Harley-Davidson Reports 32.5% Decline in Motorcycles Revenue, 10.5% Growth in Financial Services

For the three months ended September 30, 2024, Harley-Davidson, Inc. reported a significant decline in revenue from its Motorcycles and related products segment, generating $881.2 million compared to $1.3 billion in the same period of 2023, marking a decrease of 32.5%. The decline was attributed to a 13.2% drop in worldwide retail sales of new motorcycles, with North American sales down 10.1%. The company also experienced a decrease in operating income, which fell to $105.8 million from $209.3 million year-over-year, a decline of 49.4%. Net income for the quarter was $116.0 million, down 40.9% from $196.1 million in Q3 2023.

In contrast, revenue from Financial Services increased to $269.5 million, up from $243.9 million in the prior year, reflecting a 10.5% growth. The operating income for the Financial Services segment rose to $76.7 million, a 29.3% increase from $59.4 million in Q3 2023, driven by higher interest income and a lower provision for credit losses.

For the nine months ended September 30, 2024, total revenue was $4.5 billion, down from $4.8 billion in the same period of 2023. The decline in revenue was primarily due to lower motorcycle shipments and the elimination of a pricing surcharge late in 2023. Operating income for the nine months decreased to $610.0 million from $800.2 million, while net income fell to $563.6 million from $671.8 million, reflecting a 16.1% decrease.

The company reported a cash and cash equivalents balance of $2.2 billion as of September 30, 2024, an increase from $1.5 billion a year earlier. Total current assets rose to $5.9 billion, compared to $5.2 billion in 2023. However, total current liabilities also increased to $4.2 billion from $3.4 billion, leading to a total shareholders' equity of $3.4 billion, up from $3.3 billion in the previous year.

In terms of strategic developments, Harley-Davidson announced a share repurchase plan of up to $1 billion starting in Q3 2024 through the end of 2026, with a revised plan to repurchase $450 million in 2024. The company is also focusing on achieving a total productivity target of $400 million by the end of 2025, with approximately $123 million in savings already realized in 2023.

The company continues to face challenges, including increased retail credit losses attributed to higher motorcycle payments and inflationary pressures on customers. The effective income tax rate for the nine months ended September 30, 2024, was 18.0%, down from 22.1% in the same period of 2023.