Harley-Davidson(HOG)2024-07-25 17:09Financial Data and Key Metrics Changes - Consolidated revenue increased by 12% in Q2 2024, driven by a 13% growth at HDMC and a 10% growth at HDFS [6][21] - Earnings per share improved to 1.22 in the prior year [22] - Consolidated operating income was 23 million or 10%, driven by higher retail and commercial finance receivables [13][29] - LiveWire reported a triple-digit increase in branded unit sales compared to Q2 2023, although overall revenue for LiveWire declined by 25% [18][33] Market Data and Key Metrics Changes - Retail sales of new motorcycles in the U.S. were slightly positive year-over-year, while EMEA retail sales declined by 1% and Asia Pacific saw a 16% decline, primarily due to weakness in China [6][7] - North America, including Canada, experienced a 1% decline in retail sales, while Latin America remained flat [7] Company Strategy and Development Direction - The company is focusing on balancing retail and wholesale expectations, with a target to reduce dealer inventory by approximately 30% [8] - The Hardwire strategic pillar emphasizes profitability and product innovation, with a strong focus on touring motorcycles [9][17] - A commitment to invest in core categories and partnerships, such as with Hero, is highlighted as a path to success [10][12] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the impact of high interest rates on consumer discretionary spending but noted a positive retail performance in the U.S. [6] - The company expects retail units sold and wholesale shipments to balance by the end of 2024, with a revised guidance for revenue down 5% to 9% [36][37] - Management remains optimistic about the long-term growth potential and the positive reception of new products [16][17] Other Important Information - Harley-Davidson received an 1 billion through 2026, reflecting confidence in cash flow generation and long-term earnings power [39] Q&A Session Summary Question: What does guidance assume for retail in 2024? - Management expects retail guidance for the full year to be flat to up 3% [42] Question: Can you talk about the second half gross margin assumption? - Management indicated that gross margin pressure is expected to continue due to pricing and sales incentives, but operational expenses are being managed effectively [45][48] Question: How did retail trend over the course of the quarter? - Management noted that retail sales were consistent throughout Q2, with no negative trends observed [51] Question: What is the outlook for retail growth in the second half? - Management expressed confidence in retail growth for the second half, citing good inventory availability and positive consumer reactions [52][66] Question: How is the dealer network performing amid closures? - Management is refining the dealer network to ensure profitability and sustainability, with a focus on optimal distribution [67][69] Question: What gives confidence in continued innovation? - Management highlighted a multi-year product portfolio plan initiated in 2021, with significant upcoming innovations [71]