Harley shipped 39,200 motorcycles in the second quarter, a 9.4% jump from a year ago. Wall Street wanted 40,810. That gap of roughly 1,600 bikes was enough to send HOG stock down about 1% in premarket trading Thursday, even though earnings per share came in $0.11 ahead of analyst estimates.
Net income dropped to $80 million, or $0.75 per share, from $108 million, or $0.88 per share, in Q2 2025. Revenue fell 6% to $1.23 billion. Gross margin slipped from 28.6% to 27.5%, squeezed by pricier raw materials, an unfavorable product mix, and currency headwinds hitting international sales. EMEA was the softest region, down 9%, while Asia Pacific went nowhere. North America grew 3%, Latin America added 4%, and worldwide sales edged up just 1% in total.
Operating income fell 32%, and the main culprit was the financial services arm, HDFS, which is deliberately shifting to a lighter capital model. That transition creates short-term pain in the income statement even if it makes structural sense longer term.
CEO Starrs is betting on cheaper bikes
CEO Artie Starrs has been steering Harley away from its traditional heavy touring lineup. The entry price now starts around $10,000, and the company's "Back to the Bricks" strategy is built around reviving classic models and pulling in younger riders with smaller-engine options. It is a real cultural shift for a brand whose core customer has historically been someone in their fifties on a Road Glide. Whether that audience will actually show up in showrooms is still the open question.
The electric division, LiveWire, trimmed its operating loss slightly, from $19 million to $18 million year-on-year. Progress, but slow. The full-year loss for LiveWire is still expected to land between $70 million and $80 million, with capital spending of $175 million to $200 million behind it.
Guidance goes up anyway
Despite missing the shipment target, Harley raised its full-year retail sales forecast to 133,500 138,500 units, up from the prior range of 130,000 135,000. HDMC operating income guidance moved to $10 million $50 million, a substantial improvement from the previous range of negative $40 million to $10 million. HDFS guidance was also lifted, to $55 million $65 million from $45 million $60 million.
So the company is guiding higher even after a quarter where revenue shrank and margins compressed. That combination tends to make investors cautious rather than excited, which explains why the stock reaction was muted rather than positive.
This article is for informational purposes only and does not constitute financial advice or a recommendation to buy or sell any securities.
