Harley-Davidson Reports Significant Decline in Q2 2025 Financial Performance

Harley-Davidson, Inc. reported a significant decline in financial performance for the second quarter of 2025, with net income attributable to the company falling to $107.6 million, or $0.88 per diluted share, compared to $218.3 million, or $1.63 per diluted share, in the same period last year. The company's total revenue for the quarter was $1.31 billion, down from $1.62 billion in the prior year, reflecting a 19.2% decrease. The decline was primarily driven by a planned reduction in motorcycle shipments and weaker retail demand, particularly in North America, where retail sales dropped by 17.0%. The overall operating income for the quarter was $112.4 million, a decrease of 53.4% from $241.1 million in the previous year.

In terms of operational metrics, Harley-Davidson's worldwide motorcycle shipments decreased by 27.8% year-over-year, totaling 35,837 units in the second quarter. The decline was attributed to a combination of lower shipments and a shift in consumer sentiment due to economic uncertainties and high interest rates. The company's retail sales of new motorcycles also fell by 15.5% compared to the same quarter in 2024, with notable declines in the U.S. and Asia-Pacific regions. The company’s market share in the U.S. for new motorcycles over 601cc also decreased, reflecting the challenging market conditions.

Strategically, Harley-Davidson is undergoing significant changes, including a transaction involving its financial services segment, Harley-Davidson Financial Services (HDFS). The company plans to sell a majority of its existing retail finance receivables, which is expected to result in a derecognition of over $5 billion in finance receivables and related asset-backed securitization debt. This transaction is anticipated to enhance HDFS's return on equity and provide liquidity for share repurchases and debt repayment. Additionally, the company is focusing on new product launches, including a small displacement motorcycle priced below $6,000, and plans to shift the timing of its annual model year launch to create more retail opportunities.

Looking ahead, Harley-Davidson has revised its expectations for the HDFS segment, projecting operating income of approximately $525 million to $550 million for 2025, bolstered by the anticipated benefits from the HDFS transaction. However, the company has withdrawn its previous guidance for motorcycle retail unit sales and other financial metrics due to ongoing economic uncertainties, including the impact of tariffs and high interest rates. The company remains committed to its strategic initiatives aimed at reducing costs and enhancing productivity, with a target of achieving $100 million in annual savings through 2026.