Harley-Davidson (NYSE:HOG) reported higher third-quarter global motorcycle retail sales and raised portions of its 2026 outlook, citing improved North American demand, tighter dealer inventories and early results from its “Back to the Bricks” strategy.
Global retail sales of new motorcycles rose 5% year over year in the third quarter to approximately 35,800 units. North American retail increased 9% to more than 25,000 motorcycles, while retail sales outside North America declined 3% to just over 10,000 units.
Chief Executive Officer Artie Starrs said the company’s domestic performance reflected demand for its product launches, dealer engagement and marketing support. “The market responds to desirable, authentic Harley-Davidson motorcycles supported by a sharper go-to-market approach,” Starrs said.
North American sales and dealer inventory
Chief Financial and Commercial Officer Jonathan Root said North American retail sales accelerated from 3% growth in the second quarter. Demand was led by the company’s Trike and Softail product families, helping Harley-Davidson reach 37% share of the U.S. 601cc-and-above market, up 3 percentage points from the prior year.
The company continued to reduce dealer inventory, with global inventory down 26% from a year earlier and 6% sequentially. Inventory in North America also declined 26% year over year. At the end of the quarter, 91% of North American dealer inventory consisted of current model-year 2026 motorcycles, compared with 87% at the end of the second quarter.
Wholesale shipments declined 8% from the prior year to 33,600 units, below retail sales growth. Management said the approach was intended to improve dealer profitability and maintain inventory discipline. Starrs said North American dealer profitability was tracking ahead of the company’s plan to double it in 2026, though performance varies by dealer and region.
During the call, management said it expects some dealer inventory growth as the product portfolio expands, including the forthcoming Sprint model. Root said the company expects to maintain a disciplined inventory approach while ensuring dealers have sufficient coverage across a broader product range.
International performance and product launches
International results remained mixed. Retail sales in Europe, the Middle East and Africa declined 5%, though that represented an improvement from the second quarter. Asia-Pacific retail rose 1%, led by 15% growth in Australia and New Zealand. Latin American retail sales fell 7%.
Management described Europe as a continuing challenge, particularly in Germany and France, which Root identified as the only two of the company’s six European submarkets facing declines. Harley-Davidson’s European market share rose to 4% from 3% in the previous quarter, while management said markets including Belgium, Eastern Europe, Spain, Portugal, Italy, the U.K. and Ireland delivered growth.
Starrs said Europe has yet to materially benefit from the company’s recent portfolio changes. He pointed to the planned international launch of the Harley-Davidson Sprint, which began shipping and is expected to reach certain international markets before year-end, followed by broader availability in the first half of 2027. The Sportster 883 is also expected to launch in the first half of 2027.
Management said the smaller-displacement models are important to Europe, where the prior Sportster represented 30% to 40% of the sales mix at some dealers. Starrs said the Sprint and Sportster are expected to attract newer riders as well as experienced riders seeking a different riding use case.
The company also highlighted the second-quarter Super Glide launch and third-quarter Deadwood launch. Starrs said the models have generated strong sell-through, elevated MSRP realization and market-share gains, particularly in U.S. Softail and Cruiser categories. He added that the motorcycles filled price-point gaps in Harley-Davidson’s portfolio and offered customization opportunities.
Revenue, margins and tariffs
Harley-Davidson Motor Company revenue declined 10% to $964 million as wholesale motorcycle deliveries fell. Motorcycle revenue was $734 million, while parts and accessories revenue totaled $153 million and apparel and licensing revenue was $60 million.
HDMC gross margin improved to 28.1% from 26.4% a year earlier. Favorable manufacturing and other costs, including tariff and supplier recoveries, as well as foreign exchange effects, were partly offset by product mix, net pricing and raw-material costs.
HDMC operating income was $44 million, or a 4.6% margin, compared with $54 million, or a 5.0% margin, in the prior-year period. The quarter included $14 million in restructuring expense. Excluding restructuring, HDMC operating income would have been $58 million and the operating margin would have been 6.0%, according to the company.
Harley-Davidson raised its estimate for 2026 gross tariff-related costs to approximately $105 million to $120 million, from a prior range of $75 million to $90 million. Root said higher costs primarily reflected supplier reciprocal charges, but recoveries increased by a similar amount, resulting in virtually no change to the expected 2026 operating-income impact from tariffs.
Financial services, capital returns and outlook
Harley-Davidson Financial Services revenue fell 58% to $111 million, reflecting lower interest income after the sale of loan assets as part of the company’s capital-light strategy. HDFS operating income was $11 million, compared with a prior-year period that benefited from a $301 million release of credit-loss allowances tied to receivables classified as held for sale.
Retail loan originations increased 4% to $786 million, while the annualized retail credit-loss ratio on managed loans improved to 3.0% from 3.2% a year earlier. The company ended the quarter with $2.1 billion in cash and equivalents and repurchased 3.4 million shares for approximately $91 million.
For full-year 2026, Harley-Davidson raised its outlook for global motorcycle retail sales and wholesale shipments to 135,500 to 139,000 units, from prior ranges of 133,500 to 138,500 units. It increased expected HDMC operating income to $25 million to $55 million, from $10 million to $50 million, and raised its HDFS operating-income outlook to $60 million to $70 million.
The company lowered expected capital investment to $140 million to $165 million from $175 million to $200 million. Starrs reiterated Harley-Davidson’s target of $150 million in fixed-cost savings and $350 million in HDMC EBITDA in 2027.
LiveWire withdrew its guidance and disclosed substantial doubt about its ability to continue as a going concern. Starrs said Harley-Davidson does not intend to fund LiveWire’s operating losses going forward.
About Harley-Davidson (NYSE:HOG)
Harley-Davidson, Inc is a Milwaukee-based company that designs, manufactures and sells heavyweight motorcycles. Its product portfolio includes touring, cruiser, standard and adventure-touring motorcycles sold under the Harley-Davidson brand, as well as electric motorcycles offered through its LiveWire business.
The company also provides motorcycle parts, accessories, apparel and related merchandise. Through Harley-Davidson Financial Services, it offers financing and insurance products to motorcycle dealers and retail customers in supported markets.
