Harley-Davidson Raises 2026 Guidance as North American Retail Sales Rise

Harley-Davidson Inc. raised its 2026 guidance for its motorcycle and financial-services businesses after North American retail sales increased for a fourth consecutive quarter and lower shipments reduced dealer inventory. The improved outlook came despite sharp declines in consolidated revenue and earnings, reflecting lower motorcycle wholesale volumes and the transition of Harley-Davidson Financial Services to a capital-light model.

The Milwaukee-based motorcycle maker now expects both global motorcycle retail sales and wholesale shipments of 135,500 to 139,000 units in 2026, up from its previous range of 133,500 to 138,500. It raised expected Harley-Davidson Motor Company operating income to $25 million to $55 million from $10 million to $50 million, while the HDFS operating-income range increased to $60 million to $70 million from $55 million to $70 million.

Harley-Davidson also reduced its planned capital investment to between $140 million and $165 million, compared with the prior range of $175 million to $200 million. LiveWire’s operating-loss guidance was withdrawn by LiveWire.

Retail growth contrasts with lower shipments

Worldwide Harley-Davidson motorcycle retail sales increased 5% year over year to 35,833 units in the third quarter. North American sales rose 9% to 25,603 motorcycles, marking the region’s fourth consecutive quarter of year-over-year growth. U.S. market share in the total cruiser category reached 66%, up 14 percentage points from a year earlier.

The company attributed its North American progress in part to the Super Glide and Deadwood launches, which management said exceeded expectations. Harley-Davidson also said launches of its Sprint and Sportster models remained on track. The Sprint 440 is expected to carry a U.S. price of $5,999.

Performance outside North America was mixed. Retail sales fell 5% in Europe, the Middle East and Africa and 7% in Latin America, while Asia-Pacific sales increased 1%. For the first nine months of 2026, worldwide retail sales rose 4% to 111,807 units, led by an 8% increase in North America.

Wholesale motorcycle shipments declined 8% to 33,616 units during the quarter. Touring shipments fell 18% and adventure touring shipments decreased 20%, partly offset by growth of 8% in cruisers and 22% in sport and lightweight motorcycles.

Retail sales outpaced shipments, reducing global dealer inventory of new motorcycles by 26% from a year earlier and by 6% from the second quarter. Harley-Davidson said the inventory reductions were intended to support dealer profitability and long-term dealer health.

Motorcycle revenue falls, but quarterly margins strengthen

Revenue at Harley-Davidson Motor Company, or HDMC, declined 10% to $964 million. Motorcycle revenue fell 11% to $734 million, while parts and accessories revenue decreased 9% to $153 million. Apparel and licensing revenue was down 3% at $60 million.

HDMC operating income fell 18% to $44 million, producing an operating margin of 4.6%, compared with 5% a year earlier. The result included $14 million of restructuring expenses related to strategic changes.

Gross margin increased 173 basis points to 28.1%, supported by manufacturing and other factors and foreign exchange, partly offset by product mix, net pricing and raw-material costs. Adjusted EBITDA was unchanged at $94 million, while the non-GAAP adjusted EBITDA margin rose 102 basis points to 9.7% as the stronger gross margin and operating-expense discipline offset lower revenue.

At the consolidated Harley-Davidson Inc. level, third-quarter revenue declined 19% to $1.08 billion and operating income dropped 92% to $37 million. Net income attributable to the company was $43 million, and diluted earnings per share fell 87% to $0.40. The prior-year period included results associated with the HDFS transaction with KKR and PIMCO, affecting year-over-year comparability.

HDFS operates under capital-light model

HDFS revenue fell 58% to $111 million, primarily because retail finance receivable balances declined following the sale of loan assets in the prior year. Operating income was $11 million, down 98%, with an operating margin of 9.7%. The year-earlier result included transaction-related effects, including a substantial credit-loss provision benefit.

Total retail loan originations increased 4% from the prior-year quarter. The annualized managed retail credit-loss ratio was 3%, compared with 3.2% a year earlier and 3.1% in the comparable 2024 period. Managed finance receivables, including owned and off-balance-sheet loans serviced by HDFS, totaled $6.4 billion.

LiveWire segment revenue rose 41% to $7.9 million as combined unit sales of electric motorcycles and STACYC products increased 20%. Its operating loss narrowed by $400,000 to $17.8 million, primarily because of improved gross margin.

Tariff exposure and other risks remain

Harley-Davidson now estimates the gross cost of new or increased tariffs at $105 million to $120 million for 2026, compared with its previous estimate of $75 million to $90 million. The company incurred about $94 million of gross tariff expense through the first nine months, versus $45 million in the prior-year period. After mitigation, the full-year net impact is expected to be about $65 million to $80 million.

Management described the trade-policy environment as highly uncertain, citing frequent rule changes, legal challenges and court reversals. The company said its predominantly U.S.-based manufacturing and sourcing footprint limits, but does not eliminate, tariff exposure.

Other risks identified in the presentation include changing consumer demand, supply-chain disruption, credit performance at HDFS, dealer financial capacity, product-launch execution and LiveWire’s ability to secure sufficient outside funding. LiveWire has disclosed that conditions raise substantial doubt about its ability to continue as a going concern.

Harley-Davidson ended September with $2.08 billion in cash and equivalents, up from $1.90 billion at the end of the second quarter. Year-to-date free cash flow declined to $212 million from $315 million, reflecting lower operating cash flow, partly offset by a 37% reduction in capital expenditures. The company returned $110 million to shareholders during the quarter through $91 million of discretionary share repurchases and $19 million of cash dividends.