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HARLEY-DAVIDSON, INC. (HOG)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 beat on revenue and EPS vs S&P Global consensus as mix/pricing and tight cost control offset planned shipment cuts: revenue $1.33B vs $1.11B est., EPS $1.07 vs $0.77 est. Consolidated operating income was $160M (12.0% margin), with HDMC operating margin 10.8% and HDFS operating income up 19% YoY . EPS/Revenue estimates marked with asterisks and sourced from S&P Global below.
  • Management withdrew the FY25 outlook given tariff and macro uncertainty; shares were supported by catalysts including guidance withdrawal’s reset, tariff mitigation plans, and a potential value-unlocking HDFS transaction under evaluation .
  • U.S. retail was softer as expected (NA retail -24%), APAC weak (China/Japan), but EMEA was resilient (-2%); dealer inventory down 19% YoY as wholesale shipments were intentionally reduced 33% to protect channel health .
  • LiveWire loss trajectory improved (expected FY25 operating loss now ~$59M; cash burn ~$49M) and capex was trimmed to $200–$225M for 2025; HOG repurchased $87M of stock in Q1 and ended with $1.9B cash .

What Went Well and What Went Wrong

  • What Went Well
    • Mix, pricing, and cost discipline drove a revenue/EPS beat despite lower units. CEO: “bottom line performance was better than expected driven by strong product mix, tight cost control in logistics, supply chain and in our operating expenses” . HDMC operating margin 10.8% with opex -$24M YoY .
    • HDFS delivered operating income +19% YoY on lower loss provisions and opex; receivables down 6% YoY to $7.4B; credit loss ratio 3.8% with reserve at 5.7% (flat vs Q4) .
    • Channel health improved: shipments -33%, dealer inventory -19% YoY (U.S. -23%); management committed to ~10% year-end dealer inventory reduction .
  • What Went Wrong
    • Retail demand softened: global retail -21% YoY; North America -24% (interest rates/consumer confidence), APAC -28% (China/Japan), EMEA -2% .
    • HDMC revenue -27% YoY on planned shipment cuts; HDMC gross margin -210 bps to 29.1% on negative operating leverage; segment operating income -51% YoY .
    • FY25 guidance withdrawn amid fluid tariffs; tariff headwind estimated at $130–$175M in 2025 (Q1 direct hit ~$9M) with heavy China-related exposure despite only ~<6% sourcing by spend .

Financial Results

Key consolidated and segment metrics vs prior quarters

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Millions)$1,151 $688 $1,329
Diluted EPS ($)$0.91 ($0.93) $1.07
Operating Income ($USD Millions)$106 ($193) $160
Consolidated Operating Margin %9.2% NM 12.0%
HDMC Gross Margin %30.1% -0.8% 29.1%
HDMC Operating Margin %6.3% NM 10.8%
HDFS Revenue ($USD Millions)$269 $257 $245
HDFS Operating Income ($USD Millions)$77 $46 $64

Actuals vs S&P Global consensus

MetricQ3 2024 EstimateQ3 2024 ActualQ4 2024 EstimateQ4 2024 ActualQ1 2025 EstimateQ1 2025 Actual
Revenue ($USD Millions)976.4*1,150.7 469.6*687.6 1,110.8*1,329.2
EPS (Primary, $)0.81*0.91 -0.65*-0.93 0.77*1.07
EBITDA ($USD Millions)161.0*160.8 [functions.GetEstimates]-69.5*-138.1 [functions.GetEstimates]155.2*217.6 [functions.GetEstimates]

Values with asterisks are S&P Global consensus/estimates and are provided without document citations. Values retrieved from S&P Global.

Segment and KPI detail (Q1 YoY unless noted)

HDMC ($USD Millions unless noted)Q1 2024Q1 2025YoY
Revenue$1,476 $1,082 -27%
Motorcycles$1,222 $864 -29%
Parts & Accessories$166 $143 -14%
Apparel$64 $57 -11%
Licensing$9 $3 -66%
Other$15 $14 -10%
Motorcycle Shipments (000s)57.7 38.6 -33%
HDMC Operating Income$238 $116 -51%
HDFSQ1 2024Q1 2025YoY
Revenue ($USD Millions)$249 $245 -2%
Operating Income ($USD Millions)$54 $64 +19%
Ending Financing Receivables ($USD Billions)$7.9 $7.4 -6%
LiveWireQ1 2024Q1 2025YoY
Units (motorcycles)117 33 -72%
Revenue ($USD Millions)$5 $3 -42%
Operating Loss ($USD Millions)($29) ($20) +32% (less loss)

Retail KPIs (units, thousands)

RegionQ1 2024Q1 2025YoY
North America27.5 20.9 -24%
EMEA5.3 5.2 -2%
APAC6.0 4.4 -28%
Latin America0.6 0.6 -6%
Worldwide39.4 31.0 -21%

Cash flow and capital

  • Cash from operations $142M; cash and equivalents $1.9B; share repurchases $87M; dividends paid $23M in Q1 (cash dividend per share $0.18) .

Guidance Changes

MetricPeriodPrevious Guidance (2/5/25)Current (Q1)Change
HDMC RevenueFY 2025Flat to down 5% Withdrawn Withdrawn
HDMC Operating Income MarginFY 20257.0%–8.0% Withdrawn Withdrawn
HDFS Operating IncomeFY 2025Down 10%–15% Withdrawn (no segment reiteration) Withdrawn
LiveWire UnitsFY 20251,000–1,500 Not reiterated NA
LiveWire Operating LossFY 2025($70M)–($80M) ~($59M) (cash burn ~$49M) Improved (smaller loss)
EPS (HOG)FY 2025Flat to down 5% Withdrawn Withdrawn
Capital Investments (Capex)FY 2025$225M–$250M $200M–$225M Lowered
DividendOngoing$0.18 per share quarterly (Q1 cash DPS $0.18) $0.18 per share declared for Q2 2025 Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2: Q3’24; Q-1: Q4’24)Current Period (Q1’25)Trend
Tariffs/TradeQ3: lowered outlook; international weaker . Q4: EU tariff pause to 3/31/25 and negotiations flagged .FY25 guidance withdrawn; 2025 tariff headwind estimated $130–$175M (Q1 direct ~$9M); heavy China-duty exposure; mitigation underway .Elevated risk, active mitigation
Demand/MacroQ3 global retail -13% YoY . Q4: cyclical headwinds, high rates .NA retail -24%; sequential improvement Feb→Mar→Apr; EMEA resilient; APAC weak .Stabilizing sequentially, still soft
HDFS Strategic OptionsNot explicit earlier.Company evaluating investment/partnership to surface premium to book while retaining strategic benefits .New option under review
Product RoadmapQ3 touring launch reception strong . Q4 Street/Road Glide success .Confirmed entry-level/smaller displacement models and iconic classic from 2026; shifting model-year launches to fall .Broadening lineup; cadence shift
LiveWireQ3 loss in-line . Q4 FY loss $110M .FY25 loss/cash burn guidance improved to $59M/$49M; cost-down focus; external capital optionality .Loss reduction focus
Channel/InventoryQ3 shipments -39% to align inventory . Q4 dealer inventory -4% YoY .Q1 shipments -33%; dealer inventory -19% YoY (U.S. -23%); target ~10% year-end reduction .Proactive channel management

Management Commentary

  • “Our bottom line performance was better than expected driven by strong product mix, tight cost control in logistics, supply chain and in our operating expenses” — Jochen Zeitz, CEO .
  • “We are evaluating an investment into HDFS... to demonstrate the class‑leading returns of HDFS... establish a value‑enhancing long‑term strategic partnership... and secure long‑term funding optionality” — Jonathan Root, CFO/President, Commercial .
  • “We therefore are withdrawing our previous 2025 guidance until there is more clarity over economy and tariff landscape... estimate our 2025 impact from new tariffs to be in the range of $130 million to $175 million” .
  • “We are planning to introduce new entry‑level products in smaller displacements as well as the introduction of an iconic classic... starting next year” .
  • “April has... improved versus March... especially in the U.S., our most important market” .

Q&A Highlights

  • HDFS transaction framework: Management clarified no imminent sale; exploring structures to surface value at a premium to book while retaining strategic benefits and funding optionality .
  • Tariff exposure and mitigation: 2025 headwind $130–$175M, with largest component China-related duties; actions include shipment timing, supply chain diversification, pricing discipline, and multi-administration engagement; Q1 direct impact ~$9M .
  • Demand cadence and promotions: Sequential retail improvement through April; competitors discounting ’24 (some ’25) aggressively; HOG keeping promotions targeted; MDF shifted to Q2+ to align with riding season .
  • Model-year timing shift: Moving launches to fall is a multi-year operational lift intended to extend selling season and support dealers; not to load dealers with inventory .
  • LiveWire path: Operating loss/cash burn guided down with continued cost reductions; evaluating options including external capital; no further HOG capital beyond existing $100M LOC .

Estimates Context

  • Q1 2025 delivered significant beats vs S&P Global consensus: Revenue $1.33B vs $1.11B est., EPS $1.07 vs $0.77 est., EBITDA $218M vs $155M est. The beat was driven by favorable mix and pricing, lower opex, and HDFS outperformance despite volume pressure from planned shipment reductions . Estimates marked with asterisks are from S&P Global (see table above).
  • Prior quarters also exceeded revenue estimates despite industry headwinds (Q3 2024 revenue $1.15B vs $0.98B est.) while Q4 missed EPS more than expected given heavy de-stocking and negative operating leverage . Estimates marked with asterisks are from S&P Global.

Values with asterisks are S&P Global consensus/estimates and are provided without document citations. Values retrieved from S&P Global.

Key Takeaways for Investors

  • Q1 quality beat amid planned volume reductions shows underlying earnings power from mix/pricing and cost controls; HDFS strength is an important buffer .
  • The narrative shifts to tariff clarity and HDFS strategic evaluation; either could be catalysts for multiple and/or estimate revisions over the next 1–2 quarters .
  • Guidance reset de-risks the near-term setup; management remains committed to dealer inventory discipline (~10% year-end reduction) and targeted marketing into peak season .
  • Demand is soft but improving sequentially into April; EMEA resilient, APAC still weak; rate cuts and macro stabilization would be upside levers for high-ticket discretionary .
  • LiveWire loss trajectory improving with cost downs; de-risked cash burn and optionality around external capital reduce potential drag on consolidated results .
  • Capex cut to $200–$225M provides incremental FCF support alongside continued buybacks and steady dividend ($0.18/share) .
  • Watch list: tariff developments (especially China inputs), MDF efficacy on retail, HDFS credit trends, and progress on entry-level products/model-year cadence shift .

Other Relevant Q1 2025 Press Releases and Context

  • CEO succession: Board confirmed ongoing CEO search; Zeitz to remain until successor appointed .
  • Dividend: Board declared $0.18 per share for Q2 2025, following $0.18 paid in Q1 .
  • Shareholder/activism backdrop: Multiple communications around proxy season and governance through April–May; company reiterated focus on execution and capital allocation (context for potential stock volatility) .