Harley-Davidson Q3 Earnings: Sales Drop 26%, High Interest Rates Hit Motorcycle Demand And Margins, Lowers 2024 Outlook

On Thursday, Harley-Davidson Inc HOG reported third-quarter 2024 financial results. It clocked HDMC and LiveWire combined revenue of $881.21 million.

Consolidated revenue declined by 26% to $1.15 billion. The analyst consensus estimate was $965.78 million.

The consolidated revenue decline was driven primarily by a 32% revenue fall for HDMC and partially offset by a 10% revenue increase for HDFS.

HOG stock slid after the print.

Also Read: Amphenol CEO Credits 26% Sales Boost To IT, Mobile Networks, Acquisitions: ‘We Again Realized Strong Profitability'

Global retail motorcycle sales declined 13%, and North American retail performance was down 10%. Dealers observed a slowdown in customer traffic due to the higher interest rate environment and macro uncertainty.

International markets performed weaker than expected, down 18%, with the EMEA and APAC regions posting double-digit declines.

Harley-Davidson's EPS of $0.91 beat the analyst consensus of $0.79.

The gross profit margin in HDMC contracted 160 basis points Y/Y at 30.1%. Operating income in HDMC was $55 million (down by 69%), with the operating margin decreasing 720 basis points to 6.3%.

Consolidated operating income for the quarter declined by 43% to $106 million, with a margin of 9.2% versus 13.5% a year ago.

Harley-Davidson generated $930.7 million in operating cash flow during nine months and held cash of $2.24 billion as of September end.

"We have worked diligently through the quarter to mitigate the impact of high interest rates, and macroeconomic and political uncertainty, that continue to put pressure on our industry and customers, especially in our core markets," said Jochen Zeitz, Chairman, President and CEO, Harley-Davidson.

Outlook: Harley-Davidson lowered its fiscal 2024 HDMC revenue growth outlook to a decline of 14%-16%  (prior down 5%-9%) and operating income margin outlook to 7.5%-8.5% (prior 10.6%-11.6%).

Harley-Davidson reiterated fiscal 2024 capital investment guidance of $225 million – $250 million.

Price Action: HOG stock is down by 2.58% at $33.25 premarket at last check Thursday.

Also Read:

• Roper Tech Q3 Earnings: 13% Revenue Growth, Higher Cash Flow, Lifts Full-Year Outlook

Image via Harley Davidson