Harley-Davidson's Mixed Ride: Beats Q2 Estimates, Plans Buyback, Trims Annual Outlook & More

Harley-Davidson Inc HOG reported second quarter HDMC and LiveWire combined revenue of $1.355 billion, beating the analyst consensus estimate of $1.28 billion.

Consolidated revenue in the second quarter was up 12% to $1.619 billion, driven primarily by an HDMC revenue increase of 13%. HDFS revenue was up 10% in the second quarter.

Global retail motorcycle sales declined 3%. North America retail performance was down 1%, with U.S. retail up slightly.

HOG’s EPS of $1.63 beat the analyst consensus of $1.40.

Gross profit margin in HDMC contracted 270 basis points Y/Y at 32.1%. Operating income in HDMC was $198 million (up 2%), with the operating margin decreasing 150 basis points to 14.7%.

Consolidated operating income for the quarter rose 9% to $241 million, with a margin of 14.9% versus 15.3% a year ago.

Harley-Davidson generated $578 million in cash from operating activities during six months. It held cash and equivalents of $2 billion as of June-end.

The company announced a new plan to repurchase $1 billion of its outstanding common stock through 2026.

The board’s authorization replaces existing share repurchase plans and is in addition to the $875 million in share repurchases since 2022 that the company has completed to return cash to its shareholders.

“Despite a challenging market, we are pleased with our second quarter performance, in which we grew our U.S. market share in a declining market, with notable unit growth of more than 11 percent in the important core category of Touring,” said Chairman, President and CEO Jochen Zeitz.

Outlook: Harley-Davidson revised FY24 HDMC revenue growth outlook to down 5%-9% (prior flat to down 9%) and operating income margin outlook from 12.6%-13.6% to 10.6%-11.6%.

HOG continues to expect FY24 capital investments of $225 million – $250 million.

Price Action: HOG shares are trading higher by 8.19% at $36.65 at last check Thursday.

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