HOG earnings call summary

Prepared Highlights

• Q4 2025 consolidated revenue down 28% YoY, driven by HDMC revenue down 10% and HDFS revenue down 59% (CFO).
• Q4 2025 consolidated operating loss of $361M vs. loss of $193M in Q4 2024; HDMC operating loss $260M, HDFS operating loss $82M (CFO).
• Full-year 2025 consolidated revenue $4.5B, down 14% YoY; consolidated operating income $387M vs. $417M in 2024 (CFO).
• Full-year 2025 EPS $2.78 vs. $3.44 in 2024 (CFO).
• Global retail sales Q4: 25,287 motorcycles, down 1% YoY; North America up 5% (15,847 units), international down 10% (9,440 units) (CFO).
• Full-year 2025 global retail sales down 12% YoY; North America down 13%, EMEA down 11%, Asia Pacific down 15%, Latin America up 2% (CFO).
• Dealer inventory globally down 17% vs. year-end 2024, exceeding 10% target; North America down 16%, international down 20% (CEO, CFO).
• HDMC gross margin full-year 2025: 24.2% vs. 28% in 2024, down 380 bps due to tariffs, negative operating leverage, lower volumes (CFO).
• Full-year 2025 operating cash flow $569M vs. $1.064B in 2024 (CFO).
• 2025 tariff cost $67M full-year; 2026 forecast $75M–$105M in new/increased tariffs vs. 2024 baseline (CFO).
• HDFS transaction closed Q4 2025: $6B retail loan back book sale, forward flow agreements, 9.8% equity sale to KKR/PIMCO; Q4 liability management costs $73M (CFO).
• LiveWire Q4 operating loss $18M, in line with expectations; full-year 2025 electric motorcycle units up 61%, consolidated revenue up 9% (CFO).
• Share repurchases 2025 total $347M (13.1M shares, ~11% of shares outstanding); $200M ASR entered Q4, $160M delivered before 12/31 (CFO).

Official Guidance (2026)

• HDMC retail units: 130,000–135,000 (CFO)
• HDMC wholesale units: 130,000–135,000 (CFO)
• HDMC operating income: $10M profit to $40M loss (CFO)
• HDFS operating income: $45M–$60M (CFO)
• LiveWire operating loss: $70M–$80M (CFO)
• Cost savings: At least $150M annual run-rate savings impacting 2027+ (CEO)

Mgmt Quotes

• “We do not believe [Q4 results] reflect the full potential of this company.” (CEO)
• “Dealer health is not optional. It is a critical foundation for our long-term growth and earnings power.” (CEO)
• “We view 2026 as a transition year as we reset the business and finalize our new strategy.” (CEO)
• “We expect margins to be under pressure in the near term as production runs below wholesale, creating operating deleverage.” (CEO)
• “We believe that global dealer inventory levels are at appropriate total levels with some need to balance by model and family.” (CFO)

Prepared Metrics

Q&A Batch (1-5 of 7)

Q1 — Craig Kennison

• Topic: HDFS profitability trajectory and long-term run rate
• Key points:
  • 2026 HDFS operating income guided to $45–$60 million; prior expectation from HDFS transaction was ~$100 million (half of historical).
  • Management views long-term standardized run rate (reached in ~2.5–3 years) as approximately triple the 2026 midpoint.
  • Short-term headwinds: cautious volume outlook; Q4 dealer inventory fell more than expected, reducing wholesale assets and pressuring earnings.
  • To triple income, needs multiple years of rebuilding retail assets on balance sheet; wholesale levels are lower than envisioned due to tight inventory discipline.
• Mgmt stance: Neutral — acknowledges near-term income shortfall vs. prior expectation, but confident in eventual tripling of earnings over several years.

Q2 — Noah Zatzkin

• Topic: Wholesale shipment cadence in 2026 and dealer inventory comfort
• Key points:
  • Q1 2026 wholesale shipments down year-over-year; Q2 moderately higher to position dealers for season; Q3 slightly lower; Q4 materially higher (back-half weighted, especially Q4).
  • Inventory focus: supporting dealers on touring sell-down, pleased with progress on ‘25 model year touring; monitoring ‘26 model year launch enthusiasm.
  • One-for-one retail-to-wholesale dynamic implies shipment growth in 2026; management is “careful and considered” on dealer network inventory.
• Mgmt stance: Neutral cautious — explicitly states “hyperfocused on healthy inventory levels,” with measured shipment cadence to avoid overstocking.

Q3 — Robin Farley

• Topic: Flat global retail assumptions and LiveWire loss commitment
• Key points:
  • U.S. retail expects slight upside vs. 2025, driven by: new Limited model (strong sold orders), new trikes (improved suspension/handling), full year of Softails at adjusted price points.
  • Offsetting factors: careful CVO retail/wholesale restraint (positioned as pedestal product); Touring sell-down of MY25 bikes helps retail.
  • LiveWire: extended $75 million loan (originally $100 million); LiveWire is actioning other capital sources; no additional funding commitment beyond the extended loan.
  • Global retail outlook flat for 2026.
• Mgmt stance: Cautious on LiveWire (limiting further underwriting of losses); neutral on retail (flat globally, slight U.S. upside from new products).

Q4 — Tristan Thomas

• Topic: $150 million annual run-rate savings breakdown and cadence
• Key points:
  • $150 million savings apply to Motor Company and HDFS only; excludes LiveWire.
  • Savings expected to begin in the back half of 2026; no restructuring charge included in 2026 guidance.
  • Full annual run-rate of savings to be realized starting in 2027.
• Mgmt stance: Bullish on cost initiatives — clear timeline for savings realization, no upfront charge booked.

Q5 — James Hardiman

• Topic: Bridging wholesale growth (~4%–8%) to near-flat HDMC operating income
• Key points:
  • Motor Company operating income midpoint effectively flat year-over-year despite wholesale growth.
  • Headwinds: full-year tariff exposure adds ~$25 million headwind; final year of rebalancing production vs. wholesale creates deleverage; supply chain impacts.
  • Tailwinds: one-to-one retail-to-wholesale relationship (offsetting positive); P&A and A&L non-motorcycle contributions.
  • Touring inventory expected to be down (undershipped), which may pressure ASP/mix.
• Mgmt stance: Neutral — near-term profit flat due to tariffs and restructuring costs, but improved setup for out-year performance.

Q&A Batch (6-7 of 7)

Q6 — Brandon Rollé

• Topic: 新旧摩托车价格差及促销对价差的影响
• Key points:
  • 管理层在2025年计提了费用，以清理 touring 车型库存，并推出市场促销计划，缩小新车与二手车之间的价差。
  • 二手车价值（拍卖和零售端）已出现稳定甚至改善，同时促销活动提升了消费者的价值感。
  • 公司近年来放弃的部分车型在二手车市场跳涨，这为产品开发提供了参考。
• Mgmt stance: 中性偏正面：促销主动缩窄价差，二手车价值回升带来积极信号。

Q7 — Jaime Katz

• Topic: 2026年之后摩托车业务经营利润率目标及杠杆率
• Key points:
  • 管理层认为当前业绩“未反映公司全部潜力”，存在很大上升空间，但具体目标将在5月投资者会议公布。
  • 2026年无明确杠杆率目标，相关资本配置策略将在5月电话会统一说明。
  • 已确认将偿还一笔7亿欧元票据（影响杠杆指标）。
• Mgmt stance: 谨慎乐观：当前利润率非最终水平，但具体数字延迟至5月披露；债务偿还已明确。