LiveWire (LVWR) Q3 Earnings call transcript Oct 24, 2024

The Harley-Davidson 2024 third quarter earnings call provided a comprehensive overview of the company's financial performance and strategic direction, highlighting both challenges and opportunities in the global motorcycle market. Despite a difficult global market environment, Harley-Davidson showcased resilience and optimism, with key executives outlining their strategies for navigating macroeconomic uncertainties and positioning the company for future growth.

Macroeconomic Headwinds and Market Performance

The call began with an acknowledgement of the challenging macroeconomic conditions affecting the company's performance. Retail sales of new motorcycles declined by 13% in Q3, with the North American market posting a 10% decline compared to 18% across international regions. However, Harley-Davidson managed to outperform the overall motorcycle industry in the U.S., with retail sales down 1% through the end of Q3. The company attributed this to its focus on higher income customers and the successful launch of its new Touring lineup, which gained more than 4 percentage points of market share.

Strategic Initiatives and Future Outlook

Looking ahead, Harley-Davidson remains committed to reducing inventory levels and supporting dealer health, both in North America and international markets. This strategic focus, coupled with the launch of a new model year lineup in 2025, is expected to drive profitable growth and improved profitability across the company. Despite the challenges faced in Q3, management expressed confidence in the company's ability to bounce back, emphasizing the importance of maintaining a best-in-class product and dealer network.

Electric Vehicle Venture: LiveWire

A significant portion of the call was dedicated to discussing the company's electric vehicle venture, LiveWire. While retail outpaced wholesale for a third consecutive quarter, the company revised its full year guidance to 600 to 1,000 motorcycle units, with operating loss remaining unchanged. Despite the challenges, LiveWire continues to invest in new motorcycle models and cost efficiency measures, with plans to announce a new product segment at EICMA in November.

Financial Performance and Outlook

The call also provided insights into Harley-Davidson's financial performance, with revenue down 26% in Q3 and operating income down 49% compared to the prior year. The company highlighted the importance of cost control and cost productivity gains, aiming to achieve a $400 million improvement by 2025. Despite the challenges, management remains optimistic about the company's future, citing the launch of new product offerings and a strong marketing push as key drivers for growth.

In conclusion, the Harley-Davidson 2024 third quarter earnings call painted a picture of a company navigating challenging conditions, while maintaining a forward-looking perspective. With a focus on cost control, strategic product launches, and a commitment to supporting dealers, Harley-Davidson is positioning itself for a solid 2025 and beyond. As the motorcycle industry continues to evolve, Harley-Davidson's ability to adapt and innovate will be crucial in shaping its future success.