Harley-Davidson details reset plan as Q4 loss widens

North America retail sales declined 13% for the full year but rose 5% in the fourth quarter, driven by strength in the Touring category.

Harley-Davidson is positioning 2026 as a transition year as it works to stabilize operations, align wholesale with retail demand and restore dealer confidence following a challenging 2025.

The Milwaukee-based OEM reported a fourth-quarter net loss of $279 million, compared to a loss of $117 million a year earlier. Consolidated revenue fell 28% to $496 million in the quarter. For the full year, revenue declined 14% to $4.47 billion from 2024.

According to Reuters, executives pointed to ongoing “choppiness and volatility” in global retail results amid continued pressure on big-ticket discretionary purchases. Sticky inflation, elevated borrowing costs and pricing sensitivity have weighed on demand, particularly outside North America.

CEO Artie Starrs described 2026 as a reset year.

“As we close out a challenging year for the company, we are taking deliberate actions to stabilize the business, restore dealer confidence, and align wholesale activity with retail demand,” Starrs said in a statement. “While near-term results reflect these actions, the progress we are seeing reinforces our confidence in the reset underway.”

Retail trends and dealer inventory

Global retail motorcycle sales totaled 132,535 units in 2025, down 12% year over year. North America retail sales declined 13% for the full year but rose 5% in the fourth quarter, driven by strength in the Touring category. EMEA retail sales were down 24% in Q4 and 11% for the year, while Asia Pacific fell 15% for the year.

Harley-Davidson Motor Company (HDMC) shipped 124,477 motorcycles in 2025, a 16% decline from the prior year. Fourth-quarter shipments were down 4%.

Notably for dealers, global dealer inventory of new motorcycles ended the year down 17% versus the end of Q4 2024, reflecting the company’s push to better match wholesale shipments with retail demand.

HDMC posted a full-year operating loss of $29 million, compared to operating income of $278 million in 2024. Gross margin declined 3.8 percentage points in 2025, pressured by lower volumes, incentive spend and tariffs.

Tariff impact and product strategy

Reuters reported that new tariffs cost Harley-Davidson $22 million in the fourth quarter and $67 million for the full year 2025. The company manufactures most of its core products domestically and sources roughly 75% of components from U.S. suppliers, but imported components — including semiconductors — remain a cost factor.

Executives said they plan to sharpen the product lineup and adjust its e-commerce strategy under Starrs’ leadership. The company is leaning into higher-margin Touring and Custom models while preparing to introduce a smaller, lower-priced “Sprint” model in 2026 aimed at attracting entry-level riders.

Additional details of the company’s broader strategic plan are expected in May during its first-quarter earnings call.

HDFS and capital actions

Harley-Davidson Financial Services (HDFS) played a significant role in the company’s 2025 financial picture. HDFS operating income reached a record $490 million for the year, nearly doubling 2024 results, aided by a strategic partnership transaction with KKR and PIMCO that shifted the business toward a more capital-light model.

The transaction facilitated a $1 billion dividend from HDFS to Harley-Davidson, Inc. in Q4.

For the full year, Harley returned $434 million to shareholders through $347 million in discretionary share repurchases and $86 million in dividends. The company generated $569 million in operating cash flow and ended the year with $3.1 billion in cash and cash equivalents.

LiveWire performance

LiveWire shipped 653 electric motorcycles in 2025, up from 612 units in 2024, but still far from optimum sales levels. The EV division posted a full-year operating loss of $75 million, an improvement from a $110 million loss the prior year.

2026 outlook

For 2026, Harley-Davidson projects:

• Global motorcycle retail sales of 130,000 to 135,000 units
• Wholesale shipments of 130,000 to 135,000 units
• HDMC operating income ranging from a $40 million loss to a $10 million profit
• HDFS operating income of $45 million to $60 million
• LiveWire operating loss of $70 million to $80 million

The company cautioned that these figures may be impacted by the new strategic plan expected to be announced in May.

For dealers, the message is clear: 2026 will be about recalibration — tighter inventories, disciplined wholesale, margin protection and renewed focus on core segments — as Harley-Davidson works to regain momentum in a still-challenging retail environment.