Harley Davidson Q4 2025 Harley Davidson Inc Earnings Call | AllMind AI Earnings | AllMind AI
Q4 2025 Harley Davidson Inc Earnings Call
Speaker #1: Call. Please be advised that today's conference is being recorded. I would now like to hand the conference over to Shawn Collins. Thank you. Please go
Speaker #1: ahead. Thank
Speaker #2: you. Good morning. This is Shawn Collins, the Director of Investor Relations at HARLEY-DAVIDSON. You can access the slides supporting today's call on the internet at the HARLEY-DAVIDSON Investor Relations website.
Speaker #2: As you might expect, our comments will include forward-looking statements that are subject to risks that could cause actual results to be materially different. Those risks include among others matters we have noted in today's earnings release and in our latest filings with the SEC.
Operator: Thank you for standing by, and welcome to the Harley-Davidson 2025 Q4 Investor and Analyst Conference Call. Please be advised that today's conference is being recorded. I would now like to hand the conference over to Shawn Collins. Thank you. Please go ahead.
Operator: Thank you for standing by, and welcome to the Harley-Davidson 2025 Q4 Investor and Analyst Conference Call. Please be advised that today's conference is being recorded. I would now like to hand the conference over to Shawn Collins. Thank you. Please go ahead.
Speaker #2: Joining me for this morning's call are HARLEY-DAVIDSON Chief Executive Officer Artie Starrs, and Chief Financial and Commercial Officer Jonathan Root. With that, let me turn it over to HARLEY-DAVIDSON CEO Artie Starrs.
Shawn Collins: Thank you. Good morning. This is Shawn Collins, the Director of Investor Relations at Harley-Davidson. You can access the slides supporting today's call on the internet at the Harley-Davidson Investor Relations website. As you might expect, our comments will include forward-looking statements that are subject to risks that could cause actual results to be materially different. Those risks include, among others, matters we have noted in today's earnings release and in our latest filings with the SEC. Joining me for this morning's call are Harley-Davidson Chief Executive Officer, Artie Starrs, and Chief Financial and Commercial Officer, Jonathan Root. With that, let me turn it over to Harley-Davidson CEO, Artie Starrs.
Shawn Collins: Thank you. Good morning. This is Shawn Collins, the Director of Investor Relations at Harley-Davidson. You can access the slides supporting today's call on the internet at the Harley-Davidson Investor Relations website. As you might expect, our comments will include forward-looking statements that are subject to risks that could cause actual results to be materially different. Those risks include, among others, matters we have noted in today's earnings release and in our latest filings with the SEC. Joining me for this morning's call are Harley-Davidson Chief Executive Officer, Artie Starrs, and Chief Financial and Commercial Officer, Jonathan Root.
Speaker #3: Good morning, everyone. And thank you for joining us today. For our Q4 and full year 2025 results. Before we get into it, I'd like to thank our HARLEY-DAVIDSON employees, the HD Dealer Network, and our riders that are listening in this morning.
Speaker #3: Thank you for all you do every day for the company: living and leading our brand and culture. This marks my first full quarter as CEO.
Speaker #2: among others matters we have noted in today's earnings release and in our latest filings with the SEC. Joining me for this morning's call are HARLEY-DAVIDSON Chief Executive Officer Artie Starrs, and Chief Financial and Commercial Officer Jonathan Root.
Speaker #3: I've spent this time focused on understanding the core of our business, our people, our dealers, our riders, and the realities of the marketplace. Through extensive time on the ground, I've confirmed many of the early observations I shared last quarter.
Speaker #3: I'm confident there's a clear path to put HARLEY-DAVIDSON back on the right trajectory, and I now have a sharper view of what it will take to reset the business and get to a more stable operating and financial future in 26 and beyond.
Shawn Collins: With that, let me turn it over to Harley-Davidson CEO, Artie Starrs.
Speaker #2: With
Artie Starrs: Good morning, everyone, and thank you for joining us today for our Q4 and full year 2025 results. Before we get into it, I'd like to thank our Harley-Davidson employees, the HD dealer network, and our riders that are listening in this morning. Thank you for all you do every day for the company, living and leading our brand and culture. This marks my first full quarter as CEO. I've spent this time focused on understanding the core of our business, our people, our dealers, our riders, and the realities of the marketplace. Through extensive time on the ground, I've confirmed many of the early observations I shared last quarter.
Artie Starrs: Good morning, everyone, and thank you for joining us today for our Q4 and full year 2025 results. Before we get into it, I'd like to thank our Harley-Davidson employees, the HD dealer network, and our riders that are listening in this morning. Thank you for all you do every day for the company, living and leading our brand and culture. This marks my first full quarter as CEO. I've spent this time focused on understanding the core of our business, our people, our dealers, our riders, and the realities of the marketplace. Through extensive time on the ground, I've confirmed many of the early observations I shared last quarter.
Speaker #3: This morning, we will provide more detail on the themes you heard from us on our last call as we work towards our expected strategic plan announcement in May this year.
Speaker #3: Turning to our fourth quarter results, which we do not believe reflect the full potential of this company, 2025 was a challenging year. And while some of the pressures we are facing are macro-driven, others are firmly within our control, and we are moving with urgency, focus, and discipline to address them.
Speaker #3: Wholesale shipments and associated margins were negatively impacted by intentional actions to address elevated dealer inventory, particularly touring inventory in North America, through interventions on both the supply and demand sides.
Artie Starrs: I'm confident there's a clear path to put Harley-Davidson back on the right trajectory, and I now have a sharper view of what it will take to reset the business and get to a more stable operating and financial future in 2026 and beyond. This morning, we will provide more detail on the themes you heard from us on our last call, as we work towards our expected strategic plan announcement in May this year. Turning to our Q4 results, which we do not believe reflect the full potential of this company, 2025 was a challenging year. While some of the pressures we are facing are macro-driven, others are firmly within our control, and we are moving with urgency, focus, and discipline to address them.
Artie Starrs: I'm confident there's a clear path to put Harley-Davidson back on the right trajectory, and I now have a sharper view of what it will take to reset the business and get to a more stable operating and financial future in 2026 and beyond. This morning, we will provide more detail on the themes you heard from us on our last call, as we work towards our expected strategic plan announcement in May this year. Turning to our Q4 results, which we do not believe reflect the full potential of this company, 2025 was a challenging year. While some of the pressures we are facing are macro-driven, others are firmly within our control, and we are moving with urgency, focus, and discipline to address them.
Speaker #3: During the quarter, we reduced wholesale shipments and implemented targeted promotions to accelerate the return to balanced retail inventory levels. These actions are beginning to deliver results.
Speaker #3: Rider response has been positive, with North American retail sales growth in the quarter accelerating into December. Yielding early indications of improving dealer profitability. We plan to continue these interventions with discipline, as we work to optimize retail inventory, positioning the business and our dealer network for more sustainable performance going forward.
Speaker #3: which we do not believe reflect the full potential of this company, 2025 was a challenging year. And while some of the pressures we are facing are macro-driven, others are firmly within our control, and we are moving with urgency focus and discipline to address
Speaker #3: them. Wholesale shipments and associated margins were negatively impacted by intentional actions to address elevated dealer inventory, particularly touring inventory in North America, through interventions on both the supply and demand sides.
Speaker #3: That said, we're encouraged by the early green shoots we're seeing. Our immediate priorities are both straightforward and deliberate. First, we believe we are stabilizing the business by restoring dealer confidence and aligning wholesale activity with retail demand.
Artie Starrs: Wholesale shipments and associated margins were negatively impacted by intentional actions to address elevated dealer inventory, particularly touring inventory in North America, through interventions on both the supply and demand sides. During the quarter, we reduced wholesale shipments and implemented targeted promotions to accelerate the return to balanced retail inventory levels. These actions are beginning to deliver results. Rider response has been positive, with North American retail sales growth in the quarter accelerating into December, yielding early indications of improving dealer profitability. We plan to continue these interventions with discipline as we work to optimize retail inventory, positioning the business and our dealer network for more sustainable performance going forward. That said, we're encouraged by the early green shoots we're seeing. Our immediate priorities are both straightforward and deliberate. First, we believe we are stabilizing the business by restoring dealer confidence and aligning wholesale activity with retail demand.
Artie Starrs: Wholesale shipments and associated margins were negatively impacted by intentional actions to address elevated dealer inventory, particularly touring inventory in North America, through interventions on both the supply and demand sides. During the quarter, we reduced wholesale shipments and implemented targeted promotions to accelerate the return to balanced retail inventory levels. These actions are beginning to deliver results. Rider response has been positive, with North American retail sales growth in the quarter accelerating into December, yielding early indications of improving dealer profitability. We plan to continue these interventions with discipline as we work to optimize retail inventory, positioning the business and our dealer network for more sustainable performance going forward. That said, we're encouraged by the early green shoots we're seeing. Our immediate priorities are both straightforward and deliberate. First, we believe we are stabilizing the business by restoring dealer confidence and aligning wholesale activity with retail demand.
Speaker #3: During the quarter, we reduced wholesale shipments and implemented targeted promotions to accelerate the return to balanced retail inventory levels. These actions are beginning to deliver results.
Speaker #3: Second, we are finalizing a strategy that we believe builds a durable platform that leans into our core and positions HARLEY-DAVIDSON to return to sustainable growth.
Speaker #3: Early in my tenure, I committed to three immediate priorities: improving dealer profitability, reigniting brand momentum, and reducing costs. These commitments have not changed. Today, I'll walk you through the immediate actions already underway to advance these priorities.
Speaker #3: Rider response has been positive, with North American retail sales growth in the quarter accelerating into December. Yielding early indications of improving dealer profitability. We plan to continue these interventions with discipline, as we work to optimize retail inventory, positioning the business and our dealer network for more sustainable performance going forward.
Speaker #3: These actions are in the following areas. Restoring our relationship with dealers, improving inventory management, sharpening our customer focus with the right portfolio, leaning further into the strengths of our brand and community, and enhancing financial flexibility.
Speaker #3: That said, we're encouraged by the early green shoots we're seeing. Our immediate priorities are both straightforward and deliberate. First, we believe we are stabilizing the business by restoring dealer confidence and aligning wholesale activity with retail demand.
Speaker #3: Let me start with our dealer network. HARLEY-DAVIDSON's dealer network is best in class, distinguished by unmatched enthusiasm, reach, and strength. While the network remains a competitive advantage, dealer health today is uneven, with some dealers facing challenges.
Speaker #3: Second, we are finalizing a strategy that we believe builds a durable platform that leans into our core and positions HARLEY-DAVIDSON to return to sustainable growth.
Artie Starrs: Second, we are finalizing a strategy that we believe builds a durable platform that leans into our core and positions Harley-Davidson to return to sustainable growth. Early in my tenure, I committed to three immediate priorities: improving dealer profitability, reigniting brand momentum, and reducing costs. These commitments have not changed. Today, I'll walk you through the immediate actions already underway to advance these priorities. These actions are in the following areas: restoring our relationship with dealers, improving inventory management, sharpening our customer focus with the right portfolio, leaning further into the strengths of our brand and community, and enhancing financial flexibility. Let me start with our dealer network. Harley-Davidson's dealer network is best in class, distinguished by unmatched enthusiasm, reach, and strength. While the network remains a competitive advantage, dealer health today is uneven, with some dealers facing challenges. Dealer health is not optional.
Artie Starrs: Second, we are finalizing a strategy that we believe builds a durable platform that leans into our core and positions Harley-Davidson to return to sustainable growth. Early in my tenure, I committed to three immediate priorities: improving dealer profitability, reigniting brand momentum, and reducing costs. These commitments have not changed. Today, I'll walk you through the immediate actions already underway to advance these priorities. These actions are in the following areas: restoring our relationship with dealers, improving inventory management, sharpening our customer focus with the right portfolio, leaning further into the strengths of our brand and community, and enhancing financial flexibility. Let me start with our dealer network. Harley-Davidson's dealer network is best in class, distinguished by unmatched enthusiasm, reach, and strength. While the network remains a competitive advantage, dealer health today is uneven, with some dealers facing challenges. Dealer health is not optional.
Speaker #3: Dealer health is not optional, and is a critical foundation for our long-term growth and earnings power. We're resetting the relationship between the motor company and our dealers, that relationship must be built on mutual trust and respect, shared objectives, shared accountability, and shared success.
Speaker #3: Early in my tenure, I committed to three immediate priorities: improving dealer profitability, reigniting brand momentum, and reducing costs. These commitments have not changed. Today, I'll walk you through the immediate actions already underway to advance these priorities.
Speaker #3: These actions are in the following areas: restoring our relationship with dealers, improving inventory management, sharpening our customer focus with the right portfolio, leaning further into the strengths of our brand and community, and enhancing financial flexibility.
Speaker #3: Healthy inventory levels and a healthy dealer network are non-negotiable. Over the last couple of months, I continue to series of roundtable discussions with our North American and European dealers, most recently I spent time at our European markets, including attending the Verona Bike Expo and a Hog Chapter morning meeting.
Speaker #3: Let me start with our dealer network. HARLEY-DAVIDSON's dealer network is best in class, distinguished by unmatched enthusiasm, reach, and strength. While the network remains a competitive advantage, dealer health today is uneven, with some dealers facing challenges.
Speaker #3: The insights from these engagements were consistent with my US visits. Extraordinary passion for the HARLEY-DAVIDSON brand and strong commitment to the business. Importantly, there is broad alignment around the changes required to drive sustainable growth going forward.
Speaker #3: Dealer health is not optional, and is a critical foundation for our long-term growth and earnings power. We're resetting the relationship between the Motor Company and our dealers. That relationship must be built on mutual trust and respect, shared objectives, shared accountability, and shared success.
Artie Starrs: It is a critical foundation for our long-term growth and earnings power. We're resetting the relationship between the motor company and our dealers. That relationship must be built on mutual trust and respect, shared objectives, shared accountability, and shared success. Healthy inventory levels and a healthy dealer network are non-negotiable. Over the last couple of months, I continued a series of roundtable discussions with our North American and European dealers. Most recently, I spent time in our European markets, including attending the Verona Motor Bike Expo and a HOG chapter morning meeting. The insights from these engagements were consistent with my US visits. Extraordinary passion for the Harley-Davidson brand and strong commitment to the business. Importantly, there is broad alignment around the changes required to drive sustainable growth going forward....
Artie Starrs: It is a critical foundation for our long-term growth and earnings power. We're resetting the relationship between the motor company and our dealers. That relationship must be built on mutual trust and respect, shared objectives, shared accountability, and shared success. Healthy inventory levels and a healthy dealer network are non-negotiable. Over the last couple of months, I continued a series of roundtable discussions with our North American and European dealers. Most recently, I spent time in our European markets, including attending the Verona Motor Bike Expo and a HOG chapter morning meeting. The insights from these engagements were consistent with my US visits. Extraordinary passion for the Harley-Davidson brand and strong commitment to the business. Importantly, there is broad alignment around the changes required to drive sustainable growth going forward....
Speaker #3: These include healthier inventory levels, improved product mix, simpler and more effective rider engagement programs, and greater flexibility to reflect local market conditions. Drawing on my experience in franchise-based models, I know that sustained success depends on alignment, transparency, and disciplined execution.
Speaker #3: Healthy inventory levels and a healthy dealer network are non-negotiable. Over the last couple of months, I continue to series of roundtable discussions with our North American and European dealers, most recently I spent time at our European markets, including attending the Verona Bike Expo and a Hog Chapter morning meeting.
Speaker #3: We're committed to reestablishing that foundation, beginning with immediate interventions that we expect to improve our dealers' retail performance and financial trajectory, while accelerating trust across the network.
Speaker #3: As we mentioned in Q3, we've begun to act with two quick and meaningful changes to support our dealers. First, we reviewed our fuel facility model guidelines adjusting the scope to better balance global brand identity with celebrating local communities.
Speaker #3: The insights from these engagements were consistent with my US visits. Extraordinary passion for the business. Importantly, there is broad alignment around the changes required to drive sustainable growth going forward.
Speaker #3: Second, we made a commitment to reevaluate e-commerce. The company's e-commerce strategy has not historically delivered the intended results. It has created customer confusion, and driven excessive discounting, placing unnecessary pressure on dealer economics.
Speaker #3: These include healthier inventory levels, improved product mix, simpler and more effective rider engagement programs, and greater flexibility to reflect local market conditions. Drawing on my experience in franchise-based models, I know that sustained success depends on alignment, transparency, and disciplined execution.
Artie Starrs: These include healthier inventory levels, improved product mix, simpler and more effective rider engagement programs, and greater flexibility to reflect local market conditions. Drawing on my experience in franchise-based models, I know that sustained success depends on alignment, transparency, and disciplined execution. We're committed to reestablishing that foundation, beginning with immediate interventions that we expect to improve our dealers' retail performance and financial trajectory, while accelerating trust across the network. As we mentioned in Q3, we've begun to act with two quick and meaningful changes to support our dealers. First, we reviewed our fuel facility model guidelines, adjusting the scope to better balance global brand identity with celebrating local communities. Second, we made a commitment to reevaluate e-commerce. The company's e-commerce strategy has not historically delivered the intended results. It has created customer confusion and driven excessive discounting, placing unnecessary pressure on dealer economics.
Artie Starrs: These include healthier inventory levels, improved product mix, simpler and more effective rider engagement programs, and greater flexibility to reflect local market conditions. Drawing on my experience in franchise-based models, I know that sustained success depends on alignment, transparency, and disciplined execution. We're committed to reestablishing that foundation, beginning with immediate interventions that we expect to improve our dealers' retail performance and financial trajectory, while accelerating trust across the network. As we mentioned in Q3, we've begun to act with two quick and meaningful changes to support our dealers. First, we reviewed our fuel facility model guidelines, adjusting the scope to better balance global brand identity with celebrating local communities. Second, we made a commitment to reevaluate e-commerce. The company's e-commerce strategy has not historically delivered the intended results. It has created customer confusion and driven excessive discounting, placing unnecessary pressure on dealer economics.
Speaker #3: We've taken corrective action in North America by shifting to a model that is intended to drive incremental dealership traffic to support motorcycle sales. In the near term, our focus is clear.
Speaker #3: We're committed to reestablishing that foundation, beginning with immediate interventions that we expect to improve our dealers' retail performance and financial trajectory, while accelerating trust across the Q3, we've begun to act with two quick and meaningful changes to support our dealers.
Speaker #3: Support our dealers, drive traffic to dealerships, and execute against our core business, selling motorcycles. While retail sales are still meaningfully below what we would consider a healthy run rate, the early progress is encouraging.
Speaker #3: First, we reviewed our fuel facility model guidelines adjusting the scope to better balance global brand identity with celebrating local communities. Second, we made a commitment to reevaluate e-commerce.
Speaker #3: We believe these actions are improving predictability, and positioning the business for more consistent execution. Turning to inventory, on our Q3 earnings call, I was clear that inventory discipline and adapting to the realities of the current retail environment would be central to our focus.
Speaker #3: The company's e-commerce strategy has not historically delivered the intended results. It has created customer confusion, and driven excessive discounting, placing unnecessary pressure on dealer economics.
Speaker #3: As we've dug deeper, it's become evident that the challenges are more significant than initially anticipated, and we're addressing them head-on. We are aggressively addressing inventory through targeted promotional support for touring models and disciplined quarterly planning by model region and dealership.
Speaker #3: We've taken corrective action in North America by shifting to a model that is intended to drive incremental dealership traffic to support motorcycle sales. In the near term, our focus is clear.
Artie Starrs: We've taken corrective action in North America by shifting to a model that is intended to drive incremental dealership traffic to support motorcycle sales. In the near term, our focus is clear: support our dealers, drive traffic to dealerships, and execute against our core business, selling motorcycles. While retail sales are still meaningfully below what we would consider a healthy run rate, the early progress is encouraging. We believe these actions are improving predictability and positioning the business for more consistent execution. Turning to inventory. On our Q3 earnings call, I was clear that inventory discipline and adapting to the realities of the current retail environment would be central to our focus. As we've dug deeper, it's become evident that the challenges are more significant than initially anticipated, and we're addressing them head-on.
Artie Starrs: We've taken corrective action in North America by shifting to a model that is intended to drive incremental dealership traffic to support motorcycle sales. In the near term, our focus is clear: support our dealers, drive traffic to dealerships, and execute against our core business, selling motorcycles. While retail sales are still meaningfully below what we would consider a healthy run rate, the early progress is encouraging. We believe these actions are improving predictability and positioning the business for more consistent execution. Turning to inventory. On our Q3 earnings call, I was clear that inventory discipline and adapting to the realities of the current retail environment would be central to our focus. As we've dug deeper, it's become evident that the challenges are more significant than initially anticipated, and we're addressing them head-on.
Speaker #3: Support our dealers, drive traffic to dealerships, and execute against our core business, selling motorcycles. While retail sales are still meaningfully below what we would consider a healthy run rate, the early progress is encouraging.
Speaker #3: We believe this approach allows us to align inventory with sales trajectories, account for regional needs, and proactively manage production and shipments, accounting for seasonality.
Speaker #3: The touring overhang remains pronounced, and is being actively worked down through disciplined interventions designed to move the product efficiently without undermining long-term brand value.
Speaker #3: We believe these actions are improving predictability, and positioning the business for more consistent execution. Turning to inventory, on our Q3 earnings call, I was clear that inventory discipline and adapting to the realities of the current retail environment would be central to our focus.
Speaker #3: In North America, dealer inventory declined 16% relative to year-end 2024 levels. Globally, dealer inventory was down 17% over the same period, meaningfully exceeding our 10% global reduction target.
Speaker #3: As we've dug deeper, it's become evident that the challenges are more significant than initially anticipated, and we're addressing them head-on. We are aggressively addressing inventory through targeted promotional support for touring models, and disciplined quarterly planning by model region and dealership.
Speaker #3: This represents solid progress against our priorities and I'm pleased with the team's execution and delivery. Overall, retail performance through the quarter was broadly in line with internal expectations.
Artie Starrs: We are aggressively addressing inventory through targeted promotional support for touring models and disciplined quarterly planning by model, region, and dealership. We believe this approach allows us to align inventory with sales trajectories, account for regional needs, and proactively manage production and shipments, accounting for seasonality. The touring overhang remains pronounced and is being actively worked down through disciplined interventions designed to move the product efficiently without undermining long-term brand value. In North America, dealer inventory declined 16% relative to year-end 2024 levels. Globally, dealer inventory was down 17% over the same period, meaningfully exceeding our 10% global reduction target. This represents solid progress against our priorities, and I'm pleased with the team's execution and delivery. Overall, retail performance through the quarter was broadly in line with internal expectations.
Artie Starrs: We are aggressively addressing inventory through targeted promotional support for touring models and disciplined quarterly planning by model, region, and dealership. We believe this approach allows us to align inventory with sales trajectories, account for regional needs, and proactively manage production and shipments, accounting for seasonality. The touring overhang remains pronounced and is being actively worked down through disciplined interventions designed to move the product efficiently without undermining long-term brand value. In North America, dealer inventory declined 16% relative to year-end 2024 levels. Globally, dealer inventory was down 17% over the same period, meaningfully exceeding our 10% global reduction target. This represents solid progress against our priorities, and I'm pleased with the team's execution and delivery. Overall, retail performance through the quarter was broadly in line with internal expectations.
Speaker #3: North American retail was up year over year, while international retail, particularly in EMEA, was softer than we expected. We expect the actions we are taking to assist dealers in moving through inventory to restore dealer health, to have a near-term impact on our financial results.
Speaker #3: We believe this approach allows us to align inventory with sales trajectories account for regional needs, and proactively manage production and shipments, accounting for seasonality.
Speaker #3: The touring overhang remains pronounced and is being actively worked down through disciplined interventions designed to move the product efficiently without undermining long-term brand value.
Speaker #3: With that in mind, we view 2026 as a transition year as we reset the business and finalize our new strategy. I see a path to return to long-term earnings and free cash flow power of the business to the levels we know are possible.
Speaker #3: In North America, dealer inventory declined 16% relative to year-end 2024 levels. Globally, dealer inventory was down 17% over the same period, meaningfully exceeding our 10% global reduction target.
Speaker #3: I can tell you we expect margins to be under pressure in the near term, as production runs below wholesale, creating operating deleverage. These are deliberate actions that we believe are necessary to support both dealer and company profitability, and ultimately rebuild the long-term earnings power of the business.
Speaker #3: This represents solid progress against our priorities, and I'm pleased with the team's execution and delivery. Overall, retail performance through the quarter was broadly in line with internal expectations.
Speaker #3: As I've discussed, we are in the early stages of a reset, we've made decisive changes in the work underway across the organization as designed to rebuild momentum, and the right way for the long term.
Speaker #3: North American retail was up year over year, while international retail, particularly in EMEA, was softer than we expected. We expect the actions we are taking to assist dealers in moving through inventory to restore dealer health to have a near-term impact on our financial results.
Artie Starrs: North American retail was up year-over-year, while international retail, particularly in EMEA, was softer than we expected. We expect the actions we are taking to assist dealers in moving through inventory to restore dealer health to have a near-term impact on our financial results. With that in mind, we view 2026 as a transition year as we reset the business and finalize our new strategy. I see a path to return to long-term earnings and free cash flow power of the business to the levels we know are possible. I can tell you, we expect margins to be under pressure in the near term as production runs below wholesale, creating operating deleverage. These are deliberate actions that we believe are necessary to support both dealer and company profitability, and ultimately rebuild the long-term earnings power of the business.
Artie Starrs: North American retail was up year-over-year, while international retail, particularly in EMEA, was softer than we expected. We expect the actions we are taking to assist dealers in moving through inventory to restore dealer health to have a near-term impact on our financial results. With that in mind, we view 2026 as a transition year as we reset the business and finalize our new strategy. I see a path to return to long-term earnings and free cash flow power of the business to the levels we know are possible. I can tell you, we expect margins to be under pressure in the near term as production runs below wholesale, creating operating deleverage. These are deliberate actions that we believe are necessary to support both dealer and company profitability, and ultimately rebuild the long-term earnings power of the business.
Speaker #3: Turning to the brand and our customer, our leadership team is reorienting the organization around a clear priority: our dealers, our customer number one. When we enable our dealers to sell, customize, and service the motorcycles, our riders want, everyone wins.
Speaker #3: With that in mind, we view 2026 as a transition year as we reset the business and finalize our new strategy. I see a path to return to long-term earnings and free cash flow power of the business to the levels we know are possible.
Speaker #3: I continue to spend significant time with dealers and riders, including attending a Hog Chapter gathering in Milan as part of my visit to Europe.
Speaker #3: I can tell you we expect margins to be under pressure in the near term, as production runs below wholesale, creating operating de-leverage. These are deliberate actions that we believe are necessary to support both dealer and company profitability, and ultimately rebuild the long-term earnings power of the business.
Speaker #3: The pride those members took in showing me their HARLEY-DAVIDSON motorcycles was contagious. It's clear our riders view their HARLEY as their individual motorcycle. Individual expression matters, and customization is central to that experience.
Speaker #3: As I've discussed, we are in the early stages of a reset. We've made decisive changes in the work underway across the organization, designed to rebuild momentum, and the right way for the long term.
Artie Starrs: As I've discussed, we are in the early stages of a reset. We've made decisive changes, and the work underway across the organization is designed to rebuild momentum in the right way and for the long term. Turning to the brand and our customer. Our leadership team is reorienting the organization around a clear priority. Our dealers are customer number one. When we enable our dealers to sell, customize, and service the motorcycles our riders want, everyone wins. I continue to spend significant time with dealers and riders, including attending a HOG chapter gathering in Milan as part of my visit to Europe. The pride those members took in showing me their Harley-Davidson motorcycles was contagious. It's clear our riders view their Harley as their individual motorcycle. Individual expression matters, and customization is central to that experience.
Artie Starrs: As I've discussed, we are in the early stages of a reset. We've made decisive changes, and the work underway across the organization is designed to rebuild momentum in the right way and for the long term. Turning to the brand and our customer. Our leadership team is reorienting the organization around a clear priority. Our dealers are customer number one. When we enable our dealers to sell, customize, and service the motorcycles our riders want, everyone wins. I continue to spend significant time with dealers and riders, including attending a HOG chapter gathering in Milan as part of my visit to Europe. The pride those members took in showing me their Harley-Davidson motorcycles was contagious. It's clear our riders view their Harley as their individual motorcycle. Individual expression matters, and customization is central to that experience.
Speaker #3: We have been too lax on our parts and accessories business in recent years, and that will change. This is what our riders want. It's a critical business for our dealers.
Speaker #3: It creates more opportunities for our world-class service technicians. And it is core to what HARLEY-DAVIDSON has always stood for. Going forward, our focus in this area will have two parts.
Speaker #3: Turning to the brand and our customer, our leadership team is reorienting the organization around a clear priority: our dealers, our customer number one. When we enable our dealers to sell, customize, and service the motorcycles, our riders want—everyone wins.
Speaker #3: Designing and building motorcycles that invite HARLEY-DAVIDSON customization and ensuring our supply chain can support that demand quickly and reliably. Brand storytelling has always been essential to what makes HARLEY-DAVIDSON HARLEY-DAVIDSON.
Speaker #3: I continue to spend significant time with dealers and riders, including attending a Hog Chapter gathering in Milan as part of my visit to Europe.
Speaker #3: The pride those members took in showing me their HARLEY-DAVIDSON motorcycles was contagious. It's clear our riders view their HARLEY as their individual motorcycle. Individual expression matters, and customization is central to that experience.
Speaker #3: At its core, our brand celebrates riders and the communities they create. In recent years, our work has been too serious and at times too dark.
Speaker #3: We have been too lax on our parts and accessories business in recent years, and that will change. This is what our riders want. It's a critical business for our dealers.
Artie Starrs: We have been too lax on our parts and accessories business in recent years, and that will change. This is what our riders want. It's a critical business for our dealers. It creates more opportunities for our world-class service technicians, and it is core to what Harley-Davidson has always stood for. Going forward, our focus in this area will have two parts: designing and building motorcycles that invite Harley-Davidson customization and ensuring our supply chain can support that demand quickly and reliably. Brand storytelling has always been essential to what makes Harley-Davidson, Harley-Davidson. At its core, our brand celebrates riders and the communities they create. In recent years, our work has been too serious and, at times, too dark. That's not who our riders are. When they ride and gather, our riders are joyful, passionate, and community creators.
Artie Starrs: We have been too lax on our parts and accessories business in recent years, and that will change. This is what our riders want. It's a critical business for our dealers. It creates more opportunities for our world-class service technicians, and it is core to what Harley-Davidson has always stood for. Going forward, our focus in this area will have two parts: designing and building motorcycles that invite Harley-Davidson customization and ensuring our supply chain can support that demand quickly and reliably. Brand storytelling has always been essential to what makes Harley-Davidson, Harley-Davidson. At its core, our brand celebrates riders and the communities they create. In recent years, our work has been too serious and, at times, too dark. That's not who our riders are. When they ride and gather, our riders are joyful, passionate, and community creators.
Speaker #3: That's not who our riders are. When they ride and gather, our riders are joyful, passionate, and community creators. I saw this firsthand at an 80th anniversary celebration for a dealership outside Paris, France, just a few weeks ago.
Speaker #3: It creates more opportunities for our world-class service technicians. And it is core to what HARLEY-DAVIDSON has always stood for: going forward, our focus in this area will have two parts.
Speaker #3: Riders shared stories of journeys they'd taken together, including one who proudly told me he had written all the way to our factory in York, Pennsylvania, and was wearing his York PA HARLEY-DAVIDSON gear while standing in Paris.
Speaker #3: Designing and building motorcycles that invite HARLEY-DAVIDSON customization and ensuring our supply chain can support that demand quickly and reliably. Brand storytelling has always been essential to what makes HARLEY-DAVIDSON HARLEY-DAVIDSON.
Speaker #3: You'll soon see more optimistic, joyful brand work from us. Advertising that celebrates our community in a uniquely HARLEY-DAVIDSON way. Turning to product, to better align aspiration with accessibility, we are actioning more breadth and flexibility in our portfolio.
Speaker #3: At its core, our brand celebrates riders and the communities they create. In recent years, our work has been too serious and at times too dark.
Speaker #3: That means being honest about where pricing and portfolio choices have limited our reach and making deliberate choices to widen the funnel in our core.
Speaker #3: That's not who our riders are. When they ride and gather, our riders are joyful, passionate, and community creators. I saw this firsthand at an 80th anniversary celebration for a dealership outside Paris, France, just a few weeks ago.
Speaker #3: My own interactions with dealers and riders over the past four months, in addition to customer research and recent retail trends, validate what our riders want.
Artie Starrs: I saw this firsthand at an 80th anniversary celebration for a dealership outside Paris, France, just a few weeks ago. Riders shared stories of journeys they'd taken together, including one who proudly told me he had ridden all the way to our factory in York, Pennsylvania, and was wearing his York PA Harley-Davidson gear while standing in Paris. You'll soon see more optimistic, joyful brand work from us, advertising that celebrates our community in a uniquely Harley-Davidson way.... Turning to product. To better align aspiration with accessibility, we are actioning more breadth and flexibility in our portfolio. That means being honest about where pricing and portfolio choices have limited our reach, and making deliberate choices to widen the funnel in our core. My own interactions with dealers and riders over the past 4 months, in addition to customer research and recent retail trends, validate what our riders want.
Artie Starrs: I saw this firsthand at an 80th anniversary celebration for a dealership outside Paris, France, just a few weeks ago. Riders shared stories of journeys they'd taken together, including one who proudly told me he had ridden all the way to our factory in York, Pennsylvania, and was wearing his York PA Harley-Davidson gear while standing in Paris. You'll soon see more optimistic, joyful brand work from us, advertising that celebrates our community in a uniquely Harley-Davidson way.... Turning to product. To better align aspiration with accessibility, we are actioning more breadth and flexibility in our portfolio. That means being honest about where pricing and portfolio choices have limited our reach, and making deliberate choices to widen the funnel in our core. My own interactions with dealers and riders over the past 4 months, in addition to customer research and recent retail trends, validate what our riders want.
Speaker #3: The look, sound, and feel of a HARLEY-DAVIDSON motorcycle coupled with the ability to customize their HARLEY to make it their own. The used market continues to reinforce the power of the brand, and a strong desire for customers to purchase our products.
Speaker #3: Riders shared stories of journeys they'd taken together, including one who proudly told me he had ridden all the way to our factory in York, Pennsylvania, and was wearing his York PA HARLEY-DAVIDSON gear while standing in Paris.
Speaker #3: You'll soon see more optimistic, joyful brand work from us. Advertising celebrates our community in a uniquely Harley-Davidson way. Turning to product, to better align aspiration with accessibility, we are actioning more breadth and flexibility in our portfolio.
Speaker #3: But at a price that is more aligned with today's economic realities. In fact, as we look at used auction activity, we feel enthused about recent demand trends and the positive impact they're having on used values, especially in HARLEY-DAVIDSON core softtail models.
Speaker #3: That means being honest about where pricing and portfolio choices have limited our reach and making deliberate choices to widen the funnel in our core.
Speaker #3: What's clear is that the portfolio actions taken over recent years have put the brand out of reach for some existing and potential riders. To win, it's clear we need to sharpen our product focus, not only creating the highest quality motorcycles that our riders want to ride, but doing so with a price in mind.
Speaker #3: My own interactions with dealers and riders over the past four months—in addition to customer research and recent retail trends—validate what our riders want. The look, sound, and feel of a HARLEY-DAVIDSON motorcycle coupled with the ability to customize their HARLEY to make it their own.
Artie Starrs: The look, sound, and feel of a Harley-Davidson motorcycle, coupled with the ability to customize their Harley to make it their own. The used market continues to reinforce the power of the brand and a strong desire for customers to purchase our products, but at a price that is more aligned with today's economic realities. In fact, as we look at used auction activity, we feel enthused about recent demand trends and the positive impact they're having on used values, especially in Harley-Davidson core Softail models. What's clear is that the portfolio actions taken over recent years have put the brand out of reach for some existing and potential riders. To win, it's clear we need to sharpen our product focus, not only creating the highest quality motorcycles that our riders want to ride, but doing so with a price in mind.
Artie Starrs: The look, sound, and feel of a Harley-Davidson motorcycle, coupled with the ability to customize their Harley to make it their own. The used market continues to reinforce the power of the brand and a strong desire for customers to purchase our products, but at a price that is more aligned with today's economic realities. In fact, as we look at used auction activity, we feel enthused about recent demand trends and the positive impact they're having on used values, especially in Harley-Davidson core Softail models. What's clear is that the portfolio actions taken over recent years have put the brand out of reach for some existing and potential riders. To win, it's clear we need to sharpen our product focus, not only creating the highest quality motorcycles that our riders want to ride, but doing so with a price in mind.
Speaker #3: are products that our dealers are excited We need to ensure that these about and able to sell at a profit level that works for them and for us.
Speaker #3: The used market continues to reinforce the power of the brand, and a strong desire for customers to purchase our products. But at a price that is more aligned with today's economic realities.
Speaker #3: Onto the team and our org structure. Execution requires the right team and structure. We've made targeted leadership team and organizational changes to strengthen our capabilities, across product, supply chain, marketing, technology, and brand.
Speaker #3: In fact, as we look at used auction activity, we feel enthused about recent demand trends and the positive impact they're having on used values, especially in HARLEY-DAVIDSON core softtail models.
Speaker #3: We've added back new perspectives and welcomed back proven leaders with deep knowledge of HARLEY-DAVIDSON's rider culture and community. Importantly, HARLEY-DAVIDSON should be a great place to work as well as a great business.
Speaker #3: What's clear is that the portfolio actions taken over recent years have put the brand out of reach for some existing and potential riders. To win, it's clear we need to sharpen our product focus, not only creating the highest quality motorcycles that our riders want to ride, but doing so with a price in mind.
Speaker #3: A strong corporate culture isn't just good for employee morale, it's good for business. Rebuilding our culture and identity as a Milwaukee icon truly matters.
Speaker #3: My direct reports are all working for Milwaukee at our Juno Avenue headquarters. And we will be formally reopening the office later this quarter. By going back to the bricks at our Juno Avenue headquarters, we are not only reigniting the cultural beat that has defined this company for over 120 years, but with these changes, we are improving decision-making speed, cross-functional collaboration, and critically, accountability.
Speaker #3: We need to ensure that these are products that our dealers are excited about and able to sell at a profit level that works for them and for us.
Artie Starrs: We need to ensure that these are products that our dealers are excited about and able to sell at a profit level that works for them and for us. Onto the team and our org structure. Execution requires the right team and structure. We've made targeted leadership team and organizational changes to strengthen our capabilities across product, supply chain, marketing, technology, and brand. We've added back new perspectives and welcomed back proven leaders with deep knowledge of Harley-Davidson's rider culture and community. Importantly, Harley-Davidson should be a great place to work as well as a great business. Strong corporate culture isn't just good for employee morale; it's good for business. Rebuilding our culture and identity as a Milwaukee icon truly matters. My direct reports are all working from Milwaukee at our Juneau Avenue headquarters, and we will be formally reopening the office later this quarter.
Artie Starrs: We need to ensure that these are products that our dealers are excited about and able to sell at a profit level that works for them and for us. Onto the team and our org structure. Execution requires the right team and structure. We've made targeted leadership team and organizational changes to strengthen our capabilities across product, supply chain, marketing, technology, and brand. We've added back new perspectives and welcomed back proven leaders with deep knowledge of Harley-Davidson's rider culture and community. Importantly, Harley-Davidson should be a great place to work as well as a great business. Strong corporate culture isn't just good for employee morale; it's good for business. Rebuilding our culture and identity as a Milwaukee icon truly matters. My direct reports are all working from Milwaukee at our Juneau Avenue headquarters, and we will be formally reopening the office later this quarter.
Speaker #3: Onto the team and our org structure. Execution requires the right team and structure. We've made targeted leadership team and organizational changes to strengthen our capabilities across product, supply chain, marketing, technology, and brand.
Speaker #3: I'm particularly pleased with how much more agile, nimble, and speedy our leadership team is becoming working shoulder to shoulder in Milwaukee. I'm excited to get our teams back to Juno in the coming months, it's an inspiring place to work.
Speaker #3: We've added back new perspectives and welcomed back proven leaders with deep knowledge of Harley-Davidson's rider culture and community. Importantly, Harley-Davidson should be a great place to work as well as a great business.
Speaker #3: A strong corporate culture isn't just good for employee morale, it's good for business. Rebuilding our culture and identity as a Milwaukee icon truly matters.
Speaker #3: Lastly, I'll touch on the financial actions we are taking to reposition the business for success. We are conducting a rigorous end-to-end review of our cost base and operating expenses, supported by third-party specialists.
Speaker #3: My direct reports are all working for Milwaukee at our Juno Avenue headquarters. And we will be formally reopening the office later this quarter. By going back to the bricks at our Juno Avenue headquarters, we are not only reigniting the cultural beat that has defined this company for over 120 years, but with these changes, we are improving decision-making speed, cross-functional collaboration, and critically, accountability.
Speaker #3: Our current corporate overhead manufacturing capacity and overall operating expenses are built for materially higher volumes than today's demand. And we will be addressing this mismatch head-on.
Artie Starrs: By going back to the bricks at our Juneau Avenue headquarters, we are not only reigniting the cultural beat that has defined this company for over 120 years, but with these changes, we are improving decision-making speed, cross-functional collaboration, and critically, accountability. I'm particularly pleased with how much more agile, nimble, and speedy our leadership team is becoming, working shoulder to shoulder in Milwaukee. I'm excited to get our teams back to Juneau in the coming months. It's an inspiring place to work. Lastly, I'll touch on the financial actions we are taking to reposition the business for success. We are conducting a rigorous end-to-end review of our cost base and operating expenses, supported by third-party specialists. Our current corporate overhead, manufacturing capacity, and overall operating expenses are built for materially higher volumes than today's demand, and we will be addressing this mismatch head-on.
Artie Starrs: By going back to the bricks at our Juneau Avenue headquarters, we are not only reigniting the cultural beat that has defined this company for over 120 years, but with these changes, we are improving decision-making speed, cross-functional collaboration, and critically, accountability. I'm particularly pleased with how much more agile, nimble, and speedy our leadership team is becoming, working shoulder to shoulder in Milwaukee. I'm excited to get our teams back to Juneau in the coming months. It's an inspiring place to work. Lastly, I'll touch on the financial actions we are taking to reposition the business for success. We are conducting a rigorous end-to-end review of our cost base and operating expenses, supported by third-party specialists. Our current corporate overhead, manufacturing capacity, and overall operating expenses are built for materially higher volumes than today's demand, and we will be addressing this mismatch head-on.
Speaker #3: May. However, on top of We will share more details in previously announced targets, we anticipate at least $150 million of annual run rate savings that will impact 2027 and beyond.
Speaker #3: I'm particularly pleased with how much more agile, nimble, and speedy our leadership team is becoming working shoulder to shoulder in Milwaukee. I'm excited to get our teams back to Juno in the coming months; it's an inspiring place to work.
Speaker #3: In Q4 2025, we renegotiated and funded the term loan with Livewire, reducing the principal to $75 million. Livewire is now working diligently to attract its own sources of capital to continue to finance its operations and future plans.
Speaker #3: Lastly, I'll touch on the financial actions we are taking to reposition the business for success. We are conducting a rigorous end-to-end review of our cost base and operating expenses, supported by third-party specialists.
Speaker #3: We remain excited about Livewire's newest motorcycle, the Honcho, soon to be in market later this year, well aligned with the evolution of the EV motorcycle category toward smaller, Mini Motos.
Speaker #3: Our current corporate overhead—manufacturing capacity and overall operating expenses—are built for materially higher volumes than today's demand. And we will be addressing this mismatch head-on.
Speaker #3: Turning to HDFS, the recent transaction has delivered meaningful capital benefits. We now expect to be able to run the HDFS business with less capital than has been tied to this business historically.
Speaker #3: We will share more details in May; however, on top of previously announced targets, we anticipate at least $150 million of annual run-rate savings that will impact 2027 and beyond.
Artie Starrs: We will share more details in May. However, on top of previously announced targets, we anticipate at least $150 million of annual run rate savings that will impact 2027 and beyond. In Q4 2025, we renegotiated and funded the term loan with LiveWire, reducing the principal to $75 million. LiveWire is now working diligently to attract its own sources of capital to continue to finance its operations and future plans. We remain excited about LiveWire's newest motorcycle, the Honcho, soon to be in market later this year, well aligned with the evolution of the EV motorcycle category toward smaller Minimotos. Turning to HDFS, the recent transaction has delivered meaningful capital benefits. We now expect to be able to run the HDFS business with less capital than has been tied to this business historically.
Artie Starrs: We will share more details in May. However, on top of previously announced targets, we anticipate at least $150 million of annual run rate savings that will impact 2027 and beyond. In Q4 2025, we renegotiated and funded the term loan with LiveWire, reducing the principal to $75 million. LiveWire is now working diligently to attract its own sources of capital to continue to finance its operations and future plans. We remain excited about LiveWire's newest motorcycle, the Honcho, soon to be in market later this year, well aligned with the evolution of the EV motorcycle category toward smaller Minimotos. Turning to HDFS, the recent transaction has delivered meaningful capital benefits. We now expect to be able to run the HDFS business with less capital than has been tied to this business historically.
Speaker #3: With these changes, we plan to take HDFS class-leading returns and deliver an even higher ROE than we did historically. And as HDFS's asset base rebuilds over the coming years, we expect to get back to earnings levels that run below historical HDFS will operate with significantly lower capital commitments and with funding support from two trusted partners.
Speaker #3: In Q4 2025, we renegotiated and funded the term loan with Livewire, reducing the principal to $75 million. Livewire is now working diligently to attract its own sources of capital to continue to finance its operations and future plans.
Speaker #3: We remain excited about Livewire's newest motorcycle, the Honcho, soon to be in market later this year, well aligned with the evolution of the EV motorcycle category toward smaller, Mini Motos.
Speaker #3: HDFS continues to be a strategic asset for HARLEY-DAVIDSON and a critical enabler for our dealer network. And we will talk more about HDFS strategically during our Q1 earnings call in May.
Speaker #3: Turning to HDFS, the recent transaction has delivered meaningful capital benefits. We now expect to be able to run the HDFS business with less capital than has been tied to this business historically.
Speaker #3: While a key priority remains returning excess capital to shareholders, we are currently evaluating the timing of our share buyback initiatives. In the near term, we expect to be measured in our approach to share repurchases while we finalize our strategic plan.
Speaker #3: With these changes, we plan to take HDFS class-leading returns and deliver an even higher ROE than we did historically. And as HDFS's asset base rebuilds over the coming years, we expect to get back to earnings levels that run below historical levels.
Artie Starrs: With these changes, we plan to take HDFS class-leading returns and deliver an even higher ROE than we did historically. And as HDFS's asset base rebuilds over the coming years, we expect to get back to earnings levels that run below historical levels. Going forward, HDFS will operate with significantly lower capital commitments and with funding support from two trusted partners. HDFS continues to be a strategic asset for Harley-Davidson and a critical enabler for our dealer network, and we will talk more about HDFS strategically during our Q1 earnings call in May. While a key priority remains returning excess capital to shareholders, we are currently evaluating the timing of our share buyback initiatives. In the near term, we expect to be measured in our approach to share repurchases while we finalize our strategic plan that we expect to announce in May.
Artie Starrs: With these changes, we plan to take HDFS class-leading returns and deliver an even higher ROE than we did historically. And as HDFS's asset base rebuilds over the coming years, we expect to get back to earnings levels that run below historical levels. Going forward, HDFS will operate with significantly lower capital commitments and with funding support from two trusted partners. HDFS continues to be a strategic asset for Harley-Davidson and a critical enabler for our dealer network, and we will talk more about HDFS strategically during our Q1 earnings call in May. While a key priority remains returning excess capital to shareholders, we are currently evaluating the timing of our share buyback initiatives. In the near term, we expect to be measured in our approach to share repurchases while we finalize our strategic plan that we expect to announce in May.
Speaker #3: And we expect to announce in May. Before I hand it over to Jonathan, I want to reiterate that HARLEY-DAVIDSON has an iconic brand, a loyal community, and a dealer network unlike any other.
Speaker #3: We are taking the hard necessary steps to stabilize the business and rebuild trust, which we believe will restore our long-term earnings power. The work is underway, execution is improving, and we are committed to delivering results.
Speaker #3: Going forward, HDFS will operate with significantly lower capital commitments and with funding support from two trusted partners. HDFS continues to be a strategic asset for Harley-Davidson and a critical enabler for our dealer network.
Speaker #3: Thank you. And now I'll hand it over to Jonathan.
Speaker #3: And we will talk more about HDFS strategically during our Q1 earnings call in May. While a key priority remains returning excess capital to shareholders, we are currently evaluating the timing of our share buyback initiatives.
Speaker #2: Thank you, Artie, and good morning to all. I plan to start on page four and five of the presentation, where I will briefly summarize the financial results for the fourth quarter and full year of 2025.
Speaker #2: Subsequently, I will go into further detail on each business segment. As a reminder, we closed what we call the HDFS transaction in Q4 at the end of October.
Speaker #3: In the near term, we expect to be measured in our approach to share repurchases while we finalize our strategic plan. And we expect to announce in May.
Speaker #2: The HDFS transaction is a strategic partnership with KKR and PIMCO that we expect will transform HARLEY-DAVIDSON financial services into a capital-light, also changes the financial profile de-risked business model.
Speaker #3: Before I hand it over to Jonathan, I want to reiterate that Harley-Davidson has an iconic brand, a loyal community, and a dealer network unlike any other.
Artie Starrs: Before I hand it over to Jonathan, I want to reiterate that Harley-Davidson has an iconic brand, a loyal community, and a dealer network unlike any other. We are taking the hard, necessary steps to stabilize the business and rebuild trust, which we believe will restore our long-term earnings power. The work is underway, execution is improving, and we are committed to delivering results. Thank you, and now I'll hand it over to Jonathan.
Artie Starrs: Before I hand it over to Jonathan, I want to reiterate that Harley-Davidson has an iconic brand, a loyal community, and a dealer network unlike any other. We are taking the hard, necessary steps to stabilize the business and rebuild trust, which we believe will restore our long-term earnings power. The work is underway, execution is improving, and we are committed to delivering results.
Speaker #3: We are taking the hard, necessary steps to stabilize the business and rebuild trust, which we believe will restore our long-term earnings power. The work is underway, execution is improving, and we are committed to delivering results.
Speaker #2: It of HDFS starting in Q4 of '25 and affords a high degree of optionality in how we fund and run that business. As Artie cited earlier, the financial results in 2025 have come under pressure in the current, challenging operating environment.
Speaker #3: Thank you, and now I'll hand it over to
Speaker #3: Jonathan. Thank you, Artie, and
Artie Starrs: Thank you, and now I'll hand it over to Jonathan.
Speaker #2: good morning to all. I plan to start on page 4 and 5 of the presentation, where I will briefly summarize the financial results for the fourth quarter and full year of 2025.
Jonathan Root: Thank you, Artie, and good morning to all. I plan to start on page 4 and 5 of the presentation, where I will briefly summarize the financial results for the fourth quarter and full year of 2025. Subsequently, I will go into further detail on each business segment. As a reminder, we closed what we call the HDFS transaction in Q4 at the end of October. The HDFS transaction is a strategic partnership with KKR and PIMCO that we expect will transform Harley-Davidson Financial Services into a capital light, de-risked business model. It also changes the financial profile of HDFS starting in Q4 of 2025, and affords a high degree of optionality in how we fund and run that business. As already cited earlier, the financial results in 2025 have come under pressure in the current challenging operating environment.
Jonathan Root: Thank you, Artie, and good morning to all. I plan to start on page 4 and 5 of the presentation, where I will briefly summarize the financial results for the fourth quarter and full year of 2025. Subsequently, I will go into further detail on each business segment. As a reminder, we closed what we call the HDFS transaction in Q4 at the end of October. The HDFS transaction is a strategic partnership with KKR and PIMCO that we expect will transform Harley-Davidson Financial Services into a capital light, de-risked business model. It also changes the financial profile of HDFS starting in Q4 of 2025, and affords a high degree of optionality in how we fund and run that business. As already cited earlier, the financial results in 2025 have come under pressure in the current challenging operating environment.
Speaker #2: We have moved immediately to make inventory management and discipline a central focus to resetting the business. This is evident in Q4 results and will continue to be a central priority as we move forward.
Speaker #2: Subsequently, I will go into further detail on each business segment. As a reminder, we closed what we call the HDFS transaction in Q4 at the end of October.
Speaker #2: Let me start with consolidated financial results for the fourth quarter of 2025. Consolidated revenue in the fourth quarter was down 28%, driven by both HDMC revenue being down 10% and by HDFS revenue being down 59%.
Speaker #2: The HDFS transaction is a strategic partnership with KKR and PIMCO that we expect will transform HARLEY-DAVIDSON financial services into a capital-light, de-risked business model.
Speaker #2: Consolidated operating income in the fourth quarter came in at a loss of $361 million. Compared to an operating loss of $193 million, in Q4 of 2024, this was driven by an operating loss of $260 million at HDMC and an operating loss of $82 million at HDFS.
Speaker #2: It also changes the financial profile of HDFS starting in Q4 of '25 and affords a high degree of optionality in how we fund and run that business.
Speaker #2: As Artie cited earlier, the financial results in 2025 have come under pressure in the current, challenging operating environment. We have moved immediately to make inventory management and discipline a central focus to resetting the business.
Speaker #2: The loss at HDFS was driven by costs associated with liability management activities related to the HDFS transaction where we retired a significant portion of HDFS debt in Q4 of '25.
Jonathan Root: We have moved immediately to make inventory management and discipline a central focus to resetting the business. This is evident in Q4 results and will continue to be a central priority as we move forward. Let me start with consolidated financial results for the fourth quarter of 2025. Consolidated revenue in the fourth quarter was down 28%, driven by both HDMC revenue being down 10% and by HDFS revenue being down 59%. Consolidated operating income in the fourth quarter came in at a loss of $361 million, compared to an operating loss of $193 million in Q4 of 2024. This was driven by an operating loss of $260 million at HDMC and an operating loss of $82 million at HDFS.
Jonathan Root: We have moved immediately to make inventory management and discipline a central focus to resetting the business. This is evident in Q4 results and will continue to be a central priority as we move forward. Let me start with consolidated financial results for the fourth quarter of 2025. Consolidated revenue in the fourth quarter was down 28%, driven by both HDMC revenue being down 10% and by HDFS revenue being down 59%. Consolidated operating income in the fourth quarter came in at a loss of $361 million, compared to an operating loss of $193 million in Q4 of 2024. This was driven by an operating loss of $260 million at HDMC and an operating loss of $82 million at HDFS.
Speaker #2: This is evident in Q4 results and will continue to be a central priority as we move forward. Let me start with consolidated financial results for the fourth quarter of 2025.
Speaker #2: The operating loss at Livewire was $18 million. Which was in line with our expectations and $8 million favorable to a year ago. In Q4, earnings per share was a loss of $2.44, which compares to a loss of $93 in Q4 of 2024.
Speaker #2: Consolidated revenue in the fourth quarter was down 28%, driven by both HDMC revenue being down 10% and by HDFS revenue being down 59%. Consolidated operating income in the fourth quarter came in at a loss of $361 million, compared to an operating loss of $193 million, in Q4 of 2024.
Speaker #2: Turning to full year 2025, consolidated financial results on page five. Consolidated revenue of $4.5 billion was 14% lower compared to last year while consolidated operating income of $387 million compares to $417 million in full year 2024.
Speaker #2: This was driven by an operating loss of $260 million at HDMC and an operating loss of $82 million at HDFS. The loss at HDFS was driven by costs associated with liability management activities related to the HDFS transaction, where we retired a significant portion of HDFS debt in Q4 of '25.
Jonathan Root: The loss at HDFS was driven by costs associated with liability management activities related to the HDFS transaction, where we retired a significant portion of HDFS debt in Q4 of 2025. The operating loss at LiveWire was $18 million, which was in line with our expectations, and $8 million favorable to a year ago. In Q4, earnings per share was a loss of $2.44, which compares to a loss of $0.93 in Q4 of 2024. Turning to full year 2025, consolidated financial results on page 5. Consolidated revenue of $4.5 billion was 14% lower compared to last year, while consolidated operating income of $387 million compares to $417 million in full year 2024.
Jonathan Root: The loss at HDFS was driven by costs associated with liability management activities related to the HDFS transaction, where we retired a significant portion of HDFS debt in Q4 of 2025. The operating loss at LiveWire was $18 million, which was in line with our expectations, and $8 million favorable to a year ago. In Q4, earnings per share was a loss of $2.44, which compares to a loss of $0.93 in Q4 of 2024. Turning to full year 2025, consolidated financial results on page 5. Consolidated revenue of $4.5 billion was 14% lower compared to last year, while consolidated operating income of $387 million compares to $417 million in full year 2024.
Speaker #2: For the full year 2025, earnings per share was $2.78 and compares to $3.44 in full year 2024. Now, turning to page six in HDMC retail performance.
Speaker #2: The operating loss at Livewire was $18 million, which was in line with our expectations and $8 million favorable to a year ago. In Q4, earnings per share was a loss of $2.44, which compares to a loss of $93 in Q4 of 2024.
Speaker #2: As Artie already mentioned, in Q4, North American Retail Sales of New Motorcycles were up 5% with 15,847 motorcycles. Versus prior year. In Q4, international retail sales of new motorcycles were down 10% with 9,440 motorcycles versus prior year.
Speaker #2: Turning to full year 2025, consolidated financial results on page 5. Consolidated revenue of $4.5 billion, was 14% lower compared to last year while consolidated operating income of $387 million compares to $417 million in full year 2024.
Speaker #2: Resulting in Q4 global retail sales of new motorcycles being down 1%. At 25,287 motorcycles, versus prior year. The choppiness and volatility in global retail results is a continuation of what we have observed since mid-2024 with a difficult global backdrop in big-ticket discretionary sectors.
Speaker #2: For the full year 2025, earnings per share was $2.78 and compares to $3.44 in full year 2024. Now, turning to page 6 in HDMC retail performance.
Jonathan Root: For the full year 2025, earnings per share was $2.78, and compares to $3.44 in full year 2024. Now, turning to page 6 in HDMC retail performance. As I already mentioned, in Q4, North American retail sales of new motorcycles were up 5%, with 15,847 motorcycles versus prior year. In Q4, international retail sales of new motorcycles were down 10%, with 9,440 motorcycles versus prior year, resulting in Q4 global retail sales of new motorcycles being down 1% at 25,287 motorcycles versus prior year. The choppiness and volatility in global retail results is a continuation of what we have observed since mid-2024, with a difficult global backdrop in big-ticket discretionary sectors.
Jonathan Root: For the full year 2025, earnings per share was $2.78, and compares to $3.44 in full year 2024. Now, turning to page 6 in HDMC retail performance. As I already mentioned, in Q4, North American retail sales of new motorcycles were up 5%, with 15,847 motorcycles versus prior year. In Q4, international retail sales of new motorcycles were down 10%, with 9,440 motorcycles versus prior year, resulting in Q4 global retail sales of new motorcycles being down 1% at 25,287 motorcycles versus prior year. The choppiness and volatility in global retail results is a continuation of what we have observed since mid-2024, with a difficult global backdrop in big-ticket discretionary sectors.
Speaker #2: Pricing continues to be on the top of customers' minds given the current global setup that includes inflationary pressures and interest rates that continue to run above recent historical lows.
Speaker #2: As Artie already mentioned, in Q4, North American retail sales of new motorcycles were up 5%, with 15,847 motorcycles versus prior year. In Q4, international retail sales of new motorcycles were down 10%, with 9,440 motorcycles versus prior year.
Speaker #2: In North America, Q4 retail sales were up 5% where US retail sales were up 6% and Canada retail sales were down 7%. For the full year 2025, North America retail sales were down 13%.
Speaker #2: Resulting in Q4 global retail sales of new motorcycles being down 1%. At 25,287 motorcycles, versus prior year. The choppiness and volatility in global retail results is a continuation of what we have observed since mid-2024, with a difficult global backdrop in big-ticket discretionary sectors.
Speaker #2: In the quarter, we experienced strength in our Grand American Touring product up 6% driven by the promotional support in the marketplace. We also saw strength in lower-priced sport motorcycle models up 33% as the updated pricing and marketing resonated with our dealers and customers.
Speaker #2: Within Grand American Touring, Trike was down 24% on very tight inventory availability in advance of the January 2026 new Trike launch. In EMEA, Q4 retail sales declined by 24% driven by weakness across the region and different bike families.
Speaker #2: Pricing continues to be on the top of customers' minds given the current global setup that includes inflationary pressures and interest rates that continue to run above recent historical lows.
Jonathan Root: Pricing continues to be on the top of customers' minds, given the current global setup that includes inflationary pressures and interest rates that continue to run above recent historical lows. In North America, Q4 retail sales were up 5%, where US retail sales were up 6% and Canada retail sales were down 7%. For the full year 2025, North America retail sales were down 13%. In the quarter, we experienced strength in our Grand American Touring product, up 6%, driven by the promotional support in the marketplace. We also saw strength in lower priced sport motorcycle models, up 33%, as the updated pricing and marketing resonated with our dealers and customers. Within Grand American Touring, Trike was down 24% on very tight inventory availability in advance of the January 2026 new Trike launch.
Jonathan Root: Pricing continues to be on the top of customers' minds, given the current global setup that includes inflationary pressures and interest rates that continue to run above recent historical lows. In North America, Q4 retail sales were up 5%, where US retail sales were up 6% and Canada retail sales were down 7%. For the full year 2025, North America retail sales were down 13%. In the quarter, we experienced strength in our Grand American Touring product, up 6%, driven by the promotional support in the marketplace. We also saw strength in lower priced sport motorcycle models, up 33%, as the updated pricing and marketing resonated with our dealers and customers. Within Grand American Touring, Trike was down 24% on very tight inventory availability in advance of the January 2026 new Trike launch.
Speaker #2: Q4 retail sales were up In North America, 5%, where US retail sales were up 6%, and Canada retail sales were down 7%. For the full year 2025, North America retail sales were down 13%.
Speaker #2: EMEA continued to be adversely impacted by overall macroeconomic conditions. For the full year 2025, EMEA retail sales were down 11%. In the quarter, we experienced the most weakness in the touring and softtail categories.
Speaker #2: In the quarter, we experienced strength in our Grand American Touring product, up 6%, driven by the promotional support in the marketplace. We also saw strength in lower-priced sport motorcycle models, up 33%, as the updated pricing and marketing resonated with our dealers and customers.
Speaker #2: In Asia Pacific, Q4 retail sales declined by 1%, which was a significant improvement from the first half of 2025. And mostly attributed to a continued challenging environment in China which was down meaningfully.
Speaker #2: The Q4 retail sales included positive results in Japan and Asia Emerging Markets. For the full year 2025, Asia Pacific retail sales were down 15% and the softness was most acute in China for the full year and Japan for the first half of 2025.
Speaker #2: Within Grand American Touring, Trike was down 24% on very tight inventory availability in advance of the January 2026 new Trike launch. In EMEA, Q4 retail sales declined by 24%, driven by weakness across the region and different bike families.
Jonathan Root: In EMEA, Q4 retail sales declined by 24%, driven by weakness across the region and different bike families. EMEA continued to be adversely impacted by overall macroeconomic conditions. For the full year 2025, EMEA retail sales were down 11%. In the quarter, we experienced the most weakness in the Touring and Softail categories. In Asia Pacific, Q4 retail sales declined by 1%, which was a significant improvement from the first half of 2025, and mostly attributed to a continued challenging environment in China, which was down meaningfully. The Q4 retail sales included positive results in Japan, and Asia emerging markets. For the full year 2025, Asia Pacific retail sales were down 15%, and the softness was most acute in China for the full year, and Japan for the first half of 2025.
Jonathan Root: In EMEA, Q4 retail sales declined by 24%, driven by weakness across the region and different bike families. EMEA continued to be adversely impacted by overall macroeconomic conditions. For the full year 2025, EMEA retail sales were down 11%. In the quarter, we experienced the most weakness in the Touring and Softail categories. In Asia Pacific, Q4 retail sales declined by 1%, which was a significant improvement from the first half of 2025, and mostly attributed to a continued challenging environment in China, which was down meaningfully. The Q4 retail sales included positive results in Japan, and Asia emerging markets. For the full year 2025, Asia Pacific retail sales were down 15%, and the softness was most acute in China for the full year, and Japan for the first half of 2025.
Speaker #2: EMEA continued to be adversely impacted by overall macroeconomic conditions. For the full year 2025, EMEA retail sales were down 11%. In the quarter, we experienced the most weakness in the touring and softtail categories.
Speaker #2: In the quarter, we saw retail strength across all families except for sport and lightweight motorcycles which still had a combined inventory down nearly 30%.
Speaker #2: In Latin America, Q4 retail sales increased by 10% where both Brazil, our largest Latin American market, and Mexico were up. While other Latin American countries were down modestly, year over year.
Speaker #2: In Asia Pacific, Q4 retail sales declined by 1%, which was a significant improvement from the first half of 2025, and mostly attributed to a continued challenging environment in China, which was down meaningfully.
Speaker #2: For the full year 2025, Latin American retail sales were up 2% where both Brazil and Mexico were up. For the full year 2025, global retail sales of new motorcycles were down 12% versus the prior year where both North America and international markets turned in a similar performance.
Speaker #2: The Q4 retail sales included positive results in Japan, and Asia Emerging Markets. For the full year 2025, Asia Pacific retail sales were down 15%, and the softness was most acute in China for the full year, and Japan for the first half of 2025.
Speaker #2: As Artie mentioned earlier, dealer inventory at the end of Q4 was down 17% versus the end of Q4 in the prior year. This compares to our stated goal at the beginning of 2025 of reducing dealer inventory by 10%.
Speaker #2: In the quarter, we saw retail strength across all families except for sport and lightweight motorcycles, which still had a combined inventory down nearly 30%.
Jonathan Root: In the quarter, we saw retail strength across all families except for sport and lightweight motorcycles, which still had a combined inventory down nearly 30%. In Latin America, Q4 retail sales increased by 10%, where both Brazil, our largest Latin American market, and Mexico were up, while other Latin American countries were down modestly year over year. For the full year 2025, Latin American retail sales were up 2%, where both Brazil and Mexico were up. For the full year 2025, global retail sales of new motorcycles were down 12% versus the prior year, where both North America and international markets turned in a similar performance. As already mentioned earlier, dealer inventory at the end of Q4 was down 17% versus the end of Q4 in the prior year.
Jonathan Root: In the quarter, we saw retail strength across all families except for sport and lightweight motorcycles, which still had a combined inventory down nearly 30%. In Latin America, Q4 retail sales increased by 10%, where both Brazil, our largest Latin American market, and Mexico were up, while other Latin American countries were down modestly year over year. For the full year 2025, Latin American retail sales were up 2%, where both Brazil and Mexico were up. For the full year 2025, global retail sales of new motorcycles were down 12% versus the prior year, where both North America and international markets turned in a similar performance. As already mentioned earlier, dealer inventory at the end of Q4 was down 17% versus the end of Q4 in the prior year.
Speaker #2: North America dealer inventory ended down 16% and international dealer inventory ended down 20% with the regions coming in between down 19 to down 23%.
Speaker #2: In Latin America, Q4 retail sales increased by 10%, where both Brazil, our largest Latin American market, and Mexico were up, while other Latin American countries were down modestly, year over year.
Speaker #2: This allows Harley-Davidson dealers to start the 2026 riding season much cleaner and with an appropriate setup as we look at the coming quarters. As discussed, we specifically focused on assisting dealers to reduce touring motorcycle inventory in North America as the market displayed its price and value sensitivity.
Speaker #2: Latin American retail sales were up for the full year 2025, 2%, where both Brazil and Mexico were up. For the full year 2025, global retail sales of new motorcycles were down 12% versus the prior year, where both North America and international markets turned in a similar performance.
Speaker #2: Let me briefly touch upon incentive and promotional spend within the current environment. In Q4, we selectively provided incentive and promotional support to Harley-Davidson dealers in the form of interest rate assistance, low APR, customer cash, and dealer cash credit.
Speaker #2: As Artie mentioned earlier, dealer inventory at the end of Q4 was down 17% versus the end of Q4 in the prior year. This compares to our stated goal at the beginning of 2025 of reducing dealer inventory by 10%.
Jonathan Root: This compares to our stated goal at the beginning of 2025 of reducing dealer inventory by 10%. North America dealer inventory ended down 16%, and international dealer inventory ended down 20%, with the regions coming in between down 19% to down 23%. This allows Harley-Davidson dealers to start the 2026 riding season much cleaner and with an appropriate setup as we look at the coming quarters. As discussed, we specifically focused on assisting dealers to reduce touring motorcycle inventory in North America as the market displayed its price and value sensitivity. Let me briefly touch upon incentive and promotional spend within the current environment. In Q4, we selectively provided incentive and promotional support to Harley-Davidson dealers in the form of interest rate assistance, low APR, customer cash, and dealer cash credit.
Jonathan Root: This compares to our stated goal at the beginning of 2025 of reducing dealer inventory by 10%. North America dealer inventory ended down 16%, and international dealer inventory ended down 20%, with the regions coming in between down 19% to down 23%. This allows Harley-Davidson dealers to start the 2026 riding season much cleaner and with an appropriate setup as we look at the coming quarters. As discussed, we specifically focused on assisting dealers to reduce touring motorcycle inventory in North America as the market displayed its price and value sensitivity. Let me briefly touch upon incentive and promotional spend within the current environment. In Q4, we selectively provided incentive and promotional support to Harley-Davidson dealers in the form of interest rate assistance, low APR, customer cash, and dealer cash credit.
Speaker #2: North America dealer inventory ended down 16%, and international dealer inventory ended down 20%, with the region's coming in between down 19 to down 23%.
Speaker #2: As I covered last quarter and already mentioned earlier, dealers have more touring inventory in the channel than is desired. And while we have made progress in Q4, we still have more work to do.
Speaker #2: This allows Harley-Davidson dealers to start the 2026 riding season much cleaner and with an appropriate setup as we look at the coming quarters. As discussed, we specifically focused on assisting dealers to reduce touring motorcycle inventory in North America as the market displayed its price and value sensitivity.
Speaker #2: Based upon discussions with our dealers in December of 2025, we determined to continue with consumer promotions into Q1 of 2026 in order to work through these units and therefore we have taken a cruel in our Q4 2025 financials.
Speaker #2: Again, we expect this will help us get out of the gate stronger in 2026 to help drive retail performance. Now, turning to page seven in HDMC revenue performance.
Speaker #2: Let me briefly touch upon incentive and promotional spend within the current environment. In Q4, we selectively provided incentive and promotional support to Harley-Davidson dealers in the form of interest rate assistance, low APR, customer cash, and dealer cash credit.
Speaker #2: In Q4, HDMC revenue decreased by 10% coming in at $379 million. Where the biggest drivers of the decline included net pricing and incentive spend and decreased wholesale volumes.
Speaker #2: As I covered last quarter and already mentioned earlier, dealers have more touring inventory in the channel than is desired, and while we have made progress in Q4, we still have more work to do.
Jonathan Root: As I covered last quarter and already mentioned earlier, dealers have more touring inventory in the channel than is desired, and while we have made progress in Q4, we still have more work to do. Based upon discussions with our dealers in December 2025, we determined to continue with consumer promotions into Q1 of 2026 in order to work through these units, and therefore, we have taken accrual in our Q4 2025 financials. Again, we expect this will help us get out of the gate stronger in 2026 to help drive retail performance. Now, turning to page 7, and HDMC revenue performance. In Q4, HDMC revenue decreased by 10%, coming in at $379 million, where the biggest drivers of the decline included net pricing, incentive spend, and decreased wholesale volumes.
Jonathan Root: As I covered last quarter and already mentioned earlier, dealers have more touring inventory in the channel than is desired, and while we have made progress in Q4, we still have more work to do. Based upon discussions with our dealers in December 2025, we determined to continue with consumer promotions into Q1 of 2026 in order to work through these units, and therefore, we have taken accrual in our Q4 2025 financials. Again, we expect this will help us get out of the gate stronger in 2026 to help drive retail performance. Now, turning to page 7, and HDMC revenue performance. In Q4, HDMC revenue decreased by 10%, coming in at $379 million, where the biggest drivers of the decline included net pricing, incentive spend, and decreased wholesale volumes.
Speaker #2: For the full year 2025, HDMC revenue decreased by 13% coming in at $3.6 billion. Where the biggest driver of the decline was decreased wholesale volumes where we shipped around 125,000 motorcycles down 16% from the prior year.
Speaker #2: Based upon discussions with our dealers in December of 2025, we determined to continue with consumer promotions into Q1 of 2026 in order to work through these units and therefore we have taken a cruel in our Q4 2025 financials.
Speaker #2: While net pricing was largely flat on the year. Now, turning to page eight in HDMC margin performance. In Q4, HDMC gross profit came in at a loss of $30 million.
Speaker #2: Again, we expect this will help us get out of the gate stronger in 2026 to help drive retail performance. Now, turning to page 7 in HDMC revenue performance.
Speaker #2: Which compares to a loss of $3 million in the prior year. Q4 is typically our lowest gross margin quarter due to seasonality and model year changeover.
Speaker #2: In Q4, HDMC revenue decreased by 10%, coming in at $379 million. Where the biggest drivers of the decline included net pricing and incentive spend, and decreased wholesale volumes.
Speaker #2: The year over year decrease was driven by the negative impacts from increased tariff costs and net pricing and incentive spend while partially offset by the positive impacts from manufacturing costs including leverage and favorable foreign exchange.
Speaker #2: the full year For 2025, HDMC revenue decreased by 13%, coming in at $3.6 billion. Where the biggest driver of the decline was decreased wholesale volumes, where we shift around $125,000 motorcycles down 16% from the prior year, while net pricing was largely flat on the year.
Jonathan Root: For the full year 2025, HDMC revenue decreased by 13%, coming in at $3.6 billion, where the biggest driver of the decline was decreased wholesale volumes, where we shipped around 125,000 motorcycles, down 16% from the prior year, while net pricing was largely flat on the year. Now, turning to page 8 in HDMC margin performance. In Q4, HDMC gross profit came in at a loss of $30 million, which compares to a loss of $3 million in the prior year. Q4 is typically our lowest gross margin quarter due to seasonality and model year changeover. The year-over-year decrease was driven by the negative impacts from increased tariff costs, net pricing, and incentive spend, while partially offset by the positive impacts from manufacturing costs, including leverage and favorable foreign exchange.
Jonathan Root: For the full year 2025, HDMC revenue decreased by 13%, coming in at $3.6 billion, where the biggest driver of the decline was decreased wholesale volumes, where we shipped around 125,000 motorcycles, down 16% from the prior year, while net pricing was largely flat on the year. Now, turning to page 8 in HDMC margin performance. In Q4, HDMC gross profit came in at a loss of $30 million, which compares to a loss of $3 million in the prior year. Q4 is typically our lowest gross margin quarter due to seasonality and model year changeover. The year-over-year decrease was driven by the negative impacts from increased tariff costs, net pricing, and incentive spend, while partially offset by the positive impacts from manufacturing costs, including leverage and favorable foreign exchange.
Speaker #2: In Q4, operating expenses totaled $230 million. Which was $19 million higher compared to prior year or 9% due to greater marketing spend with the introduction of the North America focused marketing development fund for our dealers.
Speaker #2: Now, turning to page 8 in HDMC margin performance. In Q4, HDMC gross profit came in at a loss of $30 million, which compares to a loss of $3 million in the prior year.
Speaker #2: In Q4, HDMC had an operating loss of $260 million. Which compares to an operating loss of $214 million. In the prior year period. Turning our attention to full year 2025 margins.
Speaker #2: Q4 is typically our lowest gross margin quarter due to seasonality and model year changeover. The year-over-year decrease was driven by the negative impacts from increased tariff costs, and net pricing and incentive spend, while partially offset by the positive impacts from manufacturing costs, including leverage, and favorable foreign exchange.
Speaker #2: For the full year 2025, HDMC gross margin was 24.2% which compares to 28% in the prior year. The decrease of $380 basis points was driven by the negative impacts from incremental tariffs in calendar year 2025.
Speaker #2: Which we will cover on the next slide. Negative operating leverage and lower volumes. These impacts were partially offset by the positive performance from lower supply management and logistics costs.
Speaker #2: Q4 operating expenses totaled $230 million, which was $19 million higher compared to the prior year, or 9%, due to greater marketing spend with the introduction of the North America-focused Marketing Development Fund for our dealers.
Jonathan Root: In Q4, operating expenses totaled $230 million, which was $19 million higher compared to prior year, or 9%, due to greater marketing spend, with the introduction of the North America-focused Marketing Development Fund for our dealers. In Q4, HDMC had an operating loss of $260 million, which compares to an operating loss of $214 million in the prior year period. Turning our attention to full year 2025 margins. For the full year 2025, HDMC gross margin was 24.2%, which compares to 28% in the prior year. The decrease of 380 basis points was driven by the negative impacts from incremental tariffs in calendar year 2025, which we will cover on the next slide, negative operating leverage, and lower volumes.
Jonathan Root: In Q4, operating expenses totaled $230 million, which was $19 million higher compared to prior year, or 9%, due to greater marketing spend, with the introduction of the North America-focused Marketing Development Fund for our dealers. In Q4, HDMC had an operating loss of $260 million, which compares to an operating loss of $214 million in the prior year period. Turning our attention to full year 2025 margins. For the full year 2025, HDMC gross margin was 24.2%, which compares to 28% in the prior year. The decrease of 380 basis points was driven by the negative impacts from incremental tariffs in calendar year 2025, which we will cover on the next slide, negative operating leverage, and lower volumes.
Speaker #2: Favorable mix foreign exchange and net pricing was largely flat for the full year. Lastly, for the full year of 2025, operating expenses came in at $895 million.
Speaker #2: In Q4, HDMC had an operating loss of $260 million, which compares to an operating loss of $214 million in the prior year period. Turning our attention to full-year 2025 margins.
Speaker #2: Which were higher by $18 million due primarily to the marketing development fund mentioned previously. For the full HDMC operating income was a loss of $29 million.
Speaker #2: For the full year 2025, HDMC gross margin was 24.2%, which compares to 28% in the prior year. The decrease of $380 basis points was driven by the negative impacts from incremental tariffs in calendar year 2025, which we will cover on the next slide.
Speaker #2: Which compares to operating income of $278 million. For the full year 2024. Turning to slide 12. In 2025, the global tariff environment was more volatile and uncertain than we had expected at the beginning of the year.
Speaker #2: Negative operating leverage, and lower volumes. These impacts were partially offset by the positive performance from lower supply management and logistics costs. Favorable mix, foreign exchange, and net pricing was largely flat for the full year.
Speaker #2: In Q4 of 2025, the cost of new or increased tariffs was $22 million. And for the full year of 2025, the cost of new or increased tariffs was $67 million.
Jonathan Root: These impacts were partially offset by the positive performance from lower supply management and logistics costs, favorable mix, foreign exchange, and net pricing, which was largely flat for the full year. Lastly, for the full year of 2025, operating expenses came in at $895 million, which were higher by $18 million, due primarily to the Marketing Development Fund mentioned previously. For the full year 2025, HDMC operating income was a loss of $29 million, which compares to operating income of $278 million for the full year 2024. Turning to slide 12. In 2025, the global tariff environment was more volatile and uncertain than we had expected at the beginning of the year.
Jonathan Root: These impacts were partially offset by the positive performance from lower supply management and logistics costs, favorable mix, foreign exchange, and net pricing, which was largely flat for the full year. Lastly, for the full year of 2025, operating expenses came in at $895 million, which were higher by $18 million, due primarily to the Marketing Development Fund mentioned previously. For the full year 2025, HDMC operating income was a loss of $29 million, which compares to operating income of $278 million for the full year 2024. Turning to slide 12. In 2025, the global tariff environment was more volatile and uncertain than we had expected at the beginning of the year.
Speaker #2: Lastly, for the full year of 2025, operating expenses came in at $895 million. Which were higher by $18 million due primarily to the marketing development fund mentioned previously.
Speaker #2: This included direct tariff exposure. Harley-Davidson importing and exporting product as well as indirect tariff exposure from suppliers. This excluded pricing mitigation actions as well as operational costs relating to new or increased tariffs.
Speaker #2: For the full year 2025, HDMC operating income was a loss of $29 million, which compares to operating income of $278 million for the full year 2024.
Speaker #2: Harley-Davidson is a business very centered in and around the United States. Three of our four manufacturing centers are US-based and 100% of our US core product is manufactured in the US.
Speaker #2: Turning to slide 12. In 2025, the global tariff environment was more volatile and uncertain than we had expected at the beginning of the year.
Speaker #2: We also have a US-centric approach to sourcing with approximately 75% of component purchasing coming from the US. We have a number of actions underway to mitigate the impact and we expect this situation will remain fluid.
Speaker #2: In Q4 of 2025, the cost of new or increased tariffs was $22 million. And for the full year of 2025, the cost of new or increased tariffs was $67 million.
Jonathan Root: In Q4 of 2025, the cost of new or increased tariffs was $22 million, and for the full year of 2025, the cost of new or increased tariffs was $67 million. This included direct tariff exposure, Harley-Davidson importing and exporting product, as well as indirect tariff exposure from suppliers. This excluded pricing mitigation actions as well as operational costs relating to new or increased tariffs. Harley-Davidson is a business very centered in and around the United States. three of our four manufacturing centers are US-based, and 100% of our US core product is manufactured in the US. We also have a US-centric approach to sourcing, with approximately 75% of component purchasing coming from the US. We have a number of actions underway to mitigate the impact, and we expect this situation will remain fluid given the uncertainty that still exists.
Jonathan Root: In Q4 of 2025, the cost of new or increased tariffs was $22 million, and for the full year of 2025, the cost of new or increased tariffs was $67 million. This included direct tariff exposure, Harley-Davidson importing and exporting product, as well as indirect tariff exposure from suppliers. This excluded pricing mitigation actions as well as operational costs relating to new or increased tariffs. Harley-Davidson is a business very centered in and around the United States. three of our four manufacturing centers are US-based, and 100% of our US core product is manufactured in the US. We also have a US-centric approach to sourcing, with approximately 75% of component purchasing coming from the US. We have a number of actions underway to mitigate the impact, and we expect this situation will remain fluid given the uncertainty that still exists.
Speaker #2: Given the uncertainty that still exists. As mentioned earlier, we closed the HDFS transaction in Q4 at the end of October. Just to restate or recap what we talked about in greater detail on the last earnings call, the HDFS transaction includes three key components.
Speaker #2: This included direct tariff exposure, Harley-Davidson importing and exporting product, as well as indirect tariff exposure from suppliers. This excluded pricing mitigation actions, as well as operational costs, relating to new or increased tariffs.
Speaker #2: Backbook sales, sale of approximately $6 billion of existing HDFS loan receivables. Forward flow agreement, the sale of future HDFS loan originations. And the sale of equity interests, sale of a $9.8% common equity interest in HDFS to KKR and PIMCO.
Speaker #2: Harley-Davidson is a business very centered in and around the United States. Three of our four manufacturing centers are US-based, and 100% of our US core product is manufactured in the US.
Speaker #2: We also have a US-centric approach to sourcing, with approximately 75% of component purchasing coming from the US. We have a number of actions underway to mitigate the impact and we expect this situation will remain fluid given the uncertainty that still exists.
Speaker #2: In the fourth quarter, we retired a significant portion of HDFS debt, which resulted in some discrete costs. These discrete liability management costs were $73 million.
Speaker #2: In Q4, while the full year results were record high earnings for HDFS, Q4 of '25 resulted in an operating loss of $82 million. For HDFS, let me provide some greater detail.
Speaker #2: As mentioned earlier, we closed the HDFS transaction in Q4 at the end of October. Just to restate or recap what we talked about in greater detail on the last earnings call, the HDFS transaction includes three key components.
Jonathan Root: As mentioned earlier, we closed the HDFS transaction in Q4 at the end of October. Just to restate or recap what we talked about in greater detail on the last earnings call, the HDFS transaction includes three key components: back book sale, sale of approximately $6 billion of existing HDFS loan receivables, forward flow agreement, the sale of future HDFS loan originations, and the sale of equity interest, sale of a 9.8% common equity interest in HDFS to KKR and PIMCO. In the fourth quarter, we retired a significant portion of HDFS debt, which resulted in some discrete costs. These discrete liability management costs were $73 million in Q4. While the full year results were record high earnings for HDFS, Q4 of 2025 resulted in an operating loss of $82 million for HDFS. Let me provide some greater detail.
Jonathan Root: As mentioned earlier, we closed the HDFS transaction in Q4 at the end of October. Just to restate or recap what we talked about in greater detail on the last earnings call, the HDFS transaction includes three key components: back book sale, sale of approximately $6 billion of existing HDFS loan receivables, forward flow agreement, the sale of future HDFS loan originations, and the sale of equity interest, sale of a 9.8% common equity interest in HDFS to KKR and PIMCO. In the fourth quarter, we retired a significant portion of HDFS debt, which resulted in some discrete costs. These discrete liability management costs were $73 million in Q4. While the full year results were record high earnings for HDFS, Q4 of 2025 resulted in an operating loss of $82 million for HDFS. Let me provide some greater detail.
Speaker #2: At Harley-Davidson Financial Services, Q4 revenue came in at $106 million. Versus $257 million in the prior year. The Q4 decrease was driven by lower retail and wholesale financial receivables at lower yields.
Speaker #2: Backbook sale, sale of approximately $6 billion of existing HDFS loan receivables, forward flow agreement, the sale of future HDFS loan originations, and the sale of equity interests, sale of a $9.8% common equity interest in HDFS to KKR and PIMCO.
Speaker #2: The decline in retail receivables was due to the sale of the retail backbook in the HDFS transaction. In Q4, interest income decreased from $224 million in Q4 of '24 to $46 million.
Speaker #2: In the fourth quarter, we retired a significant portion of HDFS debt, which resulted in some discrete costs. These discrete liability management costs were $73 million, in Q4.
Speaker #2: In Q4 of '25, while other income increased to $60 million due to new servicing fee streams. On the expense side, Q4 interest expense increased to $130 million.
Speaker #2: While the full year results were record high earnings for HDFS, Q4 of '25 resulted in an operating loss of $82 million. For HDFS, let me provide some greater detail.
Speaker #2: From $95 million a year ago. This line item included the $73 million of discrete liability management costs to retire HDFS indebtedness. The provision for credit losses decreased to $7 million in Q4 from $72 million a year ago on lower retail finance receivables.
Speaker #2: At Harley-Davidson Financial Services, Q4 revenue came in at $106 million, versus $257 million in the prior year. The Q4 decrease was driven by lower retail and wholesale finance receivables at lower yields.
Jonathan Root: At Harley-Davidson Financial Services, Q4 revenue came in at $106 million versus $257 million in the prior year. The Q4 decrease was driven by lower retail and wholesale finance receivables at lower yields. The decline in retail receivables was due to the sale of the retail back book in the HDFS transaction. In Q4, interest income decreased from $224 million in Q4 of 2024 to $46 million in Q4 of 2025, while other income increased to $60 million due to new servicing fee streams. On the expense side, Q4 interest expense increased to $130 million from $95 million a year ago. This line item included the $73 million of discrete liability management costs to retire HDFS indebtedness.
Jonathan Root: At Harley-Davidson Financial Services, Q4 revenue came in at $106 million versus $257 million in the prior year. The Q4 decrease was driven by lower retail and wholesale finance receivables at lower yields. The decline in retail receivables was due to the sale of the retail back book in the HDFS transaction. In Q4, interest income decreased from $224 million in Q4 of 2024 to $46 million in Q4 of 2025, while other income increased to $60 million due to new servicing fee streams. On the expense side, Q4 interest expense increased to $130 million from $95 million a year ago. This line item included the $73 million of discrete liability management costs to retire HDFS indebtedness.
Speaker #2: The decline in retail receivables was due to the sale of the retail backbook in the HDFS transaction. In Q4, interest income decreased from $224 million in Q4 of '24 to $46 million, in Q4 of '25, while other income increased to $60 million due to new servicing fee streams.
Speaker #2: Last, operating expenses came in at $51 million in Q4 versus $43 million a year ago. Primarily driven by increased hedging costs and employee costs.
Speaker #2: In Q4, HDFS operating income came in at a loss of $82 million. For the full year 2025, HDFS revenue was $869 million. Down 16% from prior year primarily due to lower retail receivables and lower wholesale receivables due to the transaction.
Speaker #2: On the expense side, Q4 interest expense increased to $130 million, from $95 million a year ago. This line item included the $73 million of discrete liability management costs to retire HDFS indebtedness.
Speaker #2: For the full year 2025, interest income decreased from $891 million to $668 million. For the full year 2025, other income increased from $148 million to $201 million.
Speaker #2: The provision for credit losses decreased to $7 million in Q4 from $72 million a year ago, on lower retail finance receivables. Last, operating expenses came in at $51 million in Q4 versus $43 million a year ago, primarily driven by increased hedging costs and employee costs.
Jonathan Root: The provision for credit losses decreased to $7 million in Q4 from $72 million a year ago on lower retail finance receivables. Lastly, operating expenses came in at $51 million in Q4 versus $43 million a year ago, primarily driven by increased hedging costs and employee costs. In Q4, HDFS operating income came in at a loss of $82 million. For the full year 2025, HDFS revenue was $869 million, down 16% from prior year, primarily due to lower retail receivables and lower wholesale receivables due to the transaction. For the full year 2025, interest income decreased from $891 million to $668 million.
Jonathan Root: The provision for credit losses decreased to $7 million in Q4 from $72 million a year ago on lower retail finance receivables. Lastly, operating expenses came in at $51 million in Q4 versus $43 million a year ago, primarily driven by increased hedging costs and employee costs. In Q4, HDFS operating income came in at a loss of $82 million. For the full year 2025, HDFS revenue was $869 million, down 16% from prior year, primarily due to lower retail receivables and lower wholesale receivables due to the transaction. For the full year 2025, interest income decreased from $891 million to $668 million.
Speaker #2: In the prior year. Primarily driven by a discrete gain on the sale of residual interest in securitizations. A component of the HDFS transaction and by servicing fee income.
Speaker #2: For the full year 2025, HDFS operating income was $490 million. Record high earnings for HDFS. Up from $248 million in full year 2024. The increase was primarily driven by favorable provision for credit loss expense due to the HDFS transaction impact.
Speaker #2: In Q4, HDFS operating income came in at a loss of $82 million. For the full year 2025, HDFS revenue was $869 million. Down 16% from prior year, primarily due to lower retail receivables and lower wholesale receivables due to the transaction.
Speaker #2: For the full year 2025, interest income decreased from $891 million to $668 million. For the full year 2025, other income increased from $148 million to $201 million, in the prior year.
Speaker #2: And higher other income. Partially offset by lower net interest income and higher operating expenses. With the sale of $6 billion of retail finance receivables, the provision for credit loss line item became favorable.
Jonathan Root: For the full year 2025, other income increased from $148 million to $201 million in the prior year, primarily driven by a discrete gain on the sale of residual interest in securitizations, a component of the HDFS transaction, and by servicing fee income. For the full year 2025, HDFS operating income was $490 million, record high earnings for HDFS, up from $248 million in full year 2024. The increase was primarily driven by favorable provision for credit loss expense due to the HDFS transaction impact and higher other income, partially offset by lower net interest income and higher operating expenses.
Jonathan Root: For the full year 2025, other income increased from $148 million to $201 million in the prior year, primarily driven by a discrete gain on the sale of residual interest in securitizations, a component of the HDFS transaction, and by servicing fee income. For the full year 2025, HDFS operating income was $490 million, record high earnings for HDFS, up from $248 million in full year 2024. The increase was primarily driven by favorable provision for credit loss expense due to the HDFS transaction impact and higher other income, partially offset by lower net interest income and higher operating expenses.
Speaker #2: Rather than a cost reflecting the release of Cecil allowance associated with the sold loans. Turning to HDFS loan origination activities, total retail loan originations in Q4 were up 2% coming in at $487 million.
Speaker #2: Primarily driven by a discrete gain on the sale of residual interest in securitizations. A component of the HDFS transaction and by servicing fee income.
Speaker #2: For the full year 2025, HDFS operating income was $490 million—a record high for HDFS, up from $248 million in full year 2024. The increase was primarily driven by favorable provision for credit loss expense due to the HDFS transaction impact, and higher other income.
Speaker #2: In Q4. Commercial receivables came in at $949 million. At the end of the year, relative to the prior year level of $1 billion. Down 6% reflecting overall lower dealer inventory levels in the channel.
Speaker #2: Total gross financing receivables were $2 billion. At the end of 2025, where retail receivables were $1 billion. And commercial receivables were $949 million. This is a significant change relative to a year ago resulting from the sale of around $6 billion of HDFS retail loan receivables as part of the HDFS transaction.
Speaker #2: Partially offset by lower net interest income and higher operating expenses. With the sale of $6 billion of retail finance receivables, the provision for credit loss line item became favorable, rather than a cost, reflecting the release of CISO allowance associated with the sold loans.
Jonathan Root: With the sale of $6 billion of retail finance receivables, the provision for credit loss line item became favorable rather than a cost, reflecting the release of CECL allowance associated with the sold loans. Turning to HDFS loan origination activities. Total retail loan originations in Q4 were up 2%, coming in at $487 million in Q4. Commercial receivables came in at $949 million at the end of the year, relative to the prior year level of $1 billion, down 6%, reflecting overall lower dealer inventory levels in the channel. Total gross financing receivables were $2 billion at the end of 2025, where retail receivables were $1 billion and commercial receivables were $949 million.
Jonathan Root: With the sale of $6 billion of retail finance receivables, the provision for credit loss line item became favorable rather than a cost, reflecting the release of CECL allowance associated with the sold loans. Turning to HDFS loan origination activities. Total retail loan originations in Q4 were up 2%, coming in at $487 million in Q4. Commercial receivables came in at $949 million at the end of the year, relative to the prior year level of $1 billion, down 6%, reflecting overall lower dealer inventory levels in the channel. Total gross financing receivables were $2 billion at the end of 2025, where retail receivables were $1 billion and commercial receivables were $949 million.
Speaker #2: For comparison purposes, gross financing receivables were $7.7 billion. At the end of 2024, which includes both retail loans and commercial financing. Total HDFS loan assets fell 74% year over year, as we shift to a capital light business model.
Speaker #2: Turning to HDFS loan origination activities, total retail loan originations in Q4 were up 2%, coming in at $487 million, in Q4. Commercial receivables came in at $949 million, at the end of the year, relative to the prior year level of $1 billion.
Speaker #2: That carries less risk. Now, turning to slide 13 for the live wire segment. On a full year basis, electric motorcycle units increased by 7%.
Speaker #2: Down 6%, reflecting overall lower dealer inventory levels in the channel. Total gross financing receivables were $2 billion at the end of 2025, where retail receivables were $1 billion and commercial receivables were $949 million.
Speaker #2: And Stasic units increased by 15%. While consolidated revenue decreased by 3% due to increased incentives associated with the twist and go promotion. Live wire maintained its position as number one retailer in the US 50 plus horsepower on-road EV segment.
Speaker #2: This is a significant change relative to a year ago, resulting from the sale of around $6 billion of HDFS retail loan receivables, as part of the HDFS transaction.
Jonathan Root: This is a significant change relative to a year ago, resulting from the sale of around $6 billion of HDFS retail loan receivables as part of the HDFS transaction. For comparison purposes, gross financing receivables were $7.7 billion at the end of 2024, which includes both retail loans and commercial financing. Total HDFS loan assets fell 74% year-over-year, as we shift to a capital-light business model that carries less risk. Now, turning to Slide 13 for the LiveWire segment. On a full year basis, electric motorcycle units increased by 7% and STACYC units increased by 15%, while consolidated revenue decreased by 3% due to increased incentives associated with the Twist and Go promotion. LiveWire maintained its position as No. 1 retailer in the US 50+ horsepower on-road EV segment and had its second consecutive record-setting quarter for retail sales.
Jonathan Root: This is a significant change relative to a year ago, resulting from the sale of around $6 billion of HDFS retail loan receivables as part of the HDFS transaction. For comparison purposes, gross financing receivables were $7.7 billion at the end of 2024, which includes both retail loans and commercial financing. Total HDFS loan assets fell 74% year-over-year, as we shift to a capital-light business model that carries less risk. Now, turning to Slide 13 for the LiveWire segment. On a full year basis, electric motorcycle units increased by 7% and STACYC units increased by 15%, while consolidated revenue decreased by 3% due to increased incentives associated with the Twist and Go promotion. LiveWire maintained its position as No. 1 retailer in the US 50+ horsepower on-road EV segment and had its second consecutive record-setting quarter for retail sales.
Speaker #2: And had its second consecutive record-setting quarter for retail sales. Consolidated operating loss decreased by 32%, driving a 45% decrease in net cash used during the year.
Speaker #2: For comparison purposes, gross financing receivables were $7.7 billion at the end of 2024, which includes both retail loans and commercial financing. Total HDFS loan assets fell 74% year over year, as we shift to a capital-light business model that carries less risk.
Speaker #2: Excluding the $75 million of proceeds from the term loan with HD. During Q4 of 2025, live wire consolidated revenue increased by 9%. Driven by a 61% increase in electric motorcycle units.
Speaker #2: Now, turning to slide 13. For the Livewire segment, on a full year basis, electric motorcycle units increased by 7%, and Stasik ik units increased by 15%.
Speaker #2: And a 7% increase in Stasic units. Consolidated operating loss decreased by 30%. For 2026, live wires focus is on the launch of its S4 Honcho products.
Speaker #2: While consolidated revenue decreased by 3%, due to increased incentives associated with the twist-and-go promotion. Livewire maintained its position as number one retailer in the US 50-plus horsepower on-road EV segment, and had its second consecutive record-setting quarter for retail sales.
Speaker #2: With production targeted to begin in the spring of 2026. Continued network expansion. Cost savings and improvement. And product innovation and development focused on profitable products.
Speaker #2: Consolidated operating loss decreased by 32%, driving a 45% decrease in net cash used during the year, excluding the $75 million of proceeds from the term loan with HD.
Speaker #2: Now turning to slide 14. Wrapping up with consolidated Harley-Davidson Inc. Financial results, we delivered $569 million of operating cash flow in full year 2025.
Jonathan Root: Consolidated operating loss decreased by 32%, driving a 45% decrease in net cash used during the year, excluding the $75 million of proceeds from the term loan with HD. During Q4 of 2025, LiveWire consolidated revenue increased by 9%, driven by a 61% increase in electric motorcycle units and a 7% increase in static units. Consolidated operating loss decreased by 13%. For 2026, LiveWire's focus is on the launch of its S4 Honcho products, with production targeted to be in the spring of 2026, continued network expansion, cost savings and improvement, and product innovation and development focused on profitable products. Now turning to Slide 14. Wrapping up with consolidated Harley-Davidson, Inc.
Jonathan Root: Consolidated operating loss decreased by 32%, driving a 45% decrease in net cash used during the year, excluding the $75 million of proceeds from the term loan with HD. During Q4 of 2025, LiveWire consolidated revenue increased by 9%, driven by a 61% increase in electric motorcycle units and a 7% increase in static units. Consolidated operating loss decreased by 13%. For 2026, LiveWire's focus is on the launch of its S4 Honcho products, with production targeted to be in the spring of 2026, continued network expansion, cost savings and improvement, and product innovation and development focused on profitable products.
Speaker #2: Which was down from $1,064 million in full year 2024. The decrease in operating cash flow was driven by lower motorcycle shipment volumes and unfavorable manufacturing and tariff costs.
Speaker #2: During Q4 of 2025, Livewire consolidated revenue increased by 9%, driven by a 61% increase in electric motorcycle units, and a 7% increase in Stasik units.
Speaker #2: Consolidated operating loss decreased by 30%. For 2026, Livewire's focus is on the launch of its S4 Honcho products, with production targeted to begin in the spring of 2026, continued network expansion, cost savings, and improvement, and product innovation and development focused on profitable products.
Speaker #2: As well as originations of retail finance receivables classified as held for sale which are classified as operating cash outflows. There were no originations of retail finance receivables held for sale in 2024.
Speaker #2: For the net outflows related to this activity, contributed to the decrease in operating cash flows. Total cash and cash equivalents ended at $3.1 billion.
Speaker #2: Now turning to slide 14. Wrapping up with consolidated Harley-Davidson, Inc. financial results, we delivered $569 million of operating cash flow in full year 2025, which was down from $1,064 million in full year 2024.
Speaker #2: Which was $1.5 billion higher than a year ago. The HDFS transaction facilitated a dividend of $1 billion from HDFS to HDI in Q4, which together with a further dividend expected to be paid in Q1 results in a total dividend that will be consistent with our original expectation.
Jonathan Root: Now turning to Slide 14. Wrapping up with consolidated Harley-Davidson, Inc. Financial results, we delivered $569 million of operating cash flow in full year 2025, which was down from $1.064 billion in full year 2024. The decrease in operating cash flow was driven by lower motorcycle shipment volumes and unfavorable manufacturing and tariff costs, as well as originations of retail finance receivables classified as held for sale, which are classified as operating cash outflows. There were no originations of retail finance receivables held for sale in 2024, so the net outflows related to this activity contributed to the decrease in operating cash flows. Total cash and cash equivalents ended at $3.1 billion, which was $1.5 billion higher than a year ago.
Jonathan Root: Financial results, we delivered $569 million of operating cash flow in full year 2025, which was down from $1.064 billion in full year 2024. The decrease in operating cash flow was driven by lower motorcycle shipment volumes and unfavorable manufacturing and tariff costs, as well as originations of retail finance receivables classified as held for sale, which are classified as operating cash outflows. There were no originations of retail finance receivables held for sale in 2024, so the net outflows related to this activity contributed to the decrease in operating cash flows. Total cash and cash equivalents ended at $3.1 billion, which was $1.5 billion higher than a year ago.
Speaker #2: The decrease in operating cash flow was driven by lower motorcycle shipment volumes and unfavorable manufacturing and tariff costs, as well as originations of retail finance receivables classified as held for sale which are classified as operating cash outflows.
Speaker #2: In addition, HDFS debt will be further reduced by the maturity of a Euro 700 million medium term note in Q2. As part of our capital allocation strategy, in Q4, we entered into an accelerated share repurchase agreement with Goldman Sachs to repurchase $200 million of shares of the company's common stock.
Speaker #2: There were no originations of retail finance receivables held for sale in 2024, and the net outflows related to this activity contributed to the decrease in operating cash flows.
Speaker #2: We entered into the $200 million ASR and $160 million was delivered before 12/31. With the remainder in early 2026. For the full year 2025, we repurchased a total value of $347 million.
Speaker #2: Total cash and cash equivalents ended at $3.1 billion, which was $1.5 billion higher than a year ago. The HDFS transaction facilitated a dividend of $1 billion from HDFS to HDI in Q4, which, together with a further dividend expected to be paid in Q1, results in a total dividend that will be consistent with our original expectation.
Jonathan Root: The HDFS transaction facilitated a dividend of $1 billion from HDFS to HDI in Q4, which, together with a further dividend expected to be paid in Q1, results in a total dividend that will be consistent with our original expectations. In addition, HDFS debt will be further reduced by the maturity of a EUR 700 million medium-term note in Q2. As part of our capital allocation strategy, in Q4, we entered into an accelerated share repurchase agreement with Goldman Sachs to repurchase $200 million of shares of the company's common stock. We entered into the $200 million ASR, and $160 million was delivered before December 31, with the remainder in early 2026.
Jonathan Root: The HDFS transaction facilitated a dividend of $1 billion from HDFS to HDI in Q4, which, together with a further dividend expected to be paid in Q1, results in a total dividend that will be consistent with our original expectations. In addition, HDFS debt will be further reduced by the maturity of a EUR 700 million medium-term note in Q2. As part of our capital allocation strategy, in Q4, we entered into an accelerated share repurchase agreement with Goldman Sachs to repurchase $200 million of shares of the company's common stock. We entered into the $200 million ASR, and $160 million was delivered before December 31, with the remainder in early 2026.
Speaker #2: Or $13.1 million shares in total. Which represents around 11% of December 31st, 2024 shares outstanding. This amount includes the aforementioned ASR agreement. Now turning to a more volatile and challenging year slide 16, while 2025 was than we had anticipated, we looked to 2026 where we start the year at more appropriate dealer inventory levels and look to reset the business.
Speaker #2: In addition, HDFS debt will be further reduced by the maturity of a Euro 700 million medium-term note in Q2. As part of our capital allocation strategy, in Q4, we entered into an accelerated share repurchase agreement with Goldman Sachs to repurchase $200 million of shares of the company's common stock.
Speaker #2: Toward a more stable operating and financial future. As we look through our financial outlook for 2026, we remain pleased with our leading market share position in the US.
Speaker #2: We entered into the $200 million ASR, and $160 million was delivered before December 31, with the remainder in early 2026. For the full year 2025, we repurchased a total value of $347 million, or 13.1 million shares in total, which represents around 11% of December 31, 2024 shares outstanding.
Speaker #2: New model year 26 motorcycle launch including the all-new redesigned strike models as well as the long-haul touring. And the introduction of a more affordable lineup of motorcycles with a focus on critical price point motorcycles to help stoke demand.
Jonathan Root: For the full year 2025, we repurchased a total value of $347 million, or 13.1 million shares in total, which represents around 11% of December 31, 2024, shares outstanding. This amount includes the aforementioned ASR agreement. Now, turning to slide 16. While 2025 was a more volatile and challenging year than we had anticipated, we look to 2026, where we start the year at more appropriate dealer inventory levels and look to reset the business toward a more stable operating and financial future. As we look to our financial outlook for 2026, we remain pleased with our leading market share position in the US.
Jonathan Root: For the full year 2025, we repurchased a total value of $347 million, or 13.1 million shares in total, which represents around 11% of December 31, 2024, shares outstanding. This amount includes the aforementioned ASR agreement. Now, turning to slide 16. While 2025 was a more volatile and challenging year than we had anticipated, we look to 2026, where we start the year at more appropriate dealer inventory levels and look to reset the business toward a more stable operating and financial future. As we look to our financial outlook for 2026, we remain pleased with our leading market share position in the US.
Speaker #2: At HDMC, we expect retail units of $130,000 to $135,000. We expect wholesale units of $130,000 to $135,000. As you can see, we believe that global dealer inventory levels are at appropriate total levels.
Speaker #2: This amount includes the aforementioned ASR agreement. Now, turning to slide 16. While 2025 was a more volatile and challenging year than we had anticipated, we looked to 2026 where we start the year at more appropriate dealer inventory levels and look to reset the business.
Speaker #2: With some need to balance by model and family. Therefore, we expect retail and wholesale to have a largely one-to-one relationship in 2026. At the same time, we expect production units at HDMC to be lower than wholesale unit shipped in 2026 as we work to prudently manage overall company inventory levels.
Speaker #2: Toward a more stable operating and financial future. As we look to our financial outlook for 2026, we remain pleased with our leading market share position in the US, new model year 26 motorcycle launch including the all-new redesigned trike models, as well as the long-haul touring, and the introduction of a more affordable lineup of motorcycles with a focus on critical price point motorcycles to help stoke demand.
Jonathan Root: New model year 2026 motorcycle launch, including the all-new redesigned trike models, as well as the long-haul touring, and the introduction of a more affordable lineup of motorcycles with a focus on critical price point motorcycles to help stoke demand. At HDMC, we expect retail units of 130,000 to 135,000. We expect wholesale units of 130,000 to 135,000. As you can see, we believe that global dealer inventory levels are at appropriate total levels, with some need to balance by model and family. Therefore, we expect retail and wholesale to have a largely one-to-one relationship in 2026. At the same time, we expect production units at HDMC to be lower than wholesale units shipped in 2026, as we work to prudently manage overall company inventory levels.
Jonathan Root: New model year 2026 motorcycle launch, including the all-new redesigned trike models, as well as the long-haul touring, and the introduction of a more affordable lineup of motorcycles with a focus on critical price point motorcycles to help stoke demand. At HDMC, we expect retail units of 130,000 to 135,000. We expect wholesale units of 130,000 to 135,000. As you can see, we believe that global dealer inventory levels are at appropriate total levels, with some need to balance by model and family. Therefore, we expect retail and wholesale to have a largely one-to-one relationship in 2026. At the same time, we expect production units at HDMC to be lower than wholesale units shipped in 2026, as we work to prudently manage overall company inventory levels.
Speaker #2: For 2026, we expect this will have a deleverage impact, which will pressure operating leverage when it comes to operating margins. In addition, we expect to face a greater overall cost for incremental tariffs in 2026.
Speaker #2: At HDMC, we expect retail units of $130,000 to $135,000. We expect wholesale units of $130,000 to $135,000. As you can see, we believe that global dealer inventory levels are at appropriate total levels with some need to balance by model and family.
Speaker #2: Which are likely to be applied more uniformly over the entire calendar year. Whereas 2025 experienced partial application during the year. And was backloaded. As a reminder, in full year 2025, we incurred a cost of $67 million in new or increased tariffs.
Speaker #2: Therefore, we expect retail and wholesale to have a largely one-to-one relationship in 2026. At the same time, we expect production units at HDMC to be lower than wholesale unit shipped in 2026 as we work to prudently manage overall company inventory levels.
Speaker #2: And in 2026, we forecast the cost of between $75 million to $105 million. Of new or increased tariffs. Based on current tariff levels. And versus a 2024 baseline.
Speaker #2: At HDMC, we expect operating income of positive $10 million to a loss of $40 million. At HDFS, we expect operating income of $45 million to $60 million.
Speaker #2: For 2026, we expect this will have a deleveraging impact, which will pressure operating leverage when it comes to operating margins. In addition, we expect to face a greater overall cost for incremental tariffs in 2026, which are likely to be applied more uniformly over the entire calendar year, whereas 2025 experienced partial application during the year and was backloaded.
Jonathan Root: For 2026, we expect this will have a deleverage impact, which will pressure operating leverage when it comes to operating margins. In addition, we expect to face a greater overall cost for incremental tariffs in 2026, which are likely to be applied more uniformly over the entire calendar year, whereas 2025 experienced partial application during the year and was backloaded. As a reminder, in full year 2025, we incurred a cost of $67 million in new or increased tariffs. In 2026, we forecast a cost of between $75 million to $105 million of new or increased tariffs based on current tariff levels and versus a 2024 baseline. At HDFS, we expect operating income of positive $10 million to a loss of $40 million. At HDFS, we expect operating income of $45 million to $60 million.
Jonathan Root: For 2026, we expect this will have a deleverage impact, which will pressure operating leverage when it comes to operating margins. In addition, we expect to face a greater overall cost for incremental tariffs in 2026, which are likely to be applied more uniformly over the entire calendar year, whereas 2025 experienced partial application during the year and was backloaded. As a reminder, in full year 2025, we incurred a cost of $67 million in new or increased tariffs. In 2026, we forecast a cost of between $75 million to $105 million of new or increased tariffs based on current tariff levels and versus a 2024 baseline. At HDFS, we expect operating income of positive $10 million to a loss of $40 million. At HDFS, we expect operating income of $45 million to $60 million.
Speaker #2: The forecast is based on the new business model at HDFS given the HDFS transaction. Where Harley-Davidson Financial Services now employs a capital light derisk business model.
Speaker #2: And has significantly changed financial earnings profile relative to before the transaction was done. Particularly in the near term. Additionally, both retail and wholesale asset levels are lower than we previously believed and non-servicing fee income is also being viewed more cautiously.
Speaker #2: As a reminder, in full year 2025, we incurred a cost of $67 million in new or increased tariffs. And in 2026, we forecast the cost of between $75 million to $105 million of new or increased tariffs based on current tariff levels and versus a 2024 baseline.
Speaker #2: At Livewire, Livewire is forecasting an operating loss in the range of $70 million to $80 million. These guidance elements exclude impacts from our updated strategic plan, which we are looking forward to announcing in May along with Q1 earnings.
Speaker #2: At HDMC, we expect operating income of positive $10 million to a loss of $40 million. At HDFS, we expect operating income of $45 million to $60 million.
Speaker #2: And with that, we'll open it up to Q&A. Thank you. As a reminder to ask a question, please press star one on your telephone keypad.
Speaker #2: The forecast is based on the new business model at HDFS given the HDFS transaction where Harley-Davidson financial services now employs a capital light derisk business model and has significantly changed financial earnings profile relative to before the transaction was done.
Jonathan Root: The forecast is based on the new business model at HDFS, given the HDFS transaction, where Harley-Davidson Financial Services now employs a capital-light, de-risk business model and has significantly changed financial earnings profile relative to before the transaction was done, particularly in the near term. Additionally, both retail and wholesale asset levels are lower than we previously believed, and non-servicing fee income is also being viewed more cautiously. At LiveWire, LiveWire is forecasting an operating loss in the range of $70 million to $80 million. These guidance elements exclude impacts from our updated strategic plan, which we are looking forward to announcing in May, along with Q1 earnings. With that, we'll open it up to Q&A.
Jonathan Root: The forecast is based on the new business model at HDFS, given the HDFS transaction, where Harley-Davidson Financial Services now employs a capital-light, de-risk business model and has significantly changed financial earnings profile relative to before the transaction was done, particularly in the near term. Additionally, both retail and wholesale asset levels are lower than we previously believed, and non-servicing fee income is also being viewed more cautiously. At LiveWire, LiveWire is forecasting an operating loss in the range of $70 million to $80 million. These guidance elements exclude impacts from our updated strategic plan, which we are looking forward to announcing in May, along with Q1 earnings.
Speaker #2: To withdraw your question, press star one again. We also ask you to limit yourself to one question and return to the queue for additional questions.
Speaker #2: Particularly in the near term. Additionally, both retail and wholesale asset levels are lower than we previously believed, and non-servicing fee income is also being viewed more cautiously.
Speaker #2: Thank you. Your first question comes from Craig Kennison, with
Speaker #2: Baird. Hey, good morning.
Speaker #3: Thank you for taking my question on HDFS. Just, you know, based on the message that came out of the HDFS transaction last year, I think the expectation was that HDFS operating income could be maybe half of what it used to be, so at least $100 million.
Speaker #2: At LiveWire, LiveWire is forecasting an operating loss in the range of $70 million to $80 million. These guidance elements exclude impacts from our updated strategic plan, which we are looking forward to announcing in May along with Q1 earnings.
Speaker #2: And with that, we'll open it up to Q&A. Thank you. As a reminder, to ask a question, please press star on your keypad. To withdraw your question, press star one again.
Speaker #3: Granted, that was just the expectation. That came out of the presentation materials, but you're looking to be about half of that. Maybe help us unpack what's going on with the math behind HDFS and what the long-term profitability of that business should look like.
Jonathan Root: With that, we'll open it up to Q&A.
Operator: Thank you. As a reminder, to ask a question, please press star one on your telephone keypad. To withdraw your question, press star one again. We also ask you to limit yourself to one question and return to the queue for additional questions. Thank you. Your first question comes from Craig Kennison with Baird.
Operator: Thank you. As a reminder, to ask a question, please press star one on your telephone keypad. To withdraw your question, press star one again. We also ask you to limit yourself to one question and return to the queue for additional questions. Thank you. Your first question comes from Craig Kennison with Baird.
Speaker #2: We also ask you to limit yourself to one question and return to the queue for additional questions. Thank you. Your first question comes from Craig Tennyson with
Speaker #4: All right. Hey, Craig. How are you doing? Thank you for your question today. So obviously, from an HDFS standpoint, as we take a look at what we're guiding to, as you say, for 2026, we have a guide for the HDFS business.
Speaker #2: Baird. Hey, good morning.
Speaker #3: Thank you for taking my question on HDFS. Just based on the message that came out of the HDFS transaction last year, I think the expectation was that HDFS operating income could be maybe half of what it used to be, so at least $100 million granted that was just the an expectation that came out of the presentation materials, but you're looking to be about half of that.
Speaker #4: To come in between 45 and 60 million dollars. As we flow forward and look to kind of a standard run rate for this business, which will probably take us, you know, two and a half, three years to get to that point.
Craig Kennison: Hey, good morning. Thank you for taking my question on HDFS. Just, you know, based on the message that came out of the HDFS transaction last year, I think the expectation was that HDFS operating income could be maybe half of what it used to be, so at least $100 million. Granted, that was just an expectation that came out of the presentation materials, but, but you're looking to be about half of that. Maybe help us unpack what's going on with the math behind HDFS and what the long-term profitability of that business should look like?
Craig Kennison: Hey, good morning. Thank you for taking my question on HDFS. Just, you know, based on the message that came out of the HDFS transaction last year, I think the expectation was that HDFS operating income could be maybe half of what it used to be, so at least $100 million. Granted, that was just an expectation that came out of the presentation materials, but, but you're looking to be about half of that. Maybe help us unpack what's going on with the math behind HDFS and what the long-term profitability of that business should look like?
Speaker #4: We would view it kind of at the midpoint that HDFS would be on a standardized basis, making approximately triple the midpoint. So that's where we think the business goes long term.
Speaker #3: Maybe help us unpack what's going on with the math behind HDFS and what the long-term profitability of that business should look like.
Speaker #4: As we think about some of the short-term related impacts and where is there a difference versus what we envision. We're obviously have a cautious outlook relative to what we're looking at from an overall volume standpoint.
Speaker #4: All right. Hey, Craig. How are you doing? Thank you for your question today. So obviously, from an we're guiding to, as you say, for 2026, we have a guide for the HDFS business.
Jonathan Root: ... Hey, Greg, how you doing? Thank you for your question today. So obviously, from an HDFS standpoint, as we take a look at what we're guiding to, as you say, for 2026, we have a guide for the HDFS business to come in between $45 and 60 million. As we flow forward and look to kind of a standard run rate for this business, which will probably take us, you know, 2.5, 3 years to get to that point, we would view, kind of at the midpoint that HDFS would be, would be on a standardized basis, making, approximately triple the midpoint. So that's where we think the business goes long term.
Jonathan Root: Hey, Greg, how you doing? Thank you for your question today. So obviously, from an HDFS standpoint, as we take a look at what we're guiding to, as you say, for 2026, we have a guide for the HDFS business to come in between $45 and 60 million. As we flow forward and look to kind of a standard run rate for this business, which will probably take us, you know, 2.5, 3 years to get to that point, we would view, kind of at the midpoint that HDFS would be, would be on a standardized basis, making, approximately triple the midpoint. So that's where we think the business goes long term.
Speaker #4: And so we're being careful and considered there. And then in addition, with what you saw with our Q4 year-end results, with dealer inventory down significantly and more than what we envisioned.
Speaker #4: To come in between 45 and 60 million dollars. As we flow forward and look to kind of a standard run rate for this business, which will probably take us two and a half, three years to get to that point.
Speaker #4: Obviously, we have lower wholesale assets too. So that pressures earnings power in that business. So hopefully that explains what you're looking for and provides the
Speaker #4: We would view kind of at the be on a standardized basis, making approximately triple the midpoint. So that's where we think the business goes long-term as we think about some of the short-term related impacts and where is there a difference versus what we envision.
Speaker #4: perspective. Dude, you
Speaker #3: need more retail and more wholesale stock units in order to triple that income or are there other adjustments?
Speaker #3: Jonathan.
Speaker #4: Yeah, no, just
Speaker #4: time for those to time for the retail assets to kind of flow their way in. So obviously we need multiple years of building kind of rebuilding the balance sheet in order to drive what we need for an income statement standpoint.
Jonathan Root: As we think about some of the short-term related impacts and where is there a difference versus what we envisioned, we obviously have a cautious outlook relative to what we're looking at from an overall volume standpoint, and so we're being careful and considered there. And then in addition, with what you saw with our Q4 year-end results, with dealer inventory down significantly and more than what we envisioned, obviously we have lower wholesale assets too, so that pressures earnings power of that business. So hopefully that explains what you're looking for and provides the perspective.
Jonathan Root: As we think about some of the short-term related impacts and where is there a difference versus what we envisioned, we obviously have a cautious outlook relative to what we're looking at from an overall volume standpoint, and so we're being careful and considered there. And then in addition, with what you saw with our Q4 year-end results, with dealer inventory down significantly and more than what we envisioned, obviously we have lower wholesale assets too, so that pressures earnings power of that business. So hopefully that explains what you're looking for and provides the perspective.
Speaker #4: We're obviously have a cautious outlook relative to what we're looking at from an overall volume standpoint. And so we're being careful and considered there.
Speaker #4: And then in addition, with what you saw with our Q4 year-end results, with dealer inventory down significantly and more than what we envisioned, obviously we have lower wholesale assets too.
Speaker #4: In that business. And then as we talked about wholesale levels are lower than what we envisioned with already focus on how we really maintain height and discipline inventory with our
Speaker #4: So that pressures earnings power of that business. So hopefully that explains what you're looking for and provides the
Speaker #4: dealers. That makes sense.
Speaker #3: Thank you.
Speaker #2: Your next question comes from Noah Zatzkin, with KeyBank Capital
Speaker #4: perspective. Do you
Speaker #2: Markets. Hi, thanks for taking my
Speaker #3: need more retail and more wholesale stock units in order to triple that income or are there other adjustments?
Speaker #3: question. I guess just on kind of the wholesale guidance. You know, you kind of talked about a one-for-one dynamic. Obviously, the implication is, you know, shipment growth in '26.
Craig Kennison: Do you need more retail and more wholesale stock, units in order to triple that income, or are there other adjustments, Jonathan?
Craig Kennison: Do you need more retail and more wholesale stock, units in order to triple that income, or are there other adjustments, Jonathan?
Speaker #3: Jonathan.
Speaker #4: Yeah, no, just time
Speaker #4: for those to time for the retail assets to kind of flow their way in. So obviously we need multiple years of building kind of rebuilding the balance sheet in order to drive what we need for an income statement standpoint.
Jonathan Root: Yeah, no, just time for the retail assets to kind of flow their way in. So obviously, we need multiple years of building, kind of rebuilding the balance sheet in order to drive what we need from an income statement standpoint in that business. And then as we talk about wholesale levels, they are lower than what we envisioned with Artie's focus on how we really maintain tight and disciplined inventory with our dealers.
Jonathan Root: Yeah, no, just time for the retail assets to kind of flow their way in. So obviously, we need multiple years of building, kind of rebuilding the balance sheet in order to drive what we need from an income statement standpoint in that business. And then as we talk about wholesale levels, they are lower than what we envisioned with Artie's focus on how we really maintain tight and disciplined inventory with our dealers.
Speaker #3: So I guess in terms of cadence, how should we think about that building through the year? And then on inventory comfortable now with where you're sitting at the end of the that you're kind of more levels, like I guess is the implication year?
Speaker #4: In that business. And then, as we talked about, wholesale levels are lower than what we envisioned, with already focus on how we really maintain height and discipline inventory with our dealers.
Speaker #3: Thanks.
Speaker #4: Sure. So why
Speaker #4: don't I start a little bit with cadence and then maybe we'll have Artie talk through total inventory levels and provide a little bit of commentary around that.
Speaker #3: That makes sense. Thank you.
Speaker #2: Your next question comes from Noah Zetskin with T Bank Capital.
Speaker #4: So from a cadence standpoint, as we think about wholesale shipments and the way that will look on a year-over-year basis, again, we're being what I would define as, you know, careful and considered.
Craig Kennison: That makes sense. Thank you.
Craig Kennison: That makes sense. Thank you.
Speaker #2: Markets. Hi, thanks for taking my—
Operator: Your next question comes from Noah Zatzkin with KeyBanc Capital Markets.
Operator: Your next question comes from Noah Zatzkin with KeyBanc Capital Markets.
Speaker #3: Question. I guess just on the wholesale guidance—you kind of talked about a one-for-one dynamic. Obviously, the implication is shipment growth in '26.
Noah Zatzkin: Hi, thanks for taking my question. I guess just on kind of the wholesale guidance, you know, you kind of talked about a one-for-one dynamic. Obviously, the implication is, you know, shipment growth in 2026. So I guess in terms of cadence, how should we think about that building through the year? And then on inventory levels, like, I guess, is the implication that you're kind of more comfortable now with where you're sitting at the end of the year? Thanks.
Noah Zatzkin: Hi, thanks for taking my question. I guess just on kind of the wholesale guidance, you know, you kind of talked about a one-for-one dynamic. Obviously, the implication is, you know, shipment growth in 2026. So I guess in terms of cadence, how should we think about that building through the year? And then on inventory levels, like, I guess, is the implication that you're kind of more comfortable now with where you're sitting at the end of the year? Thanks.
Speaker #4: In what we're sending into the dealer network. So Q1 of 2026 will probably be down from a wholesale shipment perspective down a little bit versus where we were in Q1 of prior year.
Speaker #3: So I guess in terms of cadence, how should we think about that building through the year? And then on inventory levels, I guess is the implication that you're kind of more comfortable now with where you're sitting at the end of the year?
Speaker #4: We think that we'll end up kind of popping up a little bit higher in early Q2. So making sure that we have dealers who are well positioned for when the season is starting.
Speaker #3: Thanks.
Speaker #4: So we're not asking them to carry that to be appropriately inventory in the January-February timeframe. But we do want them positioned from an inventory standpoint.
Speaker #4: Sure. So why don't
Speaker #4: I start a little bit with cadence and then maybe we'll have Artie talk through total inventory levels and provide a little bit of commentary around that.
Jonathan Root: Sure. So why don't I start a little bit with cadence, and then maybe we'll have Artie talk through total inventory levels and provide a little bit of commentary around that. So from a cadence standpoint, as we think about wholesale shipments and the way that will look on a year-over-year basis, again, we're being what I would define as, you know, careful and considered in what we're sending into the dealer network. So Q1 of 2026 will probably be down from a wholesale shipment perspective, down a little bit versus where we were in Q1 of prior year. We think that we'll end up kind of popping up a little bit higher in early Q2. So making sure that we have dealers who are well positioned for when the season is starting.
Jonathan Root: Sure. So why don't I start a little bit with cadence, and then maybe we'll have Artie talk through total inventory levels and provide a little bit of commentary around that. So from a cadence standpoint, as we think about wholesale shipments and the way that will look on a year-over-year basis, again, we're being what I would define as, you know, careful and considered in what we're sending into the dealer network. So Q1 of 2026 will probably be down from a wholesale shipment perspective, down a little bit versus where we were in Q1 of prior year. We think that we'll end up kind of popping up a little bit higher in early Q2. So making sure that we have dealers who are well positioned for when the season is starting.
Speaker #4: So, from a cadence standpoint, as we think about wholesale shipments and the way that will look on a year-over-year basis, again, we're being what I would define as careful and considered.
Speaker #4: So Q2 wholesale shipments will be a little bit higher than prior year. Then as we take a look at how we walk into Q3, Q3 again probably just a little bit lower as we work through some timing elements within the portfolio.
Speaker #4: In what we're sending into the dealer network. So Q1 of 2026 will probably be down from a wholesale shipment perspective down a little bit versus where we were in Q1 of prior year.
Speaker #4: And some things that occur from that standpoint. And then as we end up ending Q4, obviously we were pretty measured in what we shipped into the dealer network in Q4 of '25.
Speaker #4: We think that we'll end up kind of popping up a little bit higher in early Q2, so making sure that we have dealers who are well positioned for when the season is starting.
Speaker #4: So there's room for a pretty material change in what we're sending in in Q4 of 2026. So certainly as you kind of take all of those different factors, a little bit more backloaded from a shipment cadence in the second half of the year versus the first half.
Speaker #4: So we're not asking them to carry that inventory in the January-February timeframe. But we do want them to be appropriately positioned from an inventory standpoint.
Jonathan Root: So we're not asking them to carry that inventory in the January, February timeframe, but we do want them to be appropriately positioned from an inventory standpoint. So Q2 wholesale shipments will be a little bit higher than prior year. Then as we take a look at how we walk into Q3, Q3, again, probably just a little bit lower as we work through some timing elements within the portfolio and some things that occur from that standpoint. And then as we end up ending Q4, obviously, we were pretty measured in what we shipped into the dealer network in Q4 of 2025. So there's room for a pretty material change in what we're sending in, in Q4 of 2026.
Jonathan Root: So we're not asking them to carry that inventory in the January, February timeframe, but we do want them to be appropriately positioned from an inventory standpoint. So Q2 wholesale shipments will be a little bit higher than prior year. Then as we take a look at how we walk into Q3, Q3, again, probably just a little bit lower as we work through some timing elements within the portfolio and some things that occur from that standpoint. And then as we end up ending Q4, obviously, we were pretty measured in what we shipped into the dealer network in Q4 of 2025. So there's room for a pretty material change in what we're sending in, in Q4 of 2026.
Speaker #4: So Q2 wholesale shipments will be a little bit higher than the prior year. Then as we take a look at how we walk into Q3, Q3 again, probably just a little bit lower as we work through some timing elements within the portfolio.
Speaker #4: And even with that sort of a little bit more
Speaker #4: toward Q4. And Yeah.
Speaker #4: then Artie, you have some thoughts? Yeah, no, I just broadly
Speaker #3: on inventory, you know, the focus is on supporting our dealers and selling through the touring. Inventory we remain pleased with the progress there. There's still support there and we'll continue to be.
Speaker #4: And some things that occur from that standpoint. And then as we end up ending Q4, obviously, we were pretty measured in what we shipped into the dealer network in Q4 of '25.
Speaker #3: And we're also pleased with the 26 model year launch. A lot of enthusiasm in the market. So, you know, we'll be monitoring that closely, but, you know, in my script and in these comments, just want to be abundantly clear we're hyper-focused on healthy inventory levels and the focus is on the model year '25 touring right
Speaker #4: So there's room for a pretty material change in what we're sending in in Q4 of 2026. So certainly as you kind of take all of those different factors, a little bit more backloaded from a shipment cadence in the second half of the year versus the first half, and even with that sort of a little bit more
Speaker #3: now. Your next question comes from
Jonathan Root: So certainly, as you kind of take all of those different factors, a little bit more backloaded from a shipment cadence in the second half of the year versus the first half, and even with that, sort of, a little bit more towards Q4.
Jonathan Root: So certainly, as you kind of take all of those different factors, a little bit more backloaded from a shipment cadence in the second half of the year versus the first half, and even with that, sort of, a little bit more towards Q4.
Speaker #2: Robin Farley, with
Speaker #2: UBS. Great, thank you.
Speaker #4: toward Q4. And then Artie, you have some thoughts?
Speaker #5: I wanted to ask a little bit your expectation for retail to be flat. Globally, just wondering what that counts on for U.S. retail. And then also just kind of, you know, what's behind the expectation of flat, you know, just how you're thinking that how you're coming to that expectation.
Speaker #3: Yeah.
Speaker #3: Yeah, no, just broadly on inventory, the focus is on supporting our dealers in selling through the Touring. Inventory—we remain pleased with the progress there.
Artie Starrs: Hmm.
Jonathan Root: And then, Artie, you can comment-
Jonathan Root: And then, Artie, you can comment-
Artie Starrs: Yeah, no, just broadly on inventory, you know, the focus is on supporting our dealers and selling through the touring inventory. We remain pleased with the progress there. There's still support there and will continue to be. And we're also pleased with the 26 model year launch. A lot of enthusiasm in the market. So, you know, we'll be monitoring that closely. But, you know, in my script and in these comments, just wanna be abundantly clear, we're hyper-focused on healthy inventory levels, and the focus is on the model year 25 touring right now.
Artie Starrs: Yeah, no, just broadly on inventory, you know, the focus is on supporting our dealers and selling through the touring inventory. We remain pleased with the progress there. There's still support there and will continue to be. And we're also pleased with the 26 model year launch. A lot of enthusiasm in the market. So, you know, we'll be monitoring that closely. But, you know, in my script and in these comments, just wanna be abundantly clear, we're hyper-focused on healthy inventory levels, and the focus is on the model year 25 touring right now.
Speaker #3: There's still support there, and we'll continue to be. And we're also pleased with the market. So we'll be 2026-model year launch. A lot of enthusiasm in the monitoring—that closely. But in my script and in these comments, I just want to be abundantly clear we're hyper-focused on healthy inventory levels, and the focus is on the model year '25 Touring right now.
Speaker #5: And then if I could just also, by the way, just squeeze in a quick clarifying point on Livewire. I think previously the expectation had been that you were limiting the kind of losses you would underwrite and is it fair to say based on the guidance you're giving for '26 that you are willing to continue to invest or see Livewire maybe lose more than kind of the commentary last year?
Speaker #2: Your next question comes from Robin Farley with...
Speaker #2: UBS.
Speaker #5: Great. Thank you.
Operator: Your next question comes from Robin Farley with UBS.
Operator: Your next question comes from Robin Farley with UBS.
Speaker #5: wanted to ask a little bit your expectation for retail to be flat. Globally, just wondering what that counts on for US retail. And then also just kind of what's behind the expectation of flat, just how you're thinking that how you're coming to that expectation.
Speaker #5: Thank
Speaker #5: you. Hey Robin, it's Artie.
Speaker #3: Thank you for the question. I'll take the Livewire one and then Jonathan will walk through the retail forecast. I mean, on Livewire, we extended the 75 million loan, which was originally 100 million.
Robin Farley: Great, thank you. I wanted to ask a little bit your expectation for retail to be flat, globally. Just wondering what that counts on for, for US, retail. And then also just kind of, you know, what's behind the expectation of flat, you know, just how you're coming to that expectation. And then if I could just also, by the way, just squeeze in a quick clarifying point on LiveWire. I think previously, the expectation had been that you were limiting the kind of losses you would underwrite, and is it fair to say, based on the guidance you're giving for 2026, that you are willing to continue to invest or see LiveWire maybe lose more than, you know, kind of the commentary last year?
Robin Farley: Great, thank you. I wanted to ask a little bit your expectation for retail to be flat, globally. Just wondering what that counts on for, for US, retail. And then also just kind of, you know, what's behind the expectation of flat, you know, just how you're coming to that expectation. And then if I could just also, by the way, just squeeze in a quick clarifying point on LiveWire. I think previously, the expectation had been that you were limiting the kind of losses you would underwrite, and is it fair to say, based on the guidance you're giving for 2026, that you are willing to continue to invest or see LiveWire maybe lose more than, you know, kind of the commentary last year?
Speaker #3: So we worked through that with them and their actioning, you know, other sources of capital at this point in time. So in terms of funding the operating losses, they're so on.
Speaker #5: And then if I could just also, by the way, just squeeze in a quick clarifying point on Livewire. I think previously the expectation had been that you were limiting the kind of losses you would underwrite and is it fair to say based on the guidance you're giving for '26 that you are willing to continue to invest or see Livewire maybe lose more than kind of the commentary last year?
Speaker #3: We've extended our commitment on the loan and that's it. So Jonathan, you can walk through the retail piece.
Speaker #4: Okay. Sounds good. Thanks, Artie. Hi Robin. So on the, I think you asked about U.S. specifically from a retail standpoint. So as we flow through and take a look at it, we're obviously really, really excited about what's happening with the introduction of the new limited.
Speaker #5: Thank you.
Speaker #3: Hey, Robin, it's Artie. Thank you for the question. I'll take the Livewire one and then Jonathan will walk through the retail forecast. I mean, on Livewire, we extended the $75 million loan, which was originally $100 million.
Speaker #4: So as we take a look at where we are from an overall retail sales perspective, we do envision that we have a little bit of upside in terms of '26 versus '25 from a touring standpoint for a couple of reasons.
Robin Farley: Thank you.
Robin Farley: Thank you.
Artie Starrs: Hey, Robin, it's Artie. Thank you for the question. I'll take the LiveWire one, and then Jonathan will walk through the retail forecast. Yeah, on LiveWire, we, you know, we extended the $75 million loan, which was originally $100 million. So we, we worked through that with them, and they're, they're actioning, you know, other sources of capital at this point in time. So in terms of funding the operating losses or so on, we've, we've extended our commitment on the loan, and, and that's it. So, Jonathan, you can walk through the retail piece.
Artie Starrs: Hey, Robin, it's Artie. Thank you for the question. I'll take the LiveWire one, and then Jonathan will walk through the retail forecast. Yeah, on LiveWire, we, you know, we extended the $75 million loan, which was originally $100 million. So we, we worked through that with them, and they're, they're actioning, you know, other sources of capital at this point in time. So in terms of funding the operating losses or so on, we've, we've extended our commitment on the loan, and, and that's it. So, Jonathan, you can walk through the retail piece.
Speaker #3: So we worked through that with them, and they're actioning other sources of capital at this point in time. So, in terms of funding the operating losses, and so on.
Speaker #4: You heard Artie talk about our focus on '25 model year sell down and how that was focused around touring. So at retail, that actually really helps us in terms of moving through the '25 touring bikes and what we that is the new limited and the new have.
Speaker #3: We've extended our commitment on the loan, and that's it. So, Jonathan, you can walk through the retail piece.
Speaker #4: Okay. Sounds good. Thanks, Artie. Hi, Robin. So on the I think you asked about US specifically from a retail standpoint. So as we flow through and take a look at it, we're obviously really, really excited about what's happening with the introduction of the new limited.
Speaker #4: Stacked on top of limited that hit, and we're really excited about those and the initial reception to that. So a lot of enthusiasm from our dealer network around sold orders and what they're seeing on that front.
Jonathan Root: Okay. Sounds good. Thanks, Artie. Hi, Robin. So on the, I think you asked about US specifically from a retail standpoint. So as we flow through and take a look at it, we're obviously really, really excited about what's happening with the introduction of the new Limited. So as we take a look at where we are from an overall, overall retail sales perspective, we do envision that we have a little bit of upside in terms of 26 versus 25 from a touring standpoint for a couple of reasons. You heard Artie talk about our focus on 25 model year sell down and how that was focused around touring. So at retail, that actually really helps us in terms of moving through the 25 touring bikes and what we have.
Jonathan Root: Okay. Sounds good. Thanks, Artie. Hi, Robin. So on the, I think you asked about US specifically from a retail standpoint. So as we flow through and take a look at it, we're obviously really, really excited about what's happening with the introduction of the new Limited. So as we take a look at where we are from an overall, overall retail sales perspective, we do envision that we have a little bit of upside in terms of 26 versus 25 from a touring standpoint for a couple of reasons. You heard Artie talk about our focus on 25 model year sell down and how that was focused around touring. So at retail, that actually really helps us in terms of moving through the 25 touring bikes and what we have.
Speaker #4: As we move along on the retail side, we also have the introduction of the new trike again as we look at dealer enthusiasm, customer feedback around what those look like.
Speaker #4: So as we take a look at where we are from an overall retail sales perspective, we do envision that we have a little bit of upside in terms of '26 versus '25 from a touring standpoint for a couple of reasons.
Speaker #4: We're really proud of what our engineering team has done from a suspension perspective. So as you think through handling and the way that that motorcycle performs, some real positives, I think, in terms of how customers will feel and enjoy that motorcycle.
Speaker #4: You heard Artie talk about our focus on '25 model year sell-down and how that was focused around Touring. So at retail, that actually really helps us in terms of moving through the '25 Touring bikes and what we have.
Speaker #4: So a little bit of enthusiasm in terms of where we sit from a trike perspective. And then just a couple more pieces that I'll touch on quickly.
Speaker #4: Stacked on top of that is the new limited and the new limiteds that hit, and we're really excited about those and the initial reception to that.
Speaker #4: As we take a look, we are being careful and considered in what CBO retail and CBO wholesale shipments ship in looks like. We do want to make sure that those bikes really are put up on a pedestal and we're being thoughtful about what we're shipping in, which obviously will challenge retail a little bit within that particular family.
Jonathan Root: Stacked on top of that is the new Limited, and the new Limiteds have been hit, and we're really excited about those and the initial reception to that. So a lot of enthusiasm from our dealer network around sold orders and what they're seeing on that front. As we move along on the retail side, we also have the introduction of the new Trikes. Again, as we look at dealer enthusiasm and customer feedback around what those look like, we're really proud of what our engineering team has done from a suspension perspective. So as you think through handling and the way that that motorcycle performs, some real positives, I think, in terms of how customers will feel and enjoy that motorcycle. So a little bit of enthusiasm in terms of where we sit from a Trike perspective.
Jonathan Root: Stacked on top of that is the new Limited, and the new Limiteds have been hit, and we're really excited about those and the initial reception to that. So a lot of enthusiasm from our dealer network around sold orders and what they're seeing on that front. As we move along on the retail side, we also have the introduction of the new Trikes. Again, as we look at dealer enthusiasm and customer feedback around what those look like, we're really proud of what our engineering team has done from a suspension perspective. So as you think through handling and the way that that motorcycle performs, some real positives, I think, in terms of how customers will feel and enjoy that motorcycle. So a little bit of enthusiasm in terms of where we sit from a Trike perspective.
Speaker #4: So a lot of enthusiasm from our dealer network around sold orders and what they're seeing on that front. As we move along on the retail side, we also have the introduction of the new trike again as we look at dealer enthusiasm, customer feedback around what those look like.
Speaker #4: And then overall, we have the full year of soft sales. So really, really excited that we have dealers who are well positioned. We've kind of moved some price points in a way that are pretty customer friendly.
Speaker #4: We're really proud of what our Hearing team has done from a suspension perspective. So, as you think through handling and the way that that motorcycle performs, some real positives, I think, in terms of how customers will feel and enjoy that motorcycle.
Speaker #4: And so overall, feeling good about where that is. So those are many of the puts and takes for 2026.
Speaker #4: So a little bit of enthusiasm in terms of where we sit from a trike perspective. And then just a couple more pieces that I'll touch on quickly.
Speaker #5: Great. Your next
Speaker #4: As we take a look, we are being careful and considered in what CBO retail and CBO wholesale shipment ship-in looks like. We do want to make sure that those bikes really are put up on a pedestal and we're being thoughtful about what we're shipping in, which obviously will challenge retail a little bit within that particular family.
Speaker #2: question comes from Tristan Thomas, with BMO Capital Markets.
Jonathan Root: And then just a couple more pieces that I'll touch on quickly. As we take a look, we are being careful and considered in what CDL retail and CDO wholesale shipment ship-in looks like. We do wanna make sure that those bikes really are put up on a pedestal, and we're being thoughtful about what we're shipping in, which obviously will challenge retail a little bit within that particular family. And then overall, we have the full year of Softail sales, so really, really excited that we have dealers who are well positioned. We've kind of moved some price points in a way that are pretty customer friendly. And so, overall, feeling good about where that is. So those are many of the gives and takes for 2026.
Jonathan Root: And then just a couple more pieces that I'll touch on quickly. As we take a look, we are being careful and considered in what CDL retail and CDO wholesale shipment ship-in looks like. We do wanna make sure that those bikes really are put up on a pedestal, and we're being thoughtful about what we're shipping in, which obviously will challenge retail a little bit within that particular family. And then overall, we have the full year of Softail sales, so really, really excited that we have dealers who are well positioned. We've kind of moved some price points in a way that are pretty customer friendly. And so, overall, feeling good about where that is. So those are many of the gives and takes for 2026.
Speaker #3: Hey, good morning. Can you just, the 150 million of annual run rate savings in 2027 and beyond that you guys called out, is that spread among all three way to, anything you can provide us kind of with segments?
Speaker #3: And then also, is there any cadence of that next year specifically would be very helpful as we build out our
Speaker #4: And then overall, we have the full year of soft sales. So really, really excited that we have dealers who are well-positioned. We've kind of moved some price points in a way that are pretty customer-friendly.
Speaker #3: models. Thanks. Yeah, hey
Speaker #1: Tristan, I'll take that. The 150 million would not incorporate anything at Livewire that would just be the motor company and HDFS. And in terms of cadence, you know, we would expect to realize some of those savings, you know, beginning of the calf of this year.
Speaker #4: And so overall, feeling good about where that is. So those are many of the puts and takes for 2026.
Speaker #1: We've not incorporated any restructuring charge in the guidance. So that would, you know, complement that. But we've been clear in saying we expect those savings to be realized on an annual basis starting in 2027.
Speaker #1: We've not incorporated any restructuring charge in the guidance. So that would, you know, complement that. But we've been clear in saying we expect those savings to be realized on an annual basis starting in 2027.
Speaker #2: Your next Great. question comes from Tristan Thomas with BMO Capital Markets.
Robin Farley: Great.
Robin Farley: Great.
Speaker #3: Hey, good morning. Can you—just the $150 million of annual run rate savings in 2027 and beyond that you guys called out—is that spread among all three segments?
Operator: Your next question comes from Tristan Thomas-Martin with BMO Capital Markets.
Operator: Your next question comes from Tristan Thomas-Martin with BMO Capital Markets.
Tristan Thomas-Martin: Hey, good morning. The $150 million of annual run rate savings in 2027 and beyond that you guys called out, is that spread among all three segments? And then also, is there anything to provide us, kind of, a cadence of that next year specifically? That would be very helpful as we build out our models. Thanks.
Tristan Thomas-Martin: Hey, good morning. The $150 million of annual run rate savings in 2027 and beyond that you guys called out, is that spread among all three segments? And then also, is there anything to provide us, kind of, a cadence of that next year specifically? That would be very helpful as we build out our models. Thanks.
Speaker #3: Great. Thank
Speaker #3: you. Your next
Speaker #2: question comes from James Hardiman, with
Speaker #2: Citi. Hey, good morning.
Speaker #3: And then also, is there any way to anything you can provide us kind of with cadence of that next year specifically would be very helpful as we build out our models.
Speaker #6: Thanks for taking my call. So any help you could give us sort of bridging what I think is about four to eight percent wholesale growth, if I sort of use the wholesale guide to where you ultimately land in terms of operating income still being a modest loss on the HDMC side?
Speaker #3: Thanks.
Speaker #1: Yeah. Hey, Tristan. I'll take that. The $150 million would not incorporate anything at LiveWire—that would just be the Motor Company and HDFS.
Artie Starrs: Yeah. Hey, Tristan, I'll take that. The $150 million would not incorporate anything at LiveWire. That would just be the motor company and HDFS. And in terms of cadence, you know, we would expect to realize some of those savings, you know, beginning in the back half of this year. We've not incorporated any restructuring charge in the guidance, so that would, you know, complement that. But we've been clear in saying we expect those savings to be realized on an annual basis starting in 2027.
Artie Starrs: Yeah. Hey, Tristan, I'll take that. The $150 million would not incorporate anything at LiveWire. That would just be the motor company and HDFS. And in terms of cadence, you know, we would expect to realize some of those savings, you know, beginning in the back half of this year. We've not incorporated any restructuring charge in the guidance, so that would, you know, complement that. But we've been clear in saying we expect those savings to be realized on an annual basis starting in 2027.
Speaker #1: And in terms of cadence, we would expect to realize some of those savings beginning of the calf of this year. We've not incorporated any restructuring charge in the guidance.
Speaker #6: Obviously, there are some tariffs in there. Sounds like there's some de-leverage as we think about sort of production versus wholesale. And then I guess I'm also curious on the ASP side or the mix side.
Speaker #1: So that would complement that. But we've been clear in saying we expect those savings to be realized on an annual basis starting in Q4.
Speaker #1: 2027. Great.
Speaker #3: Thank
Speaker #3: you. Your next question comes
Speaker #6: I think what I'm hearing is that even though inventories for the year will be flat, touring will be down. So you're going to be undershipping touring just curious what impact that might have on ASP and/or mix.
Speaker #2: from James Hardyman with Citi.
Tristan Thomas-Martin: Great. Thank you.
Tristan Thomas-Martin: Great. Thank you.
Speaker #6: Hey, good morning. Thanks for taking my call. So, any help you could give us sort of bridging what I think is about 4% to 8% wholesale growth, if I sort of use the wholesale guide, to where you ultimately land in terms of operating income still being a modest loss on the HDMC side?
Operator: Your next question comes from James Hardiman with Citi.
Operator: Your next question comes from James Hardiman with Citi.
James Hardiman: Hey, good morning. Thanks for taking my call. So, any help you could give us sort of bridging what I think is about 4% to 8% wholesale growth, if I sort of use the wholesale guide, to where you ultimately land in terms of operating income still being, you know, a modest loss on the HDMC side. Obviously, there's some tariffs in there. Sounds like there's some deleverage as we think about sort of production versus wholesale. And then I guess I'm also curious on the ASP side or the mix side. I think what I'm hearing is that even though inventories for the year will be flat, touring will be down, so you're gonna be under shipping touring. Just curious what impact that might have on ASP and/or mix. Thanks.
James Hardiman: Hey, good morning. Thanks for taking my call. So, any help you could give us sort of bridging what I think is about 4% to 8% wholesale growth, if I sort of use the wholesale guide, to where you ultimately land in terms of operating income still being, you know, a modest loss on the HDMC side. Obviously, there's some tariffs in there. Sounds like there's some deleverage as we think about sort of production versus wholesale. And then I guess I'm also curious on the ASP side or the mix side. I think what I'm hearing is that even though inventories for the year will be flat, touring will be down, so you're gonna be under shipping touring. Just curious what impact that might have on ASP and/or mix. Thanks.
Speaker #6: Thanks. Okay.
Speaker #4: Yeah, great question. Thank you, James. Hope you're doing well. As we take a look at where we are, we certainly have a number of factors that come into play as we look at motor company operating income in 26 versus 25.
Speaker #6: Obviously, there's some tariffs in there. Sounds like there's some de-leverage as we think about sort of production versus wholesale. And then I guess I'm also curious on the ASP side or the mix side.
Speaker #4: So you're right. If you kind of look kind of where we land from a midpoint perspective, really, really close to flat. We have a number of factors that come into play.
Speaker #4: So we have a full year of tariff exposure. So that adds about a 25 million headwind year over year. Again, going back to the tariff update page that we included within the deck, you can see some of the details there.
Speaker #6: I think what I'm hearing is that even though inventories for the year will be flat, Touring will be down. So you're going to be undershipping Touring. Just curious what impact that might have on ASP and/or mix.
Speaker #4: Obviously, as we complete our final year of getting disciplined back into the operating environment in terms of balancing out wholesale and production that poses a little bit of a de-leverage challenge.
Speaker #6: Thanks.
Speaker #4: Okay. Yeah. Great question. Thank you, James. Hope you're doing well. As we take a look at where we are, we certainly have a number of factors that come into play as we look at Motor Company operating income in '26 versus '25.
Speaker #4: And then we certainly have some associated supply chain impacts that we're contemplating. As you talked about, we do have a broadly one-to-one relationship between retail and wholesale.
Jonathan Root: Okay. Yeah, great question. Thank you, James. Hope you're doing well. As we take a look at where we are, we certainly have a number of factors that come into play as we look at Motor Company operating income in 2026 versus 2025. So you're right. If you kind of look kind of where we land from a midpoint perspective, really, really close to flat. We have a number of factors that come into play. So we have a full year of tariff exposure. So that adds about a $25 million headwind year over year. Again, going back to the tariff update page that we included within the deck, you can see some of the details there.
Jonathan Root: Okay. Yeah, great question. Thank you, James. Hope you're doing well. As we take a look at where we are, we certainly have a number of factors that come into play as we look at Motor Company operating income in 2026 versus 2025. So you're right. If you kind of look kind of where we land from a midpoint perspective, really, really close to flat. We have a number of factors that come into play. So we have a full year of tariff exposure. So that adds about a $25 million headwind year over year. Again, going back to the tariff update page that we included within the deck, you can see some of the details there.
Speaker #4: So you're right. If you kind of look at where we land from a midpoint perspective, we're really, really close to flat. We have a number of factors that come into play.
Speaker #4: Which does have an offsetting positive and then as we look, there are some non-motorcycle implications around P&A and A&L. So all in as we look at where we are if you do a midpoint comparison just effectively sitting right on top.
Speaker #4: So we have a full year of tariff exposure. So that adds about a 25 million dollar headwind year over year. Again, going back to the tariff update page that we included within the deck, you can see some of the details there.
Speaker #4: And obviously, an improved setup for out-year performance as we work through our final issues in.
Speaker #4: Obviously, as we complete our final year of getting disciplined back into the operating environment in terms of balancing out wholesale and production that poses a little bit of a de-leverage challenge.
Speaker #3: Got
Speaker #3: it. Your next question comes
Jonathan Root: Obviously, as we complete our final year of getting discipline back into the operating environment in terms of balancing out wholesale and production, that poses a little bit of a deleverage challenge. And then we certainly have some associated supply chain impacts that we're contemplating. As you talked about, we do have a broadly 1-to-1 relationship between retail and wholesale, which does have an offsetting positive. And then as we look, there are some non-motorcycle implications around PNA and ANL. So all in, as we look at where we are, if you do a midpoint comparison, just effectively sitting right on top, and obviously an improved setup for out-year performance as we work through our final issues in 2020.
Speaker #2: from Brandon Rowe, with Luke Capital.
Jonathan Root: Obviously, as we complete our final year of getting discipline back into the operating environment in terms of balancing out wholesale and production, that poses a little bit of a deleverage challenge. And then we certainly have some associated supply chain impacts that we're contemplating. As you talked about, we do have a broadly 1-to-1 relationship between retail and wholesale, which does have an offsetting positive. And then as we look, there are some non-motorcycle implications around PNA and ANL. So all in, as we look at where we are, if you do a midpoint comparison, just effectively sitting right on top, and obviously an improved setup for out-year performance as we work through our final issues in 2020.
Speaker #3: Good morning. Thank you for taking my question. I just had a question around the used versus new pricing spread. How do you feel about where that spread is right now?
Speaker #4: And then we certainly have some associated supply chain impacts that we're contemplating. As you talked about, we do have a broadly one-to-one relationship between retail and wholesale.
Speaker #3: And obviously, with all of this promotional activity, do you see that spread tightening as you kind of pull away the promotional activity or is this something that the spread going to keep expanding as maybe prices go higher and it seems like people are digging in lower and lower into the used values for a deal?
Speaker #4: Which does have an offsetting positive, and then as we look, there are some non-motorcycle implications around P&A and A&L. So all in, as we look at where we are, if you do a midpoint comparison, just effectively sitting right on top.
Speaker #3: Just any comments there on the spread? Thank
Speaker #4: And obviously, an improved setup for out-year performance as we work through our final issues in
Speaker #3: you. Okay.
Speaker #4: Thanks, Brandon. I'll start with a couple of numbers and then maybe Artie can provide some perspective. In addition, so I think from a couple of different factors as you speak about.
Speaker #4: '26. Got
Speaker #2: Your next question comes from it. Brandon Rowe with Loop
Speaker #2: Capital. Good morning.
Speaker #4: So as we think about where we're sitting today from a Q1 standpoint, we were forthcoming in terms of the charge that we took in Q4 of '25 in order to make sure that we were positioned to clear through touring in the way that Artie has talked about.
Artie Starrs: Got it.
James Hardiman: Got it.
Speaker #3: Thank you for taking my question. I just had a question around the used versus new pricing spread. How do you feel about where that spread is right now?
Operator: Your next question comes from Brandon Rolle with Loop Capital.
Operator: Your next question comes from Brandon Rolle with Loop Capital.
Brandon Rolle: Good morning. Thank you for taking my question. I just had a question around the used versus new pricing spread. How do you feel about where that spread is right now? And, you know, obviously, with all this promotional activity, do you see that spread tightening as you kind of pull away the promotional activity? Or is this something that the spread gonna keep expanding as maybe prices go higher, and it seems like people are digging in lower and lower, you know, into the used values for a deal? Just any comments there on the spread. Thank you.
Brandon Rolle: Good morning. Thank you for taking my question. I just had a question around the used versus new pricing spread. How do you feel about where that spread is right now? And, you know, obviously, with all this promotional activity, do you see that spread tightening as you kind of pull away the promotional activity? Or is this something that the spread gonna keep expanding as maybe prices go higher, and it seems like people are digging in lower and lower, you know, into the used values for a deal? Just any comments there on the spread. Thank you.
Speaker #3: And obviously, with all of this promotional activity, do you see that spread tightening as you kind of pull away the promotional activity or is this something that the spread going to keep expanding as maybe prices go higher and it seems like people are digging in lower and lower into the used values for a deal?
Speaker #4: So relative to the factor on the new side as we think about affordability, monthly payments, and impacts for consumers, we recognize that we're doing we're putting some programs in market at the moment.
Speaker #3: Just any comments there on the spread? Thank you.
Speaker #4: That are helping drive a reduction in the gap between new and used motorcycles. So we have some stimulus that we think is helping drive a really nice value equation for our customers.
Speaker #4: Okay. Thanks, Brandon. I'll start with a couple of numbers and then maybe Artie can provide some perspective. In addition, so I think from a couple of different factors as you speak about.
Jonathan Root: Okay. Thanks, Brandon. I'll start with a couple of numbers, and then maybe Artie can provide some perspective in addition. So I think from a couple of different factors as you speak about. So as we think about where we're sitting today, from a Q1 standpoint, we were, you know, forthcoming in terms of the charge that we took in Q4 of $25 in order to make sure that we were positioned to clear through Touring in the way that Artie has talked about. So relative to the factor on the new side, as we think about affordability, monthly payments, and impacts for consumers, we recognize that we're putting some programs in market at the moment that are helping drive a reduction in the gap between new and used motorcycles.
Jonathan Root: Okay. Thanks, Brandon. I'll start with a couple of numbers, and then maybe Artie can provide some perspective in addition. So I think from a couple of different factors as you speak about. So as we think about where we're sitting today, from a Q1 standpoint, we were, you know, forthcoming in terms of the charge that we took in Q4 of $25 in order to make sure that we were positioned to clear through Touring in the way that Artie has talked about. So relative to the factor on the new side, as we think about affordability, monthly payments, and impacts for consumers, we recognize that we're putting some programs in market at the moment that are helping drive a reduction in the gap between new and used motorcycles.
Speaker #4: So as we think about where we're sitting today from a Q1 standpoint, we were forthcoming in terms of the charge that we took in Q4 of '25 in order to make sure that we were positioned to clear through touring in the way that Artie has talked about.
Speaker #4: I think what's really exciting is that in addition to that, as we take a look at what we're seeing on used values, we have seen sort of stabilization of some nice improvement in used values and what we're seeing come through at both auction and retail.
Speaker #4: On the used side. So I think that that dynamic is also helping us from an overall consumer standpoint. So a couple of nice factors to bring that
Speaker #4: On the used side. So I think that that dynamic is also helping us from an overall consumer standpoint. So a couple of nice factors to bring that together.
Speaker #4: So relative to the factor on the new side as we think about affordability, monthly payments, and impacts for consumers, we recognize that we're doing we're putting some programs in market at the moment that are helping drive a reduction in the gap between new and used motorcycles.
Speaker #3: Yeah. And I think one of the insights we're seeing is that some of the parts of our portfolio that we've walked away from in recent years the used values have jumped.
Speaker #3: So it's informing some of our product development work. So it's encouraging to see core equities that we've been known for a long time really responding quite well in the used market.
Speaker #4: So we have some stimulus that we think is helping drive a really nice value equation for our customers. I think what's really exciting is that in addition to that, as we take a look at what we're seeing on used values, we have seen sort of stabilization of some nice improvement in used values and what we're seeing come through at both auction and retail.
Speaker #3: And it's informing some of the innovation that you're going to be seeing from
Jonathan Root: So we have some stimulus that we think is helping drive a really nice value equation for our customers. I think what's really exciting is that in addition to that, as we take a look at what we're seeing on used values, we have seen sort of stabilization and some nice improvements in used values and what we're seeing come through at both auction and retail on the used side. So I think that that dynamic is also helping us from an overall consumer standpoint. So a couple of nice factors to bring that together.
Jonathan Root: So we have some stimulus that we think is helping drive a really nice value equation for our customers. I think what's really exciting is that in addition to that, as we take a look at what we're seeing on used values, we have seen sort of stabilization and some nice improvements in used values and what we're seeing come through at both auction and retail on the used side. So I think that that dynamic is also helping us from an overall consumer standpoint. So a couple of nice factors to bring that together.
Speaker #3: us. Great.
Speaker #5: Thank you.
Speaker #2: Your next question comes from Jamie Katz, with Morningstar. Jamie, your line is open.
Speaker #4: On the used side, so I think that that dynamic is also helping us from an overall consumer standpoint. So a couple of nice factors to bring that together.
Speaker #6: Hi. Sorry. I'm hoping that you guys can talk about maybe what you envision as the potential for the motor company operating margin beyond '26.
Speaker #3: Yeah. And I think one of the insights we're seeing is that some of the parts of our portfolio that we've walked away from in recent years—the used values have jumped.
Speaker #6: Do we go back to a high single-digit rate? Do you guys see more opportunity to expand margin if maybe we can get some volume improvement to take hold and just sort of what you see as the potential for that segment over time?
Artie Starrs: Yeah, and I think one of the insights we're seeing is that some of the parts of our portfolio that we've walked away from in recent years, the used values have jumped. So it's encouraging to see core equities that, you know, we've been known for a long time, really responding quite well in the used market, and it's informing some of the innovation that you're gonna be seeing from us.
Artie Starrs: Yeah, and I think one of the insights we're seeing is that some of the parts of our portfolio that we've walked away from in recent years, the used values have jumped. So it's encouraging to see core equities that, you know, we've been known for a long time, really responding quite well in the used market, and it's informing some of the innovation that you're gonna be seeing from us.
Speaker #3: So it's informing some of our product development work. So it's encouraging to see core equities that we've been known for a long time really responding quite well in the used market.
Speaker #3: Yeah, Jamie. That's a great question. And it's something we're going to clearly call out in our May investor meeting and strategy discussion and earnings.
Speaker #3: And it's informing some of the innovation that you're going to be seeing from
Speaker #3: us. Great.
Speaker #5: Thank
Speaker #5: you. Your next question comes
Speaker #3: So if you tune in then, I'll give you more detail. Obviously, we're we don't think the current results reflect the full potential of the company.
Speaker #2: from Jamie Katz with Morningstar. Jamie, your line is
Brandon Rolle: Great. Thank you.
Brandon Rolle: Great. Thank you.
Operator: Your next question comes from Jamie Katz with Morningstar. Jamie, your line is open.
Operator: Your next question comes from Jaime Katz with Morningstar. Jamie, your line is open.
Speaker #3: So a lot of upside and look forward to updating you in
Speaker #2: open. Hi.
Speaker #6: Sorry. I'm hoping that you guys can talk about maybe what you envision as the potential for the motor company operating margin beyond '26. Do we go back to a high single-digit rate?
Speaker #6: Okay. May. And then do you have a target for leverage metrics at the end of 2026, given that you're still paying down some
Speaker #6: Okay. May. And then do you have a target for leverage metrics at the end of 2026, given that you're still paying down some debt?
Jamie Katz: Hi. Sorry. I'm hoping that you guys can talk about maybe what you envision as the potential for the motor company operating margin beyond 26. Like, do we go back to a high single-digit rate? Do you guys see more opportunity to expand margin, if maybe we can get some volume improvement to take hold, and just sort of what you see as the potential for that segment over time?
Jaime M. Katz: Hi. Sorry. I'm hoping that you guys can talk about maybe what you envision as the potential for the motor company operating margin beyond 26. Like, do we go back to a high single-digit rate? Do you guys see more opportunity to expand margin, if maybe we can get some volume improvement to take hold, and just sort of what you see as the potential for that segment over time?
Speaker #4: Yeah. I think everything from an overall capital allocation perspective is already talked about in our Q1 earnings call that we do in May. We'll make sure that we walk through strategy.
Speaker #6: Do you guys see more opportunity to expand margin if maybe we can get some volume improvement to take hold, and just sort of what you see as the potential for that segment over time?
Speaker #4: Overall capital allocation in our approach to the way that we're running the business on leverage for HDMC as well as HDFS. And then what we look at on a go forward basis we will be sure that we cover all of that then.
Speaker #3: Yeah, Jamie, that's a great question. And it's something we're going to clearly call out in our May investor meeting and strategy discussion and earnings.
Artie Starrs: Yeah, Jamie, that's a great question, and it's something we're gonna clearly call out in our May, you know, investor meeting, strategy discussion, and earnings. So, if you, you know, tune in then, I'll give you more detail. Obviously, we don't think the current results reflect the full potential of the company, so a lot of upside, and look forward to updating you in May.
Artie Starrs: Yeah, Jamie, that's a great question, and it's something we're gonna clearly call out in our May, you know, investor meeting, strategy discussion, and earnings. So, if you, you know, tune in then, I'll give you more detail. Obviously, we don't think the current results reflect the full potential of the company, so a lot of upside, and look forward to updating you in May.
Speaker #3: So if you tune in then, I'll give you more detail. Obviously, we don't think the current results reflect the full potential of the company.
Speaker #6: Okay. So no target yet. But thank you.
Speaker #3: Yeah. No target. The one thing I just remind is the 700 million euro note that we're going to be paying off. That's the one thing that
Speaker #3: So, a lot of upside, and I look forward to updating you in May.
Speaker #3: we've called out. Thank
Speaker #6: Okay. And then do you have a target for leverage metrics at the end of 2026 given that you're still paying down some debt?
Jamie Katz: Okay. And then, do you guys have a target for leverage metrics at the end of 2026, given that you're still paying down some debt?
Jaime M. Katz: Okay. And then, do you guys have a target for leverage metrics at the end of 2026, given that you're still paying down some debt?
Speaker #4: Yeah, I think everything from an overall capital allocation perspective is already talked about in our Q1 earnings call that we do in May. We'll make sure that we walk through strategy.
Jonathan Root: Yeah, I think, you know, everything from an overall capital allocation perspective, as I already talked about in our Q1 earnings call that we do in May, we'll make sure that we walk through strategy. Overall capital allocation, our approach to the way that we're running the business on leverage, for HDMC as well as HDFS, and then what we look at on a go-forward basis, we will be sure that we cover all of that then.
Jonathan Root: Yeah, I think, you know, everything from an overall capital allocation perspective, as I already talked about in our Q1 earnings call that we do in May, we'll make sure that we walk through strategy. Overall capital allocation, our approach to the way that we're running the business on leverage, for HDMC as well as HDFS, and then what we look at on a go-forward basis, we will be sure that we cover all of that then.
Speaker #4: Overall capital allocation in our approach to the way that we're running the business on leverage for HDMC as well as HDFS. And then what we look at on a go-forward basis, we will be sure that we cover all of
Speaker #4: that then. Okay.
Speaker #6: So no target yet. But thank you.
Speaker #3: Yeah, no target. The one thing I just remind is the €700 million note that we're going to be paying off. That's the one thing that we've called out.
Jamie Katz: Okay. So no target yet? Thank you.
Jaime M. Katz: Okay. So no target yet? Thank you.
Artie Starrs: Yeah, so sorry. The one, the one thing I'd just remind is the EUR 700 million euro note that we're gonna be, you know, paying off. That's the one thing-
Artie Starrs: Yeah, so sorry. The one, the one thing I'd just remind is the EUR 700 million euro note that we're gonna be, you know, paying off. That's the one thing-
Speaker #6: Thank you.
Jamie Katz: Yeah.
Jaime M. Katz: Yeah.
Artie Starrs: that we, we've called out.
Artie Starrs: that we, we've called out.
Jamie Katz: Thank you.
Jaime M. Katz: Thank you.
Operator: There are no further questions at this time. This concludes today's conference call. Thank you all for joining. You may now disconnect.
Operator: There are no further questions at this time. This concludes today's conference call. Thank you all for joining. You may now disconnect.
