Harley-Davidson executives used the company’s fiscal 2025 fourth-quarter earnings call to outline a “reset” focused on dealer health, inventory discipline, brand momentum, and cost reduction, while acknowledging that near-term financial pressure is likely to continue as the company works through elevated channel inventory and a challenging macro backdrop.
Leadership frames 2026 as a transition year
CEO Artie Starrs, speaking in his first full quarter as chief executive, said the company is moving with “urgency, focus, and discipline” after what he called a challenging 2025. Starrs said wholesale shipments and margins were hurt by deliberate actions to reduce elevated dealer inventory—particularly Touring inventory in North America—through reduced shipments and targeted promotions intended to restore balanced retail inventory levels.
Dealer relationship reset and changes to retail engagement
Starrs repeatedly emphasized dealer health as “non-negotiable” and said Harley-Davidson is “resetting the relationship” with its dealer network around shared objectives and accountability. He cited recent dealer roundtables in North America and Europe, where he said there was broad alignment on the need for healthier inventory levels, improved mix, simpler rider engagement programs, and more flexibility for local market conditions.
He also reiterated two dealer-support changes previously discussed:
- Fuel facility model guidelines: Harley-Davidson reviewed the guidelines and adjusted the scope to better balance global brand identity with celebrating local communities.
- E-commerce: Starrs said the company’s historical e-commerce strategy “has not delivered the intended results,” created customer confusion, and contributed to discounting that pressured dealer economics. In North America, the company shifted to a model intended to drive incremental dealership traffic to support motorcycle sales.
Inventory actions, product and brand priorities
Management said inventory challenges were “more significant than initially anticipated” and are being addressed through promotional support for Touring models and quarterly planning by model, region, and dealership. Starrs said the Touring overhang remains “pronounced” but is being worked down with interventions designed to move product “without undermining long-term brand value.”
Jonathan Root, CFO and Chief Financial and Commercial Officer, said dealer inventory at the end of the fourth quarter was down 17% globally versus the prior year, exceeding the company’s 10% reduction target. North America dealer inventory ended down 16%, and international dealer inventory ended down 20%.
On brand and customer priorities, Starrs said Harley-Davidson is reorienting around the idea that “our dealers are customer number one,” and he highlighted renewed focus on parts and accessories to support customization. He also said future marketing will shift toward more “optimistic” and “joyful” storytelling that reflects rider communities.
On product strategy, Starrs said the company is taking steps to add breadth and flexibility in its portfolio to better align “aspiration with accessibility,” including being “honest” about where pricing and portfolio decisions have limited reach. He said used-market activity signals demand, especially for core Softail models, but at prices aligned with current economic conditions.
Fourth-quarter and full-year results reflect lower volumes, HDFS transaction impacts
Root reported fourth-quarter consolidated revenue fell 28%, driven by a 10% decline at Harley-Davidson Motor Company (HDMC) and a 59% decline at Harley-Davidson Financial Services (HDFS). Consolidated operating income was a loss of $361 million, compared with an operating loss of $193 million in the year-ago quarter. Fourth-quarter EPS was a loss of $2.44, compared with a loss of $0.93 in the prior-year quarter.
For the full year 2025, consolidated revenue was $4.5 billion, down 14% year over year. Consolidated operating income was $387 million, compared with $417 million in 2024, and full-year EPS was $2.78 versus $3.44 a year earlier.
Retail results were mixed. In the fourth quarter, North America retail sales of new motorcycles rose 5% to 15,847 units, while international retail sales fell 10% to 9,440 units, resulting in global retail down 1% to 25,287 units. Root said the volatility reflected a difficult global backdrop for big-ticket discretionary categories, with pricing sensitivity influenced by inflation and interest rates.
Within North America, U.S. retail was up 6% while Canada was down 7%. Root said Grand American Touring retail was up 6% in the quarter, supported by promotions, and Sport models were up 33% as updated pricing and marketing resonated with dealers and customers. In EMEA, fourth-quarter retail declined 24%, and Asia Pacific fell 1% with continued weakness in China offset by positive results in Japan and emerging markets. Latin America rose 10% in the quarter.
At HDMC, fourth-quarter revenue decreased 10% to $379 million. Root said HDMC gross profit was a loss of $30 million in the quarter, and operating expenses rose 9% to $230 million, driven by higher marketing spend tied to a North America-focused Marketing Development Fund for dealers. HDMC posted an operating loss of $260 million in the quarter.
For the full year, HDMC revenue declined 13% to $3.6 billion as wholesale shipments fell about 16% to roughly 125,000 motorcycles. Full-year HDMC gross margin was 24.2% versus 28% in 2024, which Root attributed to incremental tariffs, negative operating leverage, and lower volumes, partially offset by lower supply management and logistics costs, favorable mix, foreign exchange, and largely flat net pricing. HDMC operating income was a loss of $29 million for the year, compared with operating income of $278 million in 2024.
On tariffs, Root said the cost of new or increased tariffs was $22 million in the fourth quarter and $67 million for full-year 2025, adding that the environment remains fluid and the company has mitigation actions underway.
HDFS results were heavily influenced by the transaction completed at the end of October, described as a strategic partnership with KKR and PIMCO intended to shift HDFS to a “capital-light, de-risked” model. Root said HDFS posted an operating loss of $82 million in the fourth quarter, driven by $73 million of discrete liability management costs tied to retiring debt. For the full year, however, Root called 2025 “record-high earnings” for HDFS, with operating income of $490 million versus $248 million in 2024, aided by transaction-related impacts including a favorable provision for credit losses and higher other income.
Outlook: shipments aligned to retail, higher tariff headwind, cost review underway
For 2026, Root guided HDMC retail units and wholesale units to 130,000–135,000, reflecting an expected near one-to-one relationship between retail and wholesale as dealer inventories start the year at “appropriate total levels,” though the company expects production to be lower than wholesale to manage company inventory. Root also forecast a 2026 tariff cost of $75 million to $105 million based on current levels, compared with $67 million in 2025.
Root said the company expects to continue consumer promotions into the first quarter of 2026 to help work through Touring inventory, and the company took an accrual in fourth-quarter 2025 financials for those programs. In Q&A, Root said wholesale shipments could be somewhat back-end loaded in 2026, with Q1 expected to be down year over year, Q2 higher, Q3 slightly lower, and “room for a pretty material change” in Q4 given how measured shipments were in Q4 2025.
On costs, Starrs said the company is conducting an end-to-end review of its cost base and operating expenses, supported by third-party specialists. He said corporate overhead, manufacturing capacity, and operating expenses are built for materially higher volumes than current demand. Root later said the company anticipates at least $150 million of annual run-rate savings impacting 2027 and beyond, and clarified during Q&A that the savings exclude LiveWire and would be within the Motor Company and HDFS. He said the company expects to begin realizing some savings in the back half of 2026, while emphasizing the annual run-rate target begins in 2027.
For LiveWire, Starrs noted that Harley-Davidson renegotiated and funded its term loan with LiveWire, reducing the principal to $75 million, and said LiveWire is pursuing other sources of capital. Root said LiveWire’s fourth-quarter operating loss was $18 million, and LiveWire forecast a 2026 operating loss of $70 million to $80 million, with focus on launching its S4 Honcho products, network expansion, cost savings, and development of profitable products.
Root also said Harley-Davidson generated $569 million of operating cash flow in 2025, down from $1.064 billion in 2024, and ended the year with $3.1 billion of cash and equivalents. He said the HDFS transaction enabled a $1 billion dividend from HDFS to Harley-Davidson in the fourth quarter, with an additional dividend expected in Q1. The company also entered an accelerated share repurchase agreement to repurchase $200 million of shares, and repurchased $347 million in total during 2025, representing 13.1 million shares, or about 11% of shares outstanding as of December 31, 2024.
About LiveWire Ergogenics (OTCMKTS:LVVV)
LiveWire Ergogenics Inc focuses on acquiring, managing, and licensing special purpose real estate properties to produce handcrafted and organically grown cannabis products for medical and recreational adult-use in California. The company is based in Anaheim, California.
