Citing lower than expected retail demand, Harley-Davidson lowered its 2024 guidance during the company’s third quarter earnings call on Thursday.
Harley reported a 10% decrease in North American retail sales in the third quarter compared to last year. Global retail sales fell 13% year-over-year in the third quarter.
The motorcycle manufacturer attributes the dip in North American sales to a slowdown in customer traffic as customers “assessed the higher interest rate environment and macro uncertainty.”
“We have worked diligently through the quarter to mitigate the impact of high interest rates, and macroeconomic and political uncertainty, that continue to put pressure on our industry and customers, especially in our core markets,” said Jochen Zeitz, chairman, president and chief executive officer of Harley-Davidson.
The company’s revenue is now projected to be down 14% to 16% compared to 2023. Previously, revenue was projected to be down 5% to 9%.
Retail sales are projected to be down 6% to 8%, which is a change from earlier guidance of flat to up 3%.
The change in guidance follows a summer of criticism for the brand, including a social media campaign led by conservative activist Robbie Starbuck.
Earlier this month, Baird Equity Research downgraded Harley-Davidson stock to neutral, citing “sour feedback” from riders, dealers and shareholders alike.
“Dealers reported weak retail, excess inventory, and caustic sentiment – all of which suggest risk to guidance,” according to the report. “The company was in the news for all the wrong reasons this summer, fueling more frustration among stakeholders.”
The report highlighted dealer concern about excessive inventory and having to mark down products.
Zeitz said Thursday the company remains committed to reducing dealer inventory levels and supporting the overall health of its dealerships. At the end of the third quarter, dealer inventory was down 13% compared to the end of quarter two.
“Understandably, dealer profitability is front of mind,” said Zeitz. “As you’ve seen this week, it’s a tough time for the industry as much as it is for any discretionary business.”
During the company’s annual dealer forum in October, Harley presented plans for supporting the dealership network in 2025. That plan received “very good” feedback, according to Zeitz.
LiveWire, the publicly traded electric motorcycle company spun off from Harley-Davidson, also lowered its guidance Thursday.
For 2024, the company now expects electric motorcycle sales of between 600 and 1,000 units. So far, LiveWire has sold 374 electric motorcycles this year.
LiveWire had originally projected selling between 1,000 and 1,500 units in 2024.
Operating loss guidance of between $115 million to $125 million due to continued product development remains unchanged for LiveWire.
“Our focus is right sizing the business given the market environment,” said Karim Donnez, CEO of LiveWire.
The company has officially completed its consolidation plans and moved into Harley-Davidson’s Juneau Avenue headquarters. LiveWire heads into 2025 with a 30% headcount reduction, according to Donnez.
By the end of the year, the company also plans to introduce a new product line to broaden its market share.
