HOG — Harley-Davidson, Inc.

Harley-Davidson Q2 2026 Earnings Call Summary

1. Key Financial Results and Metrics

• Revenue: HDMC revenue increased by 6% to $1.1 billion, with motorcycle revenue at $848 million.
• Retail Sales: North American retail sales rose 3% year-over-year, totaling approximately 30,000 motorcycles sold. Global retail sales were up 1% with 42,500 motorcycles sold.
• Operating Income: HDMC operating income was $72 million, up from $61 million in Q2 2025, resulting in an operating income margin of 6.6%.
• EBITDA: Adjusted EBITDA was $115 million, with a margin of 10.4%, compared to $97 million and 9.3% in the prior year.
• Earnings Per Share (EPS): Q2 EPS was $0.75, down from $0.88 in Q2 2025.
• Cash Position: End of Q2 cash and equivalents stood at $1.9 billion, up from $1.6 billion year-over-year.

2. Strategic Updates and Business Highlights

• Back to the Bricks Strategy: The company is in a transition year focused on resetting the business, improving dealer confidence, and enhancing execution.
• Dealer Inventory Health: Over 85% of dealer inventory was model year 2026 products, marking the healthiest inventory position in years. Dealer profitability is expected to double in 2026.
• Product Launches: Successful launches of the Super Glide and Deadwood motorcycles have generated positive market enthusiasm. The focus on customization is central to the brand's strategy.
• HDFS Performance: Harley-Davidson Financial Services (HDFS) reported operating income of $22 million, with lower interest expenses due to a reduced retail loan portfolio.

3. Forward Guidance and Outlook

• Increased Guidance: Full-year guidance for HDMC retail units is raised to 133,500 to 138,500, up from 130,000 to 135,000. Operating income guidance for HDMC is now $10 million to $50 million, improved from a previous range of negative $40 million to positive $10 million.
• HDFS Operating Income: Expected to be between $55 million and $70 million, up from $45 million to $60 million.
• 2027 Targets: The company remains optimistic about achieving $150 million in fixed cost savings and $350 million in EBITDA.

4. Bad News, Challenges, or Points of Concern

• European Market Decline: Retail sales in EMEA decreased by 9%, with market share dropping from 4% to 3%. Adjustments are being made to improve performance in this region.
• Supplier Challenges: Domestic supplier issues have impacted margins, although management is focused on improving reliability and reducing supply chain friction.
• Tariff Uncertainty: Ongoing tariff complexities remain a concern, with expected costs between $75 million to $90 million for the year, though some recovery has been achieved.

5. Notable Q&A Insights

• Inventory Management: Dealers are expressing a desire for more inventory, indicating a shift from previous concerns about excess stock. The company is actively working on improving inventory mix and forecasting.
• Retail Environment: The retail environment in North America is described as good, with a normalized promotional landscape. The company noted that the second quarter's performance was consistent with expectations, despite some softness in the middle of the quarter.
• Future Product Launches: The Sprint and Sportster models are anticipated for 2027, with enthusiasm from dealers and riders noted.
• Tariff Clarifications: The $20 million tariff recovery in Q2 is included in the updated guidance, but overall tariff expectations remain unchanged.

This summary encapsulates Harley-Davidson's financial performance, strategic initiatives, and outlook while addressing challenges and insights from the Q&A session.