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    HOG
    Earnings call· Jun 2026(Q2 FY26)

    HARLEY-DAVIDSON, INC. HOG

    Jul 23, 2026 Source

    Executive summary

    Harley-Davidson Q2 FY26 — Strong North America Retail and Raised Full-Year Guidance

    Harley-Davidson reported early progress on its "Back to the Bricks" strategy in Q2 FY26, with North America retail sales up 3% and significant improvements in dealer inventory health. The company raised its full-year operating income guidance for both HDMC and HDFS, reflecting stabilization and execution gains. While Europe remains a challenging market and supplier issues impacted margins, management is focused on product portfolio adjustments and cost savings initiatives.

    Highlights

    5

    • North America retail sales were up 3% year-over-year, marking the third consecutive quarter of growth.

    • Global dealer inventory was down 17% year-over-year, with 85% of North America inventory being current model year 2026 product.

    • Domestic dealer profitability is expected to double in 2026.

    • HDMC operating income guidance for FY26 was raised to $10 million-$50 million, up from a previous range of positive $10 million to a loss of $40 million.

    • HDFS operating income guidance for FY26 was raised to $55 million-$70 million, up from a previous range of $45 million-$60 million.

    Concerns

    4

    • Europe remains a challenging market, with Q2 retail sales down 9% and market share declining from 4% to 3% year-over-year.

    • Domestic supplier challenges impacted margins in 2026, though the team managed through them effectively.

    • Tariff uncertainty remains an ongoing factor, with an expected cost of $75 million-$90 million for FY26.

    • Consolidated revenue was down 6% year-over-year, primarily due to the HDFS model transition.

    Guidance & targets

    13
    CategoryTargetConfidence
    HDMC Retail Units
    133,500 to 138,500 units
    high materiality
    High
    HDMC Wholesale Units
    133,500 to 138,500 units
    high materiality
    High
    HDMC Operating Income
    $10 million to $50 million
    high materiality
    High
    HDFS Operating Income
    $55 million to $70 million
    high materiality
    High
    LiveWire Operating Loss
    $70 million to $80 million
    medium materiality
    High
    Fixed Cost Savings
    $150 million
    high materiality
    High
    HDMC EBITDA Target
    $350 million plus
    high materiality
    High
    Domestic Dealer Profitability
    double
    high materiality
    High
    Q3 FY26 Wholesale Shipments
    similar number of units as Q3 FY25
    medium materiality
    High
    Q4 FY26 Wholesale Shipments
    more motorcycle units
    medium materiality
    High
    Model Year 2027 Motorcycle Shipments
    greater proportion in Q4 FY26
    medium materiality
    High
    HDMC Production Units vs. Wholesale Units
    lower than wholesale units shipped
    medium materiality
    High
    HDMC Operating Leverage and Operating Margin
    deleverage impact
    medium materiality
    High

    Segment performance

    8
    SegmentRevenueYoYQoQMargin
    North America (Retail)
    Retail sales driven by continued strength in redesigned Trike models and positive response to 2026 motorcycle lineup, particularly in sport and adventure touring families. Dealer inventory is healthier with a higher proportion of current model year products.
    Retail sales of new motorcycles: 30,000 unitsMarket share (U.S. 601+ DC market): 32%Dealer inventory decline: 15% YoYCurrent model year 2026 inventory: 85%
    		—3%——
    EMEA (Retail)
    Performance reflected a subdued economic environment in Europe, though the region experienced positive results in the Touring, sport, and Trike family categories.
    Market share (European market): 3% (down from 4% YoY)
    		—-9%——
    Asia Pacific (Retail)
    Marked a nice improvement from Q1 year-over-year change. The region experienced positive results in the sport, Trike, Touring, and CVO family categories.
    Australia and New Zealand growth: >20% vs prior year
    		—slightly up——
    Latin America (Retail)
    Delivered another strong quarter, marking four consecutive quarters of year-over-year growth. Touring was the standout category.
    Mexico sales: significantly upBrazil sales: down
    		—4%——
    Global (Consolidated Retail)
    Overall global retail sales performance for new motorcycles.
    Retail sales of new motorcycles: 42,500 units
    		—1%——
    HDMC (Motor Company)
    Revenue drivers were increased unit shipments and favorable foreign exchange effects, partially offset by net pricing. Gross profit was impacted by product mix, net pricing, raw materials, and foreign exchange effects, partially offset by manufacturing and other costs, including a tariff recovery.
    Motorcycle revenue: $848 millionParts & Accessories revenue: $177 million (down from $187 million YoY)Apparel & Licensing revenue: $62 million (up from $61 million YoY)Other revenue: $17 million (down from $18 million YoY)Gross profit: 27.5% (down 108 bps YoY)Adjusted EBITDA: $115 million (10.4% margin)
    		$1.1 billion6%—Operating income: $72 million (6.6% margin)
    HDFS (Financial Services)
    Revenue decrease driven by lower interest income due to the decline in retail receivables related to the sale of loan assets. Operating income benefited from significantly lower interest expense and provision for credit loss expense due to the decreased size of the retail loan portfolio and related debt.
    Annualized retail credit loss ratio on managed loans: 3.0% (down from 3.3% YoY)Total retail loan originations: $940 million (up 10% YoY)Total gross financing receivables: $2.7 billionRetail receivables: $1.7 billionCommercial receivables: $1.0 billion
    		$117 million-55%—Operating income: $22 million (18.5% margin)
    LiveWire
    Consolidated revenue increased due to increased unit sales of both electric motorcycles and StaCyc brand electric balance bikes. LiveWire continued to reduce its use of cash.
    Net cash used by operating activities: 18% improvement
    		—52%——

    Operational metrics

    21
    Domestic Dealer Profitability
    doublevs 2025
    2026

    Expected increase in domestic dealer profitability based on current trends.

    HDMC Wholesale Shipments
    39,200 unitsup 9% YoY
    Q2 FY26

    Wholesale shipments for the quarter.

    HDMC Gross Profit Margin
    27.5%down 108 bps YoY
    Q2 FY26

    Gross profit margin and its contributing factors.

    HDMC Operating Income Margin (before restructuring)
    6.8%
    Q2 FY26

    Operating income margin before considering restructuring expenses.

    HDMC Adjusted EBITDA
    $115 millionup from $97 million YoY
    Q2 FY26

    Adjusted EBITDA for the Motor Company.

    HDMC Adjusted EBITDA Margin
    10.4%up from 9.3% YoY
    Q2 FY26

    Adjusted EBITDA margin for the Motor Company.

    Tariff Expense (incurred before recoveries)
    $22 million
    Q2 FY26

    Gross tariff expense incurred in Q2 FY26 before any recoveries.

    Tariff Recovery (IEEPA)
    $20 million
    Q2 FY26

    Benefit from tariff recovery in Q2 FY26, primarily surrounding IEEPA recoveries.

    HDFS Annualized Retail Credit Loss Ratio
    3.0%down from 3.3% YoY
    Q2 FY26

    Annualized retail credit loss ratio on managed loans.

    HDFS Total Retail Loan Originations
    $940 millionup 10% YoY
    Q2 FY26

    Total retail loan originations for HDFS.

    Cash and Equivalents
    $1.9 billionup from $1.6 billion YoY
    end of Q2 FY26

    Consolidated cash and equivalents balance.

    HDMC Net Cash Position
    $1.2 billion cash vs $297 million debt
    end of Q2 FY26

    Net cash position for the Motor Company segment.

    HDFS Net Debt
    $1.8 billion
    end of Q2 FY26

    Net debt for Harley-Davidson Financial Services.

    HDFS Total Finance Receivables (held for investment)
    $2.1 billion
    end of Q2 FY26

    Total finance receivables held for investment by HDFS.

    Total Debt + Total Deposit Levels (HDI level)
    $2.8 billiondown from $7.4 billion YoY
    end of Q2 FY26

    Consolidated debt and deposit levels at the Harley-Davidson Inc. level, reflecting the HDFS transaction.

    Share Repurchases
    1.3 million shares$30 million worth
    Q2 FY26

    Discretionary share repurchases in Q2 FY26.

    Share Repurchases
    7.9 million shares$158 million worth
    H1 FY26

    Total share repurchases in the first half of FY26.

    LiveWire Net Cash Used by Operating Activities
    18% improvementvs prior year
    YTD June 30, 2026

    Improvement in net cash used by operating activities for LiveWire.

    HDMC Operating Expenses
    $232 milliondown $6 million YoY
    Q2 FY26

    Operating expenses for HDMC, including $3 million in restructuring expense.

    HDMC Restructuring Expense
    $3 million
    Q2 FY26

    Restructuring expense related to the company's new strategy.

    Consumer Promo Spend (North America)
    downYoY
    Q2 FY26

    Consumer promotional spend in North America was down year-over-year, even with sales growth.

    Industry KPIs

    2
    MetricValueDetails
    Vehicle deliveries wholesales39,200 unitsunits
    Dealer inventory days of supplydown 17%%

    Product announcements

    6
    ProductTypeDetails
    Super Glidelaunch
    Deadwoodlaunch
    S4 Honcholaunch
    Sportster 883launch
    RevMax Productionexpansion
    Sprintlaunch

    Deals & partnerships

    2
    KKR and PIMCOStrategic partnership for HDFS to reduce capital intensity and shift business model.

    HDFS entered into a strategic partnership with KKR and PIMCO, which closed in Q4 FY25. This transaction established a capital-light, de-risked business model for HDFS.

    Dust MotorcyclesAcquisition by LiveWire to accelerate expansion into the off-road category.

    LiveWire completed the acquisition of Dust Motorcycles during the second quarter.

    Risks & headwinds

    5
    Subdued economic environment and declining market share in EuropeQ2 FY26, ongoing

    Q2 retail sales down 9% YoY; market share declined from 4% to 3% YoY in the European market.

    Mitigation: Making portfolio adjustments and applying discipline to align product, price, customer demand, dealer economics, and local market needs, including the return of the Sportster 883 in 2027.

    Domestic supplier challenges impacting margins2026

    Had an impact on margins in 2026.

    Mitigation: Focused on improving reliability, reducing friction in the supply chain, and ensuring manufacturing and product teams have the necessary support.

    Ongoing tariff uncertainty and associated costsFY26, ongoing

    Expected cost of new or increased tariffs: $75 million to $90 million for FY26. Incurred $22 million in Q2 FY26 before recoveries.

    Mitigation: Committed to further strengthening U.S. manufacturing (e.g., moving RevMax production to the U.S.) and maintaining transparency with investors on tariff impacts.

    Uneven global consumer discretionary landscapeongoing

    Pricing continues to be on top of customers' minds given inflationary pressures, interest rates above recent historical lows, and global geopolitical uncertainty.

    Mitigation: Driving a more balanced portfolio of motorcycles and effective inventory management to promote dealer profitability improvements.

    Reduced cash inflows and lower consolidated revenue due to HDFS's new capital-light model2026 (distinct year-over-year item)

    Consolidated revenue down 6% YoY; HDFS revenue down 55% YoY. Net cash use of $59 million from operating activities in Q2 (vs $509 million operating cash in prior year).

    Mitigation: Transition to a capital-light, de-risked business model with a new baseline financial earnings profile expected to grow over the coming years.

    What to watch in Q3 FY26

    5

    Sportster 883 launch in Europe

    2027
    CurrentAnnounced for 2027
    TargetSpecific launch date and initial market reception

    Why it matters

    Expected to significantly help performance in the challenging European market and is a key portfolio adjustment.

    One prime example of that is the return of the Sportster 883 in 2027, which our European dealers are particularly excited about.

    Q&A highlights

    5

    Confirm launch timing for Sprint and Sportster models and provide shipment expectations, referencing historical Sportster volumes.

    Sprint is expected to ship by the end of 2026, while Sportster is slated for 2027, with no specific date yet. Management reiterated mid-single-digit retail targets, acknowledging potential upside but declining to provide specific volume guidance for the new models at this time.

    “As it relates to Sprint and Sportster restating, we expect to Sprint -- to ship Sprint end of this year and Sportster, we're not giving a date yet, but it will be in '27.”

    asked by Craig Kennison · answered by Arthur Starrs

    2 min read6 chapters

    Detailed Narrative

    01

    Back to the Bricks Strategy Progress

    Harley-Davidson is seeing early success with its new strategic plan, "Back to the Bricks," which aims to reset the business, rebuild dealer confidence, and improve execution. The company reported stabilization and greater focus in Q2 FY26, with North America retail sales up 3% and significant improvements in dealer inventory health. Management expressed confidence in the product direction and marketing efforts, reinforcing the brand's core identity.

    02

    Dealer Health and Inventory Management

    Dealer inventory levels have significantly improved, with global dealer inventory down 17% year-over-year and 85% of North America inventory comprising current model year 2026 products. This is the healthiest inventory position in years and is expected to double domestic dealer profitability in 2026. The company is actively working with dealers to optimize inventory mix and model management by region, aiming for appropriate supply-demand tension.

    03

    Product Launches and Brand Enthusiasm

    New models like the Super Glide and Deadwood have generated considerable excitement within the community. The Super Glide, launched in Q2, has shown strong sell-through and MSRP realization. The Deadwood, hitting dealerships in Q3, has received overwhelmingly positive reactions for its iconic personality, customization potential, and compelling price point. These "blank canvas" motorcycles are designed to strengthen emotional connection and support a diversified revenue model.

    04

    Parts & Accessories (P&A) Refocus

    The company is actively restoring its Parts & Accessories business, a critical component of the "Back to the Bricks" strategy. A dedicated General Manager has been appointed, and key accessory categories are being prioritized. P&A is currently tracking ahead of initial plans, supporting customization as a core Harley-Davidson experience and creating important opportunities for dealers.

    05

    HDFS Capital-Light Model Performance

    Harley-Davidson Financial Services (HDFS) continues to perform ahead of expectations under its new capital-light model, which was established through a strategic partnership with KKR and PIMCO. This model reduces capital intensity and shifts HDFS's economics from interest spread to servicing fees and gains/losses on sale of finance receivables. Despite a 55% decrease in Q2 revenue due to this transition, HDFS's operating income and loan origination activities remain strong.

    06

    Supply Chain and Tariff Environment

    Harley-Davidson is navigating domestic supplier challenges that have impacted 2026 margins, but the team has managed these issues effectively, leading to raised guidance. Tariff uncertainty🌐 persists, with an expected FY26 cost of $75 million-$90 million, though the company benefited from $20 million in tariff recoveries in Q2. Strategic actions, such as moving RevMax production for North American motorcycles back to the U.S., are being taken to strengthen manufacturing.

    AI-generated summary of the company’s earnings call. Not investment advice.