Harley-Davidson(HOG) - 2025 Q1 - Quarterly Report

Financial Performance - Net income attributable to Harley-Davidson, Inc. was $133.1 million, or$1.07 per diluted share, in Q1 2025, down 43.3% from $234.9 million, or$1.72 per diluted share, in Q1 2024[133][149]. - HDMC segment operating income was $116.3 million in Q1 2025, a decrease of 51.2$238.4 million in Q1 2024, primarily due to a planned decrease in motorcycle shipments[134][150]. - Worldwide retail sales of new Harley-Davidson motorcycles declined 21.3% in Q1 2025 compared to Q1 2024, with North America down 24.0%[135]. - Revenue from motorcycle sales decreased by 29.3% to $863.9 million in Q1 2025, compared to$1.22 billion in Q1 2024[166]. - Retail unit sales of new Harley-Davidson motorcycles decreased by 21.3% year-over-year, totaling 31,010 units in Q1 2025 compared to 39,405 units in Q1 2024[156]. - U.S. retail sales declined by 25.3%, with 19,207 units sold in Q1 2025, down from 25,726 units in Q1 2024[156]. - Worldwide motorcycle shipments fell by 33.1% to 38,601 units in Q1 2025, down from 57,672 units in Q1 2024[165]. - LiveWire segment revenue decreased by 41.7% to $2.7 million in Q1 2025, down from$4.7 million in Q1 2024[170]. Operating Segments - The LiveWire segment reported an operating loss of $19.8 million in Q1 2025, an improvement from a loss of$29.2 million in the prior year quarter[134]. - HDFS segment operating income increased by 18.9% to $64.0 million in Q1 2025, driven by lower provision for credit losses and operating expenses[134][150]. - Operating income for the HDMC segment fell by 51.2$116.3 million in Q1 2025, down from $238.4 million in Q1 2024[166]. - Operating income increased by 18.9$64.0 million in Q1 2025, compared to $53.9 million in Q1 2024[174]. Inventory and Capital Expenditures - The Company expects a reduction of approximately 10$200 million and $225 million, down from previous expectations of$225 million to $250 million[146]. - Capital expenditures were$30.0 million in Q1 2025, down from $46.4 million in the same period last year[189]. Shareholder Returns - The Company plans to repurchase approximately$1 billion of shares from Q3 2024 through the end of 2026, including $350 million in discretionary repurchases in 2025[147]. - Share repurchases totaled$93.1 million in Q1 2025, compared to $107.8 million in Q1 2024[191]. Cash Flow and Debt - Cash flow from operating activities increased to$141.5 million in Q1 2025, up from $104.0 million in Q1 2024[186]. - The Company had$1.93 billion in cash and cash equivalents as of March 31, 2025[183]. - Total outstanding debt increased to $7.30 billion as of March 31, 2025, compared to$7.21 billion in the previous year[192]. Credit and Financing - Provision for credit losses decreased by $7.7 million to$53.3 million in Q1 2025, driven by lower actual credit losses[175]. - HDFS's retail credit losses have normalized to higher levels after a period of historically low levels, influenced by changing consumer credit behavior and macroeconomic conditions[218]. - The Company renewed its Canadian Conduit facility, increasing the total commitment by C$40 million to C$165 million, allowing for the purchase of eligible Canadian retail motorcycle finance receivables[198]. - The Company renewed its $1.50 billion U.S. Conduit Facility in November 2024, allowing for the transfer of U.S. retail motorcycle finance receivables to third-party banks[201]. Market Conditions and Risks - The Company is facing headwinds in the EV segment, with a belief that EV adoption will be slower than anticipated due to regulatory challenges and infrastructure issues[210]. - The Company is exposed to market risks from changes in foreign currency exchange rates, commodity prices, and interest rates, utilizing derivative financial instruments to mitigate these risks[220]. - The HDMC segment's operating results are significantly affected by fluctuations in the value of the U.S. dollar against foreign currencies, particularly the Euro and Australian dollar[221]. - HDFS's operating income is sensitive to interest rate changes, with the Company using interest rate caps to reduce fluctuations' impact[224]. Strategic Focus - The Company aims to manage costs and improve dealer capabilities to enhance retail sales of motorcycles and related products[217]. - The Company is focused on maintaining relationships with distributors and managing risks related to economic conditions and consumer demand[217]. - The Company plans to explore third-party investments in HDFS to align with its objectives without adversely affecting its business[219]. - The Company is committed to managing risks associated with climate change and related regulations[219].