Harley-Davidson, the renowned motorcycle giant, announced better-than-expected fourth-quarter earnings, which pleasantly surprised Wall Street. However, despite the positive financial results, the company’s stock experienced a decline. Additionally, the guidance provided for 2024 has fallen short of expectations.
For the quarter, Harley reported earnings per share of 18 cents from sales totaling $1.1 billion. This surpassed the projected figures of 4 cents and $900 million, respectively, according to FactSet.
While the financial performance exceeded expectations, the future outlook for 2024 disappointed investors. Harley anticipates an operating profit between $675 million and $800 million for that year. The wide range includes projections for motorcycles, financial services, and LiveWire, Harley’s electric motorcycle business. The midpoint of this range, around $740 million, compares unfavorably to Wall Street’s estimate of $783 million.
In 2023, Harley reported an operating profit of just under $780 million, a decrease from the $909 million reported in 2022.
The news of disappointing guidance led to a 2.3% drop in Harley shares during premarket trading, with the stock reaching $33.75. In contrast, S&P 500 and Nasdaq Composite futures experienced a slight decline of about 0.2%. Over the past 12 months, Harley stock has already seen a downturn of approximately 30%.
LiveWire stock remained unchanged during early trading, maintaining a value of $10.68 per share.
CEO Jochen Zeitz shared his thoughts on the performance and future plans of the company. He stated, “In the third year of our Hardwire strategy, we have made progress in key elements of our strategic plan.” The five-year Hardwire plan, introduced in 2021, aims to enhance profitability by focusing on Harley’s core segments of Touring, large Cruiser, and Trike bikes, while also attracting new customers.
Zeitz expressed excitement about the early reception of their new Model Year launch, which represents the most significant product development for the touring platform in over a decade. He believed this would redefine the Harley-Davidson Grand American Touring experience, set the stage for retail sales growth in 2024, and create a strong foundation for the years to come.
To gain further insights into the company’s outlook for 2024, management will host a conference call at 9 a.m. Eastern time. Analysts and investors eagerly anticipate more details during this call.