Harley-Davidson forecasts weak 2025 as spending falters
Demand for leisure vehicles has fallen off since the pandemic, while sticky inflation and steep borrowing costs have forced cash-tight Americans to prioritise spending on necessities rather than luxuries.
The storied motorcycle maker has also struggled to gain traction with younger riders, who are choosing modern, feature-packed and affordable bikes from other manufacturers instead.
Retail sales of Harley's motorcycles in top market North America fell 13% in the fourth quarter due to persistent pressure from higher interest rates and lower sales of non-core motorcycles.
To offset some of the profitability strain, Harley has updated its lineup for 2025 to include more higher-margin Touring bikes and sharpen focus on custom-vehicle operations targeted at its more affluent customers.
CFRA Research analyst Garrett Nelson called Harley's results "ugly", but raised its rating on the stock to "sell" saying Street expectations would now "reset to more realistic levels".
He also partly attributed the weakness to consumer backlash around Harley's decision to scrap its Diversity, Equity and Inclusion (DEI) hiring quotas last year in response to criticism from conservatives.
Regarding U.S. President Donald Trump's proposed tariffs on Canada, Mexico and China, Harley executives said the company has yet to incorporate any new tariffs in its outlook, but has been taking "all possible actions" to mitigate their impact.
Harley does not have production in Canada or Mexico, and the majority of its U.S. profits are from domestically manufactured vehicles, it said.
It posted a fourth-quarter net loss of USD 117 million, or 93 cents per share, compared with a profit of USD 26 million, or 18 cents per share, last year.
Total revenue slumped 35% to USD 688 million. Analysts were expecting motorcycle revenue to rise 1.5% in 2025, per data compiled by LSEG.
