-risk structure [2] Market Trends - Global motorcycle retail sales declined by 6% compared to the previous year, with North America down 5% and international markets down 9%, reflecting weaker consumer confidence and higher interest rates [3] - The motorcycle segment (HDMC) experienced a 23% revenue increase as global shipments rose by 33%, although the operating income margin for HDMC decreased to 5.0% from 6.3% a year ago [3] Future Outlook - Management indicated that the HDFS deal is expected to generate approximately $1.2 billion to $1.25 billion in discretionary cash by the end of the first quarter of 2026 [3]

Financial Performance - Harley-Davidson reported higher third-quarter profit [1] Market Trends - Demand for motorcycles remains soft due to economic uncertainty and global tariffs [1]

Financial Data and Key Metrics Changes - Consolidated revenue in Q3 2025 increased by 17%, driven by a 23% increase in HDMC revenue, which rose by $198 million compared to the prior year [16][20] - Consolidated operating income for Q3 was $475 million, primarily influenced by HDFS operating income, which was positively impacted by the HDFS transaction [16][22] - Earnings per share for Q3 was $3.10, with global retail down 6% [17][30] - HDFS revenue decreased by 3%, while LiveWire revenue increased by 16% [16][30] Business Line Data and Key Metrics Changes - HDMC's operating income decreased by 2% year-over-year, while LiveWire reported an operating loss of $18 million [16][30] - HDMC gross margin was 26.4%, down from 30.1% in the prior year, due to unfavorable operating leverage and increased tariffs [21][22] - HDFS's operating income increased by 472% year-over-year, driven by a lower provision for credit losses and higher other income [26][28] Market Data and Key Metrics Changes - Global retail was down 6%, with North America down 5% and international markets down 9% [17][30] - In North America, the Softail family saw a 9% increase, while Adventure Touring bikes were up 4% [18][19] - EMEA retail was down 17%, but non-core segments like Adventure Touring and Nightster motorcycles showed strong growth [19][20] - In Latin America, retail was up 16%, marking the first quarter of growth since Q3 2024 [19][20] Company Strategy and Development Direction - The company is focused on improving dealer health and profitability, with immediate actions to enhance motorcycle inventory management and introduce market-responsive promotions [5][6] - The HDFS transaction aims to transform the business into a capital-light model, unlocking $1.2 to $1.25 billion in discretionary cash [14][15] - Future strategies include enhancing product accessibility, improving speed to market, and focusing on cost and capital efficiency [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed disappointment in Q3 results but highlighted the strategic value of the HDFS transaction [6][16] - The current macro environment is challenging, with high interest rates and inflation impacting consumer confidence [17][30] - Management is optimistic about future product launches and the potential to attract younger riders through new offerings [36][38] Other Important Information - The company plans to use proceeds from the HDFS transaction for debt reduction, share buybacks, and organic growth initiatives [32][31] - Total cash and cash equivalents at the end of Q3 were $1.8 billion, down $469 million from the previous year [31] Q&A Session Summary Question: Thoughts on demographic headwinds facing Harley-Davidson - Management acknowledged the need to attract younger riders and emphasized the importance of a fun and welcoming dealership experience [36][37] Question: Elaboration on market-responsive promotions - Management indicated that high dealer inventory levels necessitate promotional activities to drive sales, particularly for Touring models [39][40] Question: Impact of the HDFS transaction on operating income - Management confirmed that the transaction is expected to provide a $275-$300 million operating income benefit in the second half of the year [44][46] Question: Expectations for fourth quarter retail performance - Management noted improvements in dealer traffic but refrained from providing specific guidance due to market uncertainties [57][58] Question: Shipment expectations for 2026 - Management indicated that inventory levels are being managed carefully, with a focus on reducing Touring inventory while preparing for new model launches [52][54]

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, with a decline in global retail by 6% [25] Business Line Data and Key Metrics Changes - HDMC revenue rose by 23% in Q3, with motorcycle shipments up 33% to 36,500 units, while HDFS revenue decreased by 3% and LiveWire revenue increased by 16% [24][25] - LiveWire reported a consolidated operating loss of $18 million, but improved its operating loss by 30% or $8 million compared to the previous year [41] Market Data and Key Metrics Changes - Global retail was down 6%, with North America down 5% and international markets down 9%, reflecting soft demand due to high interest rates and inflation concerns [25] - In North America, the Softail family saw a growth of 9%, while Adventure Touring bikes increased by 4% [25][26] - In Latin America, retail was up 16%, marking the first quarter of growth for the region since 2024 [29] Company Strategy and Development Direction - The company is focusing on improving dealer health and profitability, with immediate actions to enhance motorcycle inventory management and introduce market-responsive promotions [6][7] - The strategic partnership with KKR and PIMCO aims to transform HDFS into a capital-light model, unlocking $1.2 billion to $1.25 billion in discretionary cash through 2026 [21][22] - Future product offerings will balance aspiration with accessibility to attract new riders, with a focus on affordability and speed to market [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed disappointment in the Motor Company's results but highlighted the positive impact of the HDFS transaction [10] - The current macro environment is challenging, with high interest rates affecting consumer confidence, but there is optimism about improving dealer engagement and sales performance [25][46] - The company plans to provide more details on its strategy and expectations in the spring of next year [45] Other Important Information - Global dealer motorcycle inventories decreased by 13% compared to the end of 2024, with a commitment to further reduce inventory levels [30] - The company has returned $1.7 billion to shareholders through share repurchases and dividends since the start of 2022 [43] Q&A Session Summary Question: How does the company plan to address demographic headwinds? - Management acknowledged the need to attract younger riders and plans to enhance the brand's image and product offerings to make them more appealing to younger demographics [50][54] Question: Can you elaborate on market-responsive customer promotions? - Management indicated that high dealer inventory levels necessitate immediate promotional actions, including local marketing initiatives and lower APR financing options to drive sales [56][60] Question: What is the expected impact of the HDFS transaction on future operating income? - Management confirmed that the transaction is expected to provide significant operating income benefits, with $275 million to $300 million anticipated in the second half of the year [65][68] Question: What are the shipment expectations for 2026? - Management indicated that while they are not providing specific guidance for 2026, they expect to continue reducing dealer inventory and improving sales performance [71][75] Question: How is the company addressing the current retail environment? - Management noted that they are seeing sequential improvements in dealer traffic and are focused on enhancing marketing strategies to drive sales [86]

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]

分组1 - Harley-Davidson reported quarterly earnings of $3.1 per share, exceeding the Zacks Consensus Estimate of $1.38 per share, and showing a significant increase from $0.91 per share a year ago, resulting in an earnings surprise of +124.64% [1] - The company achieved revenues of $1.08 billion for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 7.98%, compared to revenues of $881.21 million in the same quarter last year [2] - Over the last four quarters, Harley-Davidson has surpassed consensus EPS estimates two times and topped consensus revenue estimates once [2] 分组2 - The stock has underperformed the market, losing about 10% since the beginning of the year, while the S&P 500 has gained 16.5% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to those expectations [4] - The current consensus EPS estimate for the upcoming quarter is $0.17 on revenues of $616.82 million, and for the current fiscal year, it is $3.75 on revenues of $3.75 billion [7] 分组3 - The Zacks Industry Rank indicates that the Automotive - Domestic sector is currently in the bottom 41% of over 250 Zacks industries, suggesting potential challenges for stocks in this category [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors or through tools like the Zacks Rank [5] - The estimate revisions trend for Harley-Davidson was unfavorable prior to the earnings release, resulting in a Zacks Rank 5 (Strong Sell) for the stock, indicating expected underperformance in the near future [6]

Core Insights - Harley-Davidson Inc. reported third-quarter results that exceeded Wall Street expectations, indicating a strong performance despite underlying challenges in its core motorcycle business [1] Financial Performance - The company's third-quarter results showed a positive trend, surpassing analyst forecasts, which reflects a resilient financial position [1] - Specific figures regarding revenue and profit margins were not detailed in the provided text, but the overall performance was noted as better than anticipated [1] Business Challenges - Despite the strong quarterly results, the motorcycle segment faces significant challenges that could impact future growth [1] - The underlying issues in the core motorcycle business suggest potential risks that need to be monitored closely [1]