Harley-Davidson’s first quarter was marked by a significant drop in global motorcycle sales and revenue, but better-than-expected profitability, prompting a positive market response. Management attributed the sales decline to historically low consumer confidence in the U.S. and macroeconomic uncertainty, with CEO Jochen Zeitz noting, “Global retail sales were down 21% in Q1 and down 24% in North America, softer than we expected primarily in the US market.” A delay in the model-year 2025 campaign and a strategic reduction in dealer inventories were also central themes, as the company worked to maintain healthier channel inventory levels amid softer demand.
Is now the time to buy HOG? Find out in our full research report (it’s free).
Harley-Davidson (HOG) Q1 CY2025 Highlights:
- Revenue: $1.33 billion vs analyst estimates of $1.35 billion (23.1% year-on-year decline, 1.2% miss)
- Adjusted EBITDA: $176.9 million vs analyst estimates of $155.2 million (13.3% margin, 14% beat)
- Operating Margin: 12.1%, down from 15.2% in the same quarter last year
- Motorcycles Sold: 38,601, down 19,071 year on year
- Market Capitalization: $2.82 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Harley-Davidson’s Q1 Earnings Call
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Craig Kennison (Baird) asked about the rationale and potential structure for a strategic partnership or investment in Harley-Davidson Financial Services (HDFS). CFO and President of Commercial Jonathan Root stated the process is early and aims to demonstrate HDFS’s premium valuation while maintaining long-term strategic benefits.
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Joseph Altobello (Raymond James) questioned if HDFS’s potential transaction is being driven by a desire for better market valuation rather than operational separation. Root confirmed the main goal is to unlock value while maintaining involvement in HDFS.
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James Hardiman (Citi) pressed for details on the sources and mitigation plans for tariff exposure, particularly related to China, Mexico, and Europe. CEO Jochen Zeitz explained that China’s high duties are the largest factor and outlined ongoing supply chain relocation efforts.
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Robin Farley (UBS) asked whether HDFS is truly up for sale and how Harley-Davidson is approaching pricing and promotions amid a soft retail environment. Zeitz clarified there are no plans to sell HDFS outright, while Root discussed maintaining pricing discipline despite competitive discounting.
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Alex Perry (Bank of America) sought details on the decision to reintroduce entry-level bikes and the impact of shifting model-year launch timing. Zeitz and Root described the new entry-level models as both competitive and profitable, while shifting product launches is expected to better match customer and dealer patterns.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be closely watching (1) how Harley-Davidson manages through ongoing tariff negotiations and supply chain adjustments, (2) the retail response to new entry-level product launches and the effectiveness of shifting model-year launches to the fall, and (3) the company’s ability to sustain margin improvements while controlling dealer inventories. Developments around LiveWire’s restructuring and any updates on HDFS’s strategic direction will also serve as key signposts.
Harley-Davidson currently trades at $23.25, up from $22.39 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free).
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