Harley-Davidson Stock Rallies Despite Slump In Bike Sales - Here's Why

Harley-Davidson (NYSE:HOG) shares are trading higher on Wednesday after the second-quarter fiscal 2025 earnings.

The company reported a 23% year-on-year quarterly sales decline to $1.04 billion, missing the analyst consensus estimate of $1.11 billion.

Harley-Davidson’s earnings per share of 88 cents missed the analyst consensus estimate of 100 cents.

Global motorcycle retail sales down 15% Y/Y, driven by a volatile macroeconomic environment and overall consumer uncertainty.

Also Read: Why Is Motorcycle Manufacturer Harley-Davidson’s Stock Rising Today?

Revenue from the Motorcycles and Related Products segment (HDMC) decreased 23%, driven primarily by the planned decrease in wholesale shipments, partially offset by favorable global pricing and foreign currency.

Global motorcycle shipments decreased by 28% due to planned dealer inventory reduction and soft demand.

Revenue from Motorcycles fell 27%, Parts & Accessories dropped 4%, Apparel dropped 13%, and Licensing grew by 8%.

The gross profit margin in HDMC contracted 350 basis points Y/Y to 28.6%.

Consolidated operating income declined 53% primarily driven by a decline of 69% at HDMC. At the LiveWire segment, the operating loss improved by $10 million, 34% lower than the prior year’s loss.

Harley-Davidson generated approximately $367 million in cash from operating activities in the quarter. As of June 30, it held cash and equivalents of $1.6 billion.

Partnership

Harley-Davidson Chairman and CEO Jochen Zeitz acknowledged that second-quarter results remained under pressure due to a challenging commercial environment for discretionary products and ongoing tariff uncertainty.

However, he emphasized the company’s excitement over securing a strategic partnership for HDFS with KKR (NYSE:KKR) and PIMCO, which delivers substantial value across the board. The transaction values HDFS at approximately 1.75 times its post-transaction book value and is expected to unlock $1.25 billion in cash.

Harley-Davidson plans to use the proceeds to reduce debt by $450 million and accelerate its $1 billion share buyback program by repurchasing $500 million in the second half of 2025. The company also retains the flexibility to invest up to $300 million in future growth opportunities.

Outlook

On May 1, 2025, Harley-Davidson withdrew its full-year 2025 financial outlook—originally issued on February 5—due to ongoing uncertainty around global tariffs and broader macroeconomic conditions.

Given the continued unpredictability in the global tariff environment and consumer demand for discretionary products, it still withheld its full-year 2025 financial outlook for HDMC.

For LiveWire, it projects an operating loss of $59–$69 million and expects total cash use to range between $50–$60 million.

Following the HDFS transaction, it expects HDFS to generate full-year 2025 operating income between $525 million-$550 million.

The stock has plunged 24% year-to-date as economic headwinds, including global tariffs, affected demand for its motorcycles. Leisure vehicle demand in the U.S. has declined as consumers pull back on non-essential spending amid economic uncertainty.

Harley-Davidson missed the topline estimates in three of the last four quarters and the EPS estimates in two of the last four quarters.

Price Action: HOG shares traded higher by 19.30% at $27.37 at last check on Wednesday.

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