Harley-Davidson (NYSE:HOG) raised portions of its 2026 outlook after reporting second-quarter results that management said showed early progress under its “Back to the Bricks” strategic plan, including growth in North American retail motorcycle sales and improved dealer inventory health.
Chief Executive Officer Artie Starrs said 2026 remains a transition year for the company as it works to reset the business, rebuild dealer confidence and improve execution. “We are still early in the work, but the business is moving in the right direction,” Starrs said on the company’s earnings call.
HDMC operating income was $72 million, compared with $61 million a year earlier, and operating margin improved to 6.6% from 5.9%. Root said the quarter included $3 million of restructuring expense tied to the company’s new strategy. Excluding that restructuring expense, HDMC operating income would have been $75 million, with an operating margin of 6.8%.
At the consolidated Harley-Davidson Inc. level, second-quarter revenue declined 6%, driven primarily by a 55% revenue decline at Harley-Davidson Financial Services as the segment transitioned to a capital-light model. Consolidated operating income was $76 million, down from $112 million in the year-ago quarter. Earnings per share were $0.75, compared with $0.88 in the second quarter of 2025.
North American Retail Growth Continues
Root said North American retail sales of new motorcycles rose 3% in the quarter, with approximately 30,000 motorcycles sold. Starrs noted that marked the third consecutive year-over-year quarter of retail growth in North America.
Root said the region benefited from continued strength in redesigned trike models, as well as positive results across the portfolio, particularly sport and adventure touring families. Harley-Davidson reached 32% share of the U.S. 601cc-plus market, according to Root.
Globally, retail sales of new motorcycles rose 1% year over year to approximately 42,500 units. Outside North America, retail sales declined 5% to about 13,000 units. EMEA remained the weakest region, with retail sales down 9% in the second quarter. Root said performance in Europe reflected a subdued economic environment, though touring, sport and trike categories posted positive results. Asia Pacific retail sales were up slightly, while Latin America rose 4%, marking its fourth consecutive quarter of year-over-year growth.
Starrs said Europe remains a challenging market and that Harley-Davidson is making portfolio adjustments. He cited the planned return of the Sportster 883 in 2027 as an example, saying European dealers are “particularly excited” about the model.
Dealer Inventory Health Improves
Management emphasized dealer inventory as a central priority. Root said global dealer inventory at the end of the second quarter was down 17% from a year earlier and down 7% from the end of the first quarter. North American dealer inventory was down 15%, while inventory outside North America was down 24%.
Starrs said more than 85% of dealer inventory was model year 2026 product at quarter end, describing it as the healthiest global dealer inventory position in years. Root said North America also had 85% current model year motorcycles in dealer inventory, compared with less than 75% in the prior-year period.
Starrs said the company expects domestic dealer profitability to double in 2026. In response to an analyst question, he said used Harley-Davidson residual values are “extremely strong” and that improving MSRP realization on new motorcycles is also supporting dealer profitability.
“Today, the vast majority believe it’s either just right or they’re asking for more bikes,” Starrs said of dealer inventory levels, contrasting that with the fourth quarter, when he said nearly every dealer was concerned about having too much inventory.
New Models and Parts Focus Support Strategy
Starrs highlighted recent launches of the Super Glide and Deadwood models, describing them as “blank canvas motorcycles” aligned with the Back to the Bricks strategy. He said Super Glide sell-through has been strong, dealer enthusiasm has been high and MSRP realization is among the strongest the company has seen “in some time.” Deadwood motorcycles were reaching U.S. dealerships at the time of the call, and Starrs said early reactions from motorcycle media and riders on social media had been “overwhelmingly positive.”
The company is also working to rebuild its parts and accessories business. Starrs said Harley-Davidson has appointed a general manager for the business, identified near-term accessory categories and is preparing for a model year 2027 parts and accessories launch alongside its motorcycle launch. He said parts and accessories are tracking ahead of the company’s beginning-of-year plans.
Guidance Raised for HDMC and HDFS
Harley-Davidson raised its 2026 guidance for HDMC retail and wholesale units to a range of 133,500 to 138,500, up from the prior range of 130,000 to 135,000. Root said the company expects retail and wholesale units to maintain a largely one-to-one relationship for the rest of the year because global dealer inventory levels are healthy.
The company now expects HDMC operating income of $10 million to $50 million, compared with prior guidance ranging from positive $10 million to a loss of $40 million. HDFS operating income guidance was raised to $55 million to $70 million, from $45 million to $60 million. LiveWire guidance was unchanged, with an expected operating loss of $70 million to $80 million.
Starrs also reiterated that Harley-Davidson believes it is on track for $150 million of fixed cost savings in 2027 and the HDMC EBITDA target of more than $350 million referenced on the prior call.
Tariffs and HDFS Transition Remain Key Factors
Root said Harley-Davidson continues to expect the cost of new or increased tariffs to be in the range of $75 million to $90 million for 2026, unchanged from the prior outlook. In the second quarter, the company incurred $22 million in tariff expense before recoveries and benefited from tariff recoveries primarily related to IEEPA. Root said Harley-Davidson is not planning for additional meaningful tariff recoveries for the balance of 2026.
Starrs said tariff uncertainty remains an ongoing factor and noted the company’s recent announcement to move Rev Max production for North American motorcycles back to the United States.
At HDFS, second-quarter revenue fell to $117 million due to lower interest income following the sale of loan assets as part of a transaction completed last year. HDFS operating income was $22 million, with an operating margin of 18.5%. Root said annualized retail credit losses on managed loans were 3.0%, compared with 3.3% in the year-ago period, while total retail loan originations rose 10% to $940 million.
Harley-Davidson ended the quarter with $1.9 billion in cash equivalents, up from $1.6 billion a year earlier. Root said the company repurchased 1.3 million shares for $30 million during the second quarter and 7.9 million shares for $158 million during the first half of 2026, adding that returning capital to shareholders remains a top priority.
About Harley-Davidson (NYSE:HOG)
Harley-Davidson, Inc is a renowned American motorcycle manufacturer best known for its heavyweight cruiser and touring bikes. Founded in 1903 in Milwaukee, Wisconsin, the company has built a strong reputation for producing distinctive motorcycles characterized by their signature V-twin engines, chrome finishes and robust frames. Harley-Davidson markets its products globally through a network of franchised dealerships and focuses on delivering an immersive brand experience to its customers, emphasizing lifestyle and community alongside its motorcycles.
In addition to its core motorcycle business, Harley-Davidson offers an extensive range of parts, accessories and apparel under its Genuine Motor Parts & Accessories and MotorClothes lines.
