Harley-Davidson Inc
NYSE:HOG
Harley-Davidson Inc
Harley-Davidson Inc., the iconic American motorcycle manufacturer, has built a legacy of freedom, rebellion, and the open road, a narrative deeply embedded within its brand. Born in a small wood shed in Milwaukee in 1903, Harley-Davidson rose to prominence by producing motorcycles that became synonymous with American culture itself. The company's motorcycles are renowned for their heavyweight design, thunderous engines, and a distinctive aesthetic appeal that attracts a cult-like following. Central to Harley-Davidson’s narrative is its ability to sell not just motorcycles, but a lifestyle. Through Harley Owners Group (HOG), leather jackets, branded accessories, and events like Harley-Davidson rallies, the company has cultivated a community of enthusiasts who contribute to and sustain the brand's mystique and loyalty.
At its core, Harley-Davidson operates through two primary segments: Motorcycles and Related Products, and Financial Services. The Motorcycles segment encompasses the design, manufacturing, and sale of heavyweight motorcycles, a lucrative business that taps into both the premium and touring markets. Meanwhile, the Financial Services segment offers wholesale and retail financing services, which provide dealers and riders with flexible financial plans, thereby driving sales. Additionally, Harley-Davidson has dipped into electric transportation with its LiveWire line, seeking to expand its market and embrace environmental consciousness. These synergistic operations help Harley-Davidson maintain its status as a global leader in the motorcycle industry, while its strong brand equity ensures robust revenue streams from a dedicated, loyal customer base.
Harley-Davidson Inc., the iconic American motorcycle manufacturer, has built a legacy of freedom, rebellion, and the open road, a narrative deeply embedded within its brand. Born in a small wood shed in Milwaukee in 1903, Harley-Davidson rose to prominence by producing motorcycles that became synonymous with American culture itself. The company's motorcycles are renowned for their heavyweight design, thunderous engines, and a distinctive aesthetic appeal that attracts a cult-like following. Central to Harley-Davidson’s narrative is its ability to sell not just motorcycles, but a lifestyle. Through Harley Owners Group (HOG), leather jackets, branded accessories, and events like Harley-Davidson rallies, the company has cultivated a community of enthusiasts who contribute to and sustain the brand's mystique and loyalty.
At its core, Harley-Davidson operates through two primary segments: Motorcycles and Related Products, and Financial Services. The Motorcycles segment encompasses the design, manufacturing, and sale of heavyweight motorcycles, a lucrative business that taps into both the premium and touring markets. Meanwhile, the Financial Services segment offers wholesale and retail financing services, which provide dealers and riders with flexible financial plans, thereby driving sales. Additionally, Harley-Davidson has dipped into electric transportation with its LiveWire line, seeking to expand its market and embrace environmental consciousness. These synergistic operations help Harley-Davidson maintain its status as a global leader in the motorcycle industry, while its strong brand equity ensures robust revenue streams from a dedicated, loyal customer base.
Challenging Year: 2025 was a difficult year for Harley-Davidson, with revenue and margins under pressure due to macro headwinds and internal inventory issues.
Inventory Actions: The company took intentional steps to reduce dealer inventory, particularly touring models, leading to a 17% global dealer inventory reduction, exceeding their 10% target.
Earnings & Revenue: Q4 consolidated revenue fell 28% and EPS swung to a loss of $2.44, while full-year revenue dropped 14% and EPS was $2.78, both down from the previous year.
Margin Pressure: Margins remain under pressure due to lower production, higher tariffs, and promotional activity; 2026 is expected to be a transition year with continued margin headwinds.
Cost Savings: Management announced at least $150 million in annual cost savings starting in 2027, excluding LiveWire.
HDFS Shift: The HDFS business has transitioned to a capital-light model after a major transaction with KKR & PIMCO, with near-term income expected to be lower but a path to growth over several years.
2026 Guidance: Harley-Davidson expects 130,000-135,000 retail and wholesale units, HDMC operating income between $10 million and a $40 million loss, and continued focus on inventory discipline.
