Harley up 6 percent in North America in Q1
Harley-Davidson, Inc. (HDI) recently reported a 6 percent jump in North America in its first quarter 2024 results, driven by sales of its new touring models.
“Harley-Davidson delivered a good start to the year with six percent retail growth in North America, our largest and most important region,” comments Jochen Zeitz, Chairman, president and CEO of Harley-Davidson. “We are very pleased with the reception of this year’s new product line-up, led by our new touring motorcycles, and look forward to continuing the positive momentum as the riding season comes into full swing.”
First Quarter 2024 Highlights and Results:
- HDMC operating income margin of 16.2 percent
- North America motorcycle retail up 6 percent, driven by sales of new touring motorcycles introduced at the end of January
- HDMC revenue down 5 percent, primarily due to a planned decrease in motorcycle shipments
- HDFS operating income down 8 percent, while revenue was up 12 percent
- Repurchased $98 million of shares (2.5 million shares) on a discretionary basis
- LiveWire successfully launched its 3rd electric motorcycle, S2 Mulholland, and became the market leader in the U.S. for on-road electric motorcycles
First Quarter 2024 Results
Consolidated revenue in the first quarter was down 3 percent, driven by a 5 percent decrease in HDMC revenue, partially offset by 12 percent growth in HDFS revenue.
Consolidated operating income in the first quarter was down 29 percent, resulting from declines of 29 percent at HDMC and 8 percent at HDFS, respectively, and an operating loss of $29 million in the LiveWire segment. The consolidated operating income margin in the first quarter was 15 percent relative to 21 percent in the first quarter a year ago.
| $ in millions | 1st quarter | ||
| 2024 | 2023 | Change | |
| Motorcycle Shipments (thousands) | 57.7 | 62.2 | -7 % |
| Revenue | $1,476 | $1,558 | -5 % |
| Motorcycles | $1,222 | $1,302 | -6 % |
| Parts & Accessories | $166 | $168 | -1 % |
| Apparel | $64 | $71 | -10 % |
| Licensing | $9 | $6 | 44 % |
| Other | $15 | $10 | 51 % |
| Gross Margin | 31.2 % | 35.8 % | -4.5 pts. |
| Operating Income | $238 | $336 | -29 % |
| Operating Margin | 16.2 % | 21.6 % | -5.4 pts. |
First quarter global motorcycle shipments decreased 7 percent, in-line with our expectations. Revenue was down 5 percent driven by the decrease in wholesale shipments and lower global pricing, partially offset by favorable mix. Parts & Accessories revenue was down 1 percent, while Apparel revenue was down 10 percent, as the prior period included anniversary product apparel.
First quarter gross margin was down 4.5 points due to the impacts of pricing and sales incentives, lower volume, and higher manufacturing costs. First quarter operating income margin was down 5.4 points due to the factors above, where operating expenses were roughly flat in the quarter.
Retail motorcycle sales
| Motorcycles (thousands) | 1st quarter | ||
| 2024 | 2023 | Change | |
| North America | 27.5 | 26.0 | 6 % |
| EMEA | 5.3 | 5.9 | -11 % |
| Asia Pacific | 6.0 | 6.9 | -12 % |
| Latin America | 0.6 | 0.6 | 2 % |
| Worldwide Total | 39.4 | 39.4 | 0 % |
Global retail motorcycle sales in the first quarter were flat versus prior year. North America retail performance was up 6 percent, driven by sales of the new touring motorcycles, which were introduced at the end of January. International markets did not receive new 2024 Street Glide and Road Glide motorcycles in dealerships until the end of the first quarter. The decline in EMEA of 11 percent was driven by weakness in Germany and France. The decline in APAC of 12 percent was due to weakness in particular in China. Latin America experienced modest growth in both Mexico and Brazil.
HDFS’ operating income declined by $5 million in the first quarter or 8 percent. This was due to higher interest expense and a higher provision for credit losses which was driven by several factors, similar to last year, relating to the current macro-economic environment. Total quarter ending financing receivables were $7.9 billion, which was up 4 percent versus prior year, primarily due to an increase in commercial finance receivables.
LiveWire revenue for the first quarter decreased by 39 percent. The revenue decline was due to a decrease in STACYC electric balance bike volumes and electric motorcycle product mix. Electric motorcycle unit sales increased, driven by new product launches, including the launch of the new S2 Mulholland model in the first quarter 2024.
2024 Financial Outlook
For the full year 2024, the Motor Company reaffirms the following guidance and continues to expect:
- HDMC: revenue flat to down 9 percent and operating income margin of 12.6 to 13.6 percent
- HDFS: operating income flat to up 5 percent
- LiveWire: electric motorcycle unit sales of 1,000 to 1,500
- Harley-Davidson, Inc: capital investments of $225 to $250 million
- For the full year 2024, the Company is revising its LiveWire operating loss guidance and now expects an improved operating loss of $105 to $115 million, from previous guidance of an operating loss of $115 to $125 million.
