Harley-Davidson's Q2 2025 Earnings: Unraveling Contradictions in Retail Sales, Inventory, and EV Strategy
Generated by AI AgentAinvest Earnings Call Digest
Wednesday, Jul 30, 2025 11:33 pm ET1min read
HOG--
Aime Summary
Aime SummaryRetail sales expectations, inventory reduction and retail sales expectations, HDFS transaction valuation, product launch strategy, and LiveWire's EV market strategy and commitment are the key contradictions discussed in Harley-Davidson's latest 2025Q2 earnings call.
HDFS Transaction and Strategic Benefits:
- Harley-DavidsonHOG-- entered into strategic partnerships with KKRKKR-- and PIMCO, which acquired 4.9% equity stake in HDFS, with post-transaction book value valued at approximately $500 million.
- The transaction is expected to generate $1.25 billion for HDI and boost HDFS earnings by $275 million to $300 million in 2025.
- This transaction reflects the significant value of HDFS and provides long-term strategic and financial benefits, including flexibility in funding and potential for HDFS' ROE to rise to the high 20s.
Q2 Financial Performance and Challenges:
- Consolidated revenue for Q2 was down 19%, with HDMC's revenue decreasing by 23% and HDFS by 2%.
- Global motorcycle retail sales were down 15% year-over-year, with the largest declines in Asia Pacific and Europe.
- The decline was primarily due to planned reduction in motorcycle shipments and soft demand, exacerbated by high interest rates and macroeconomic uncertainty.
Product and Strategic Initiatives:
- Harley-Davidson plans to introduce new entry-level products, including a small displacement motorcycle priced below $6,000, set to launch in the first half of 2026.
- This new motorcycle aims to drive profitable growth and open new segments for the company in key markets.
- The launch is anticipated to enhance market presence and attract new customers amid ongoing industry challenges.
LiveWire and Electric Vehicle Strategy:
- LiveWireLVWR-- delivered a 34% improvement in operating loss for Q2 compared to Q2 2024 and reduced cash burn by 36% for the first half of 2025.
- The company is pivoting its product portfolio to align with evolving consumer expectations, focusing on lightweight, off-road, and urban-friendly mobility solutions.
- These strategic shifts are aimed at leveraging EV adoption trends and expanding into new segments.
HDFS Transaction and Strategic Benefits:
- Harley-DavidsonHOG-- entered into strategic partnerships with KKRKKR-- and PIMCO, which acquired 4.9% equity stake in HDFS, with post-transaction book value valued at approximately $500 million.
- The transaction is expected to generate $1.25 billion for HDI and boost HDFS earnings by $275 million to $300 million in 2025.
- This transaction reflects the significant value of HDFS and provides long-term strategic and financial benefits, including flexibility in funding and potential for HDFS' ROE to rise to the high 20s.
Q2 Financial Performance and Challenges:
- Consolidated revenue for Q2 was down 19%, with HDMC's revenue decreasing by 23% and HDFS by 2%.
- Global motorcycle retail sales were down 15% year-over-year, with the largest declines in Asia Pacific and Europe.
- The decline was primarily due to planned reduction in motorcycle shipments and soft demand, exacerbated by high interest rates and macroeconomic uncertainty.
Product and Strategic Initiatives:
- Harley-Davidson plans to introduce new entry-level products, including a small displacement motorcycle priced below $6,000, set to launch in the first half of 2026.
- This new motorcycle aims to drive profitable growth and open new segments for the company in key markets.
- The launch is anticipated to enhance market presence and attract new customers amid ongoing industry challenges.
LiveWire and Electric Vehicle Strategy:
- LiveWireLVWR-- delivered a 34% improvement in operating loss for Q2 compared to Q2 2024 and reduced cash burn by 36% for the first half of 2025.
- The company is pivoting its product portfolio to align with evolving consumer expectations, focusing on lightweight, off-road, and urban-friendly mobility solutions.
- These strategic shifts are aimed at leveraging EV adoption trends and expanding into new segments.
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