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

Harley-Davidson (HOG) reported its fiscal 2025 Q1 earnings on May 06th, 2025. Harley-Davidson's earnings per share of $1.07 exceeded analyst expectations of 79 cents, despite a year-over-year decline of 38.2%. The company reported a net income decrease of 43.7% to $130.80 million. The withdrawal of guidance due to macroeconomic uncertainties reflects cautious optimism. Harley-Davidson expects revenue and diluted EPS to be flat or down by 5% in 2025, indicating challenges ahead amid tariff concerns.

Revenue

Harley-Davidson's total revenue for Q1 2025 diminished by 23.1% to $1.33 billion, compared to $1.73 billion in the same quarter the previous year. The Harley-Davidson Motor Company contributed $1.08 billion, with motorcycle sales generating $863.86 million. Parts and accessories added $143.43 million, while apparel sales amassed $57.32 million. Licensing brought in $3.06 million, and other sources accounted for $13.83 million. LiveWire revenue totaled $2.74 million, and Harley-Davidson Financial Services generated $244.96 million in revenue.

Earnings/Net Income

Harley-Davidson's EPS declined significantly by 38.2% to $1.07 in Q1 2025 from $1.73 in Q1 2024. Concurrently, net income decreased by 43.7% to $130.80 million from $232.23 million a year ago. The sustained profitability over two decades highlights the company's operational resilience, though the earnings figures suggest a challenging period.

Price Action

The stock price of Harley-Davidson has edged up 0.78% during the latest trading day, has edged up 0.65% during the most recent full trading week, and has edged up 1.30% month-to-date.

Post-Earnings Price Action Review

The strategy of purchasing Harley-Davidson (HOG) shares post-revenue drop quarter-over-quarter and holding for 30 days has yielded a 21.73% return over the past five years. This performance pales compared to the benchmark return of 83.12%, reflecting a lower compound annual growth rate (CAGR) of 4.06%. The strategy experienced a maximum drawdown of -18.66% and maintained a Sharpe ratio of 0.27, indicating moderate risk and returns. Investors following this approach should consider the historical volatility and potential for substantial losses alongside the modest gains achieved.

CEO Commentary

Jochen Zeitz, Chairman, President and CEO of Harley-Davidson, emphasized that while the first quarter results exceeded expectations in several areas, retail sales in the U.S. were softer than anticipated. He noted the company's commitment to navigating the current economic and tariff challenges through diligent cost productivity measures and inventory reductions. Zeitz highlighted plans to drive retail sales through increased marketing initiatives as the riding season approaches, reflecting a cautious but proactive approach in response to prevailing macroeconomic uncertainties.

Guidance

Harley-Davidson has withdrawn its full-year 2025 guidance due to the uncertain global tariff situation and macroeconomic conditions. The company anticipates revenue to be flat to down 5% for the year, with diluted EPS expected to also be flat to down 5%. Capital investments are projected in the range of $225 to $250 million, alongside an operating income margin for Harley-Davidson Motor Company targeted at 7.0% to 8.0%.

Additional News

In recent weeks, Harley-Davidson has been actively managing its leadership transition as Jochen Zeitz plans to retire. The board's ongoing CEO search process is part of its succession planning responsibilities. Additionally, Harley-Davidson has urged shareholders to support its board nominees amid disputes with H Partners, emphasizing the importance of the current directors in choosing the next CEO and safeguarding shareholder value. The company also announced a share buyback, repurchasing $87 million worth of shares in the first quarter, demonstrating its commitment to returning value to shareholders amid market uncertainties.