Harley-Davidson’s second quarter saw sales and profitability fall short of Wall Street expectations, yet the market responded positively, reflecting investor focus on management’s proactive steps. CEO Jochen Zeitz attributed the quarter’s performance to a planned reduction in motorcycle shipments and ongoing softness in discretionary spending, especially in North America. Management cited elevated interest rates, global tariff uncertainty, and softer customer demand as key factors impacting retail sales and operating margins. Zeitz highlighted, “We remained disciplined in promotions, even as competitors leaned heavily on promotional activity,” emphasizing Harley-Davidson’s approach to maintaining brand value over volume.
Is now the time to buy HOG? Find out in our full research report (it’s free).
Harley-Davidson (HOG) Q2 CY2025 Highlights:
- Revenue: $1.31 billion vs analyst estimates of $1.37 billion (19.3% year-on-year decline, 4.6% miss)
- Adjusted EPS: $0.88 vs analyst expectations of $0.93 (5.4% miss)
- Adjusted EBITDA: $141.8 million vs analyst estimates of $176 million (10.8% margin, 19.4% miss)
- Operating Margin: 8.6%, down from 14.9% in the same quarter last year
- Motorcycles Sold: 35,837, down 13,823 year on year
- Market Capitalization: $2.94 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Harley-Davidson’s Q2 Earnings Call
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Craig R. Kennison (Baird) asked for details on the 1.75x book value calculation behind the HDFS deal. CFO Jonathan Root explained it is based on the equity investment premium relative to HDFS’s post-transaction book value, with further details to be disclosed in future filings.
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Tristan M. Thomas-Martin (BMO Capital Markets) inquired about improved dealer traffic in July and its impact on retail sales. CEO Jochen Zeitz noted sequential improvement in North American retail trends and expects continued gains through the remainder of the year.
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Alexander Thomas Perry (Bank of America) asked about dealer inventory targets and timing for new model launches. Management emphasized the commitment to double-digit inventory reductions and confirmed a shift to fall launches, with special edition releases to sustain dealer excitement.
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James Lloyd Hardiman (Citi) focused on the profitability of the new entry-level bike. Zeitz said the product has been engineered for profitability, marking a first for Harley-Davidson in targeting the entry-level segment.
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Jaime M. Katz (Morningstar) queried the timing of the HDFS transaction proceeds and the scope of new efficiency initiatives. Root clarified the proceeds will be recognized in both Q3 and Q4, while Zeitz said details on the new efficiency program—including AI-driven cost savings—will be communicated in future updates.
Catalysts in Upcoming Quarters
Looking ahead, our analysts are closely monitoring (1) the pace of adoption for Harley-Davidson’s new entry-level and Cruiser motorcycles, (2) execution and impact of the capital-light HDFS partnership on operating income and cash allocation, and (3) further progress on inventory reductions and dealer channel health. Changes in the tariff environment and the effectiveness of new efficiency measures will also be critical to future performance.
Harley-Davidson currently trades at $24.03, up from $22.96 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free).
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