Harley Davidson just announced its performance and financials for the Third Quarter of 2024, and to put it bluntly, it looks dismal. On virtually every measure that matters, things are going from bad to worse. The one bright spot is the fact that Harley apparel sales are up, amazing considering that fewer and fewer actual motorcyclists will buy a Harley.

The consolidated Financial Statement is as follows, taken directly from Harley-Davidson’s Third Quarter Report released yesterday.

Third Quarter 2024 Results 

Harley-Davidson, Inc. Consolidated Financial Results

Consolidated revenue in the third quarter was down 26 percent, driven primarily by an HDMC revenue decline of 32 percent, and partially offset by an HDFS revenue increase of 10 percent.

Consolidated operating income in the third quarter was $106 million, down 49 percent from prior year period. The result was driven primarily by an HDMC operating income decline of 69 percent, partially offset by an HDFS operating income increase of 29 percent, and a LiveWire operating loss in-line with our expectations. Consolidated operating income margin in the third quarter was 9.2 percent, which compares to 13.5 percent in the third quarter a year ago.

Harley-Davidson Motor Company (HDMC) – Results

Third quarter global motorcycle shipments decreased by 39 percent, as dealers adjust inventory levels for the current retail environment. HDMC revenue was down 32 percent, driven primarily by the significant reduction in wholesale units shipped. Parts & Accessories revenue was down 6 percent due to lower customer traffic than prior year. Apparel revenue was up 13 percent.

Third quarter gross margin was down 1.6 points due to the impacts of lower volumes, negative operating leverage, and less favorable motorcycle mix, partially offset by favorable net pricing, favorable foreign exchange and lower raw material and supply chain management costs. Third quarter operating margin was 6.3 percent, where operating expenses were down 11 percent in the period but offset by the larger decline in revenue at HDMC, resulting in 7.2 points of operating margin decline.

Harley-Davidson Retail Motorcycle Sales 

Global retail motorcycle sales in the third quarter were down 13 percent versus prior year. North American retail performance was down 10 percent, as dealers observed a slowdown in customer traffic in the region, as customers assessed the higher interest rate environment and macro uncertainty. U.S. retail performance was down 1 percent in the nine-month YTD period year-over-year.

International markets have performed weaker than we expected, down 18 percent in the third quarter versus prior year. In EMEA, third quarter retail sales declined by 23 percent, with mixed performance on a country-by-country basis. In APAC, third quarter retail sales declined by 16 percent, with Japan softer than we expected and Australia & New Zealand experiencing growth. Latin America was largely flat. International retail sales were down 12 percent in the nine-month YTD period year-over-year.

The only reason why the results don’t look significantly worse is because, once again, Harley Davidson bought back $350 million dollars worth of its stock.

As for Livewire, HD might as well rename the product Deadwire. Revenue was down -41% with an annual projection of operating loss between $105 million and $115 million for 2024.

If Harley continues at this rate, it won’t be long before the company either shutters its last American plant, moving production all production to India or China, or it goes out of business entirely. A continuously decreasing sales ledger suggests that HD will have to do something in the not-too-distant future, as there can’t be much stock left to buy back, which Harley has been doing so for almost ten years.

The continued shrinking of its customer base, as HD owners age-out and sell their motorcycles at substantively less than a new Harley sells for, means that more and more HD motorcycles are appearing on the market, and very few buyers either are willing to, or can afford a $55,000 US motorcycle, which is what HD is asking for its CVO Roadglide and Street Glide models. This fact continuously dilutes the sales of new HD motorcycles as younger buyers buy used, and over time this will have a significant effect on the resale price of used HD motorcycles overall.

Time is not HD’s friend and it is running out for Harley Davidson. Now, in addition to domestic competition, notably Indian, new foreign motorcycles are being produced that are in the wheelhouse of Harley Davidson, and these are expected to enter the market in 2025. The future of Harley Davidson has to be seriously questioned at his point as investors seek greener pastures for their funds.