Harley-Davidson Delivers First Quarter Financial Results

First Quarter 2024 Highlights and Results

• Delivered diluted EPS of $1.72
• 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 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 3^rd electric motorcycle, S2 Mulholland, and became market leader in the U.S. for on-road electric motorcycles
• Company updates its full-year 2024 financial outlook

First Quarter 2024 Results

Harley-Davidson, Inc. Consolidated Financial Results

Consolidated revenue in the first quarter was down 3 percent driven by an HDMC revenue decrease of 5 percent, partially offset by HDFS revenue growth of 12 percent.

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. Consolidated operating income margin in the first quarter was 15 percent relative to 21 percent in the first quarter a year ago.

Harley-Davidson Motor Company (HDMC) – Results

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.

Harley-Davidson Retail Motorcycle Sales

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.

Harley-Davidson Financial Services (HDFS) – Results

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 – Results

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. LiveWire’s operating loss of $29 million in the first quarter was the result of continuing to develop new motorcycle models and investing in initiatives to reduce EV systems costs commensurate with the early-stage nature of the business.

Harley-Davidson, Inc. Other Results – First Quarter 2024

• Generated $104 million of cash from operating activities
• Effective tax rate was 20 percent
• Paid cash dividends of $24 million
• Repurchased $98 million of shares (2.5 million shares) on a discretionary basis
• Cash and cash equivalents of $1.5 billion at the end of the quarter

2024 Financial Outlook

For the full year 2024, the 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:

• LiveWire: improved operating loss of $105 to $115 million, from previous guidance of an operating loss of $115 to $125 million