Harley-Davidson 2025 Q1 Earnings Misses Targets as Net Income Drops 43.7%

Harley-Davidson Inc. (HOG) announced its fiscal 2025 Q1 earnings on May 1, 2025, revealing a significant decline in both sales and net income. Despite surpassing analyst expectations with earnings per share (EPS) of $1.07, the results were overshadowed by a 23% drop in overall revenue to $1.33 billion, compared to the same quarter last year. The company has also withdrawn its full-year financial guidance, citing macroeconomic uncertainties and tariff challenges. These factors indicate a cautious approach towards future financial performance.

Revenue
Harley-Davidson reported a total revenue of $1.33 billion for Q1 2025, reflecting a 23.1% decrease from $1.73 billion in the same quarter of 2024. The Harley-Davidson Motor Company (HDMC) segment generated $1.08 billion, with motorcycle sales accounting for $863.86 million. Revenue from parts and accessories amounted to $143.43 million, while apparel sales were $57.32 million. Licensing contributed $3.06 million, and the 'Other' category added $13.83 million. The LiveWire segment, focused on electric motorcycles, reported revenue of $2.74 million. Harley-Davidson Financial Services (HDFS) recorded revenue of $244.96 million.

Earnings/Net Income
Harley-Davidson's EPS decreased by 38.2% to $1.07 in Q1 2025 from $1.73 in Q1 2024, with net income dropping 43.7% to $130.80 million from $232.23 million in the prior year. The decline in net income indicates a challenging quarter for the company amid economic headwinds.

Price Action
The stock price of Harley-Davidson has edged down 1.75% during the latest trading day, has edged down 2.74% during the most recent full trading week, and has tumbled 8.75% month-to-date.

Post-Earnings Price Action Review
Historically, Harley-Davidson's earnings releases have shown a tendency to positively affect the stock price in the short term. The 3-Day win rate for revenue, net income, and EPS stands at 55%, indicating that the stock price often rises within three days following an earnings release. However, the 10-Day win rate drops to 45% for all three metrics, suggesting mixed reactions in the intermediate term. The 30-Day win rate returns to 55%, implying that the market may eventually recognize the positive aspects of the earnings results over a longer period. Despite this, the maximum return over 30 days is capped at 3.88%, highlighting the modest post-earnings momentum. Overall, while revenue and net income releases tend to elicit a more immediate positive response than EPS, the overall impact on Harley-Davidson's stock price remains moderate.

CEO Commentary
“Our first quarter results were ahead of our expectations in many areas, while retail sales in the U.S. came in softer than anticipated,” said Jochen Zeitz, Chairman, President and CEO, Harley-Davidson. The Company is focused on navigating a challenging economic and tariff environment through cost productivity measures, supply chain mitigation, and tight operating expense control. Zeitz emphasized the commitment to driving retail sales with increased marketing initiatives as the riding season approaches, reflecting a cautious optimism despite the decline in global motorcycle retail sales and the ongoing macroeconomic uncertainties.

Guidance
Due to the uncertain global tariff situation and macroeconomic conditions, the Company is withdrawing its full year 2025 financial outlook. This decision reflects the current challenges in the market, including softer demand and overall consumer uncertainty, indicating a cautious approach toward future expectations and financial performance.

Additional News
In recent weeks, Harley-Davidson has been under pressure from external investors to make changes at the board level. A major investor, H Partners, has called for the reappointment of three board positions to ensure the company remains sustainable amidst ongoing challenges. Additionally, the company announced a strategic realignment under the "The Hardwire" strategy, focusing on profitable segments like touring, cruiser, and trike. Furthermore, Jochen Zeitz, the current CEO, has announced his resignation, prompting the search for a successor. This transition comes as Harley-Davidson aims to reinforce its dealer network and strengthen its market presence amidst economic uncertainties.