Harley Davidson shares surge after Q3 earnings beat despite weak motorcycle sales

Harley-Davidson Inc. reported third-quarter results that surpassed Wall Street expectations, though the figures revealed underlying challenges in its core motorcycle business.

The Milwaukee-based motorcycle maker posted earnings per share (EPS) of $3.10 on revenue of $1.3 billion, well above analyst forecasts for EPS of $1.53 on $1 billion in sales.

A year earlier, Harley reported EPS of 91 cents on $1.2 billion in revenue.

The company attributed its earnings beat largely to the performance of its financial arm, Harley-Davidson Financial Services (HDFS).

The unit, which offers loans, insurance, and other financing services for Harley buyers, delivered an operating profit of $439 million for the quarter, an increase from $77 million a year ago.

Harley said the jump was “driven by the impact of the HDFS transaction,” referring to a July deal involving KKR and Pacific Investment Management Co. (PIMCO) that monetized part of the unit.

“Our Q3 results demonstrate the positive impact of the Harley-Davidson Financial Services transaction and reinforce the strategic value HDFS brings to Harley-Davidson’s overall business model,” said CEO Artie Starrs in the company’s news release.

Harley-Davidson shares surged 1.99% in premarket trading on Tuesday to $27.67.

Declining motorcycle sales highlight ongoing challenges

While the financial services business lifted overall results, Harley’s core motorcycle segment showed continued weakness.

Operating income from the motorcycle business slipped to $54 million, down $1 million year-over-year.

Retail sales of Harley motorcycles dropped 6% globally in the quarter, with a 5% decline in the key North American market.

Revenue from the motorcycle and related products division came in at $1.34 billion, slightly below analysts’ expectations of $1.39 billion.

The company acknowledged that softer consumer demand continues to pressure motorcycle sales.

“While retail sales remain challenged, I’m truly energized by what I’ve experienced across the company, in dealerships, and with the broader rider community,” said Starrs, who officially took over as CEO in October.

“While there is a lot of work ahead of us, our success begins with our dealers—when they thrive, Harley-Davidson thrives.”

Leadership transition and strategic outlook

Starrs’ appointment as chief executive follows a turbulent year for Harley-Davidson, which included a proxy battle with an activist investor and the withdrawal of its 2025 earnings guidance in May.

The company had earlier projected flat to 5% lower revenue for the year and an operating income margin of 7% to 8%.

Starrs succeeded Jochen Zeitz, who led Harley through a period of restructuring and cost-cutting efforts.

Harley’s stock has struggled over the past several years, falling roughly 20% in the past five years amid declining sales and changing consumer preferences.

The company reported $4.9 billion in sales in 2022, the highest in recent years, but analysts expect 2025 revenue to decline to around $3.7 billion.

For Starrs, boosting motorcycle sales and stabilizing Harley’s share price remain key priorities.

While the company’s financial arm provided a strong boost to third-quarter earnings, sustained growth will likely depend on whether Harley-Davidson can reignite demand for its iconic motorcycles in a cooling global market.

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