Harley-Davidson(US:HOG)2023-02-02 18:17Financial Data and Key Metrics Changes - In Q4 2022, total consolidated revenue was $1.14 billion, a 12% increase year-over-year, with HDMC revenue up 14% and HDFS revenue up 7% [25][27] - Full year 2022 total consolidated revenue reached $5.8 billion, an 8% increase compared to the previous year, with total operating income of $909 million, a 10% increase [27][34] - Earnings per share for the full year was $4.96, an 18% increase from $4.19 in the previous year [27][34] - HDMC operating margin improved from 10.6% in 2021 to 13.9% in 2022, driven by pricing and productivity [31][34] Business Line Data and Key Metrics Changes - HDMC wholesale motorcycle units increased by 18% year-over-year, contributing to a 14% revenue increase [25][29] - LiveWire segment revenue decreased by 28% in Q4 to $9 million, but full year revenue was $47 million, a 31% increase [32][34] - Parts and accessories business grew by 7% on a per bike basis despite supply chain challenges [13][27] Market Data and Key Metrics Changes - Global retail sales of new motorcycles were flat in Q4, with total 2022 retail sales down 8% globally, primarily due to a production suspension in Q2 [27][28] - APAC retail grew by 12%, with significant growth in Japan and China, driven by focused investments [28][29] - North America retail sales declined by 12% for the full year, attributed to the production suspension [28] Company Strategy and Development Direction - The company is focused on its Hardwire strategic plan, emphasizing profitable growth rather than unit growth [6][8] - Key strategic pillars include strengthening positions in profitable motorcycle segments, expanding product offerings, and enhancing customer experience [8][12] - The company aims to capitalize on its 120th anniversary to engage with customers and promote its brand [41] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about the potential for growth in 2023, despite ongoing economic challenges [8][10] - The company anticipates flat to slightly positive retail growth for the year, with stronger performance expected in the second and third quarters [44][60] - Management is focused on maintaining product desirability and profitability while adjusting to market demand [62] Other Important Information - The company plans to invest $225 million to $250 million in capital expenditures in 2023, focusing on product development and manufacturing enhancements [36][38] - The company is also addressing supply chain costs, aiming to eliminate $400 million of incremental costs incurred since 2020 [37] Q&A Session Summary Question: Demand signals across consumer segments - Management noted that demand signals are still early, but January performance was in line with expectations, anticipating flat to slightly positive retail growth for the year [43][44] Question: Retail and shipment tracking in 2023 - Management expects a combination of unit growth and pipeline filling to equate to a 2% growth in motorcycle units for the year [48] Question: Dealer inventory numbers - Current dealer inventory stands at 34,000 units, which is 15,000 more than in 2022 but still 60% of 2019 levels, indicating a healthier inventory position [54] Question: Guidance clarification for 2023 - Management confirmed that the EBITDA guidance for 2023 is in the range of $850 million to $875 million [56][57] Question: LiveWire unit expectations - The change in unit expectations for LiveWire is primarily due to a revised timeline for the Del Mar motorcycle, with sales expected to ramp up in the second half of 2023 [58] Question: Industry outlook and market share - Management is focusing on internal growth opportunities rather than industry-wide comparisons, expecting core quarters to drive retail growth [60][62]