Harley-Davidson, Inc. (NYSE: HOG) on Tuesday reported a net loss for the fourth quarter of 2025, as the company faced headwinds from lower global shipments and significant tariff-related costs. The motorcycle manufacturer delivered a diluted loss per share of $2.44 for the quarter, compared to a profit in the prior-year period, amid a 10% decline in motorcycle segment revenue. Despite the quarterly loss, the company met its full-year earnings expectations and saw a reduction in global dealer inventory levels.
Fourth Quarter and Full-Year Financial Results
The company’s consolidated revenue for the fourth quarter fell 28% year-over-year to $496 million. This decline was driven primarily by a sharp drop in revenue from the Harley-Davidson Financial Services (HDFS) segment, which fell 59% following a strategic shift toward a capital-light business model.
For the full year 2025, Harley-Davidson reported:
Net Income: $339 million, with a diluted earnings per share (EPS) of $2.78.
Consolidated Revenue: $4.47 billion, a 14% decrease compared to 2024.
Operating Income: $387 million, down 7% from the previous year.
Capital Return: The company returned $434 million to shareholders through $347 million in share repurchases and $86 million in dividends.
In the Harley-Davidson Motor Company (HDMC) segment, full-year operating margin fell to negative 0.8%. The decline was largely attributed to lower shipment volumes and approximately $67 million in costs associated with new or increased tariffs.
Operational Highlights and Segment Performance
Retail performance showed regional divergence in the final quarter. While global retail sales were down 1%, North American sales rose 5%, supported by growth in the U.S. touring and cruiser categories. Conversely, sales in the EMEA region dropped 24%.
The HDFS segment underwent a major transformation in 2025, closing a strategic partnership with KKR and PIMCO. This transaction included the sale of approximately $6 billion in retail finance receivables, facilitating a $1 billion dividend to the parent company. The shift is intended to reduce capital requirements and HDFS debt, which fell from $6.1 billion in mid-2025 to $2.7 billion by year-end.
LiveWire, the company’s electric vehicle segment, reported a 9% increase in fourth-quarter revenue to $11 million. Although the segment remains unprofitable, its full-year operating loss narrowed by 32% to $75 million as the company focused on cost reduction.
2026 Business Outlook and Strategy
Harley-Davidson provided a conservative outlook for 2026, anticipating global motorcycle retail sales and wholesale shipments to range between 130,000 and 135,000 units.
Management indicated that financial performance in the coming year remains subject to the implementation of a new strategic plan, which is expected to be unveiled in May 2026. The company also expects tariff-related costs to persist, with 2026 estimates ranging between $75 million and $105 million.
| 2026 Guidance Metric | Forecast Range |
| HDMC Operating Income/(Loss) | ($40 million) to $10 million |
| HDFS Operating Income | $45 million to $60 million |
| LiveWire Operating Loss | ($70 million) to ($80 million) |
| Capital Investment | $175 million to $200 million |
Industry and Macro Context
The heavy-weight motorcycle industry continues to navigate a complex macroeconomic environment characterized by fluctuating interest rates and shifting trade policies. Harley-Davidson’s management highlighted their “U.S.-centric” manufacturing and sourcing approach as a key factor in managing these risks, noting that approximately 75% of U.S. production costs are sourced from domestic facilities.
“H-D is grateful to the U.S. Administration and U.S. Congress for continuing to listen to input from the Harley-Davidson organization,” the company stated in its earnings presentation regarding the ongoing trade environment.
As the company transitions toward its 2026 strategy, investors remain focused on the successful execution of the HDFS capital-light model and the stabilization of margins in the core motorcycle business amid persistent global trade uncertainties.
Reasons to Pass on HOG
- Return to quarterly losses: The company posted a fourth-quarter net loss, reversing a profit in the prior-year period.
- Steep revenue decline: Consolidated fourth-quarter revenue fell 28% year over year, reflecting broad-based weakness.
- Soft motorcycle volumes: Motorcycle segment revenue declined 10%, pointing to lower global shipment levels.
- Tariff cost pressure: Tariff-related expenses weighed on margins in 2025 and are expected to continue into 2026.
- Negative core margins: The Harley-Davidson Motor Company segment reported a full-year operating margin of negative 0.8%.
- Full-year top-line contraction: Consolidated revenue declined 14% in 2025 compared with the prior year.
- Financial services volatility: HDFS revenue fell sharply amid the transition to a capital-light model, increasing near-term earnings uncertainty.
- International demand weakness: A sharp decline in EMEA retail sales offset gains in North America.
- Electric segment losses: LiveWire remains unprofitable despite cost improvements.
- Uncertain 2026 outlook: Guidance includes a wide operating income range, reflecting continued demand, tariff, and execution risks.