Harley-Davidson’s third quarter was marked by results that surpassed Wall Street’s expectations for both revenue and profit, yet the market responded negatively, reflecting investor uncertainty about underlying demand and future growth. Management attributed the performance to the execution of a capital-light transformation in its financial services arm, improved inventory management, and targeted promotional efforts. CEO Arthur Starrs acknowledged the need to strengthen dealer profitability and adapt to a challenging macro environment, highlighting actions such as market-responsive promotions and inventory reduction, particularly in the touring segment. Starrs noted, “a healthy Harley depends on a healthy dealer network,” underscoring the renewed focus on supporting dealers amid soft consumer demand.
Is now the time to buy HOG? Find out in our full research report (it’s free for active Edge members).
Harley-Davidson (HOG) Q3 CY2025 Highlights:
- Revenue: $1.34 billion vs analyst estimates of $1.30 billion (16.5% year-on-year growth, 2.8% beat)
- Adjusted EBITDA: $317.4 million vs analyst estimates of $265.9 million (23.7% margin, 19.3% beat)
- Operating Margin: 35.4%, up from 9.2% in the same quarter last year
- Motorcycles Sold: 36,524, up 9,004 year on year
- Market Capitalization: $2.98 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Harley-Davidson’s Q3 Earnings Call
- Craig Kennison (Baird) asked about overcoming demographic headwinds and attracting younger riders. CEO Arthur Starrs emphasized product affordability and brand repositioning, citing the upcoming Sprint bike and more playful marketing as key steps.
- Stephen Grambling (Morgan Stanley) questioned the specifics of market-responsive promotions. Starrs and CFO Jonathan Root explained targeted financing offers and price experimentation, particularly in high-inventory segments, to drive dealer traffic and sales.
- Noah Zatzkin (KeyBanc) inquired about the timing and financial impact of the HDFS transaction. Root confirmed that most benefits were realized in Q3, with additional cash flexibility expected in early 2026, supporting future investments.
- Robin Farley (UBS) sought clarification on inventory reduction and shipment expectations for next year. Root indicated further inventory reductions are planned, especially in touring models, but stopped short of providing shipment guidance.
- Joseph Altobello (Raymond James) pressed for details on normalized inventory levels and future HDFS income. Root acknowledged expected inventory levels and remained cautious about providing forward financial guidance, while highlighting ongoing analysis of transaction timing and strategic capital uses.
Catalysts in Upcoming Quarters
Looking ahead, the StockStory team will monitor (1) the pace at which Harley-Davidson’s new pricing strategies and affordable product launches attract new and younger riders, (2) progress in dealer inventory reduction and profitability, particularly in the touring and CVO segments, and (3) the tangible impact of the HDFS capital-light transition on cash deployment for debt reduction and share repurchases. The evolving tariff environment and consumer sentiment will also remain important factors to track.
Harley-Davidson currently trades at $25.26, down from $27.11 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free for active Edge members).
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