Harley-Davidson(US:HOG)2024-02-08 17:20Financial Data and Key Metrics Changes - In Q4 2023, total consolidated HDI revenue was $1.1 billion, down 8% compared to the same quarter last year [21] - For the full year 2023, total consolidated revenue was just over $5.8 billion, a 1% increase year-over-year, while total operating income was $779 million, down 14% from the previous year [23] - Q4 earnings per share was $0.18, while full year earnings per share was $4.87, compared to $4.96 in 2022 [22][23] - Operating income margin for HDMC was 13.6% in 2023, compared to 6.3% in 2019 [7][28] Business Line Data and Key Metrics Changes - Global wholesale motorcycle shipments decreased by 13% in Q4 2023, with HDMC revenue down 14% due to lower volumes [20][21] - LiveWire revenue increased from $9 million in Q4 2022 to $15 million in Q4 2023, driven by higher unit sales of Del Mar electric motorcycles [21][33] - HDFS revenue grew by 15% in Q4 2023, while operating income was $58 million, down 10% year-over-year [21][29] Market Data and Key Metrics Changes - In North America, Q4 retail sales declined by 9%, while EMEA retail sales fell by 22% [23][24] - Retail sales in Latin America increased by 46%, driven by growth in Brazil and Mexico [24] - Dealer inventory at the end of Q4 was up approximately 50% from the end of Q4 2022, indicating improved product availability [24] Company Strategy and Development Direction - The company continues to focus on its hardwired strategy, emphasizing core products and markets, innovation, and customer experience [5][8] - The launch of new touring models is a key priority, with the Grand American Touring category being central to the brand's identity [12][13] - The company aims to balance wholesales and retails through cautious inventory management and strategic pricing adjustments [17][36] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by high interest rates affecting consumer discretionary purchases, but expressed optimism about the new product launches [5][16] - The company expects retail units to be flat to up 9% in 2024, with wholesale unit shipments projected to decline between 1% and 10% [36] - Management highlighted the importance of maintaining dealer profitability and improving dealer sentiment through new product launches [43][44] Other Important Information - The company plans to invest between $225 million to $250 million in capital expenditures for 2024, focusing on product development and manufacturing enhancements [39][40] - Share buybacks totaled 10.2 million shares at a value of $350 million in 2023, reflecting strong cash flow generation [35] Q&A Session Summary Question: Dealer sentiment and partnership opportunities - Management acknowledged the tough year for dealers due to high interest rates but noted improved dealer sentiment due to new product launches [42][43] Question: Mix expectations for 2024 - Management indicated a shift towards higher value products, with a focus on touring and trike shipments while managing inventory levels [47][49] Question: Current versus noncurrent product mix - Management confirmed appropriate inventory levels and emphasized the importance of supporting retail as new models are introduced [52][54] Question: Impact of promotions and discounts on retail - Management observed a positive retail increase in December, correlating with promotional activities, and emphasized the need for a balanced mix of products [59][60] Question: Guidance on retail demand and EPS - Management provided a broader guidance range for retail units in 2024, acknowledging the impact of interest rates and the importance of the North American market [66][68]