Harley-Davidson Misses Q4 Sales Targets

American motorcycle manufacturer Harley-Davidson (NYSE:HOG) fell short of Wall Street's revenue expectations in Q4 CY2024, with sales dropping 34.7% year-on-year to $688 million. The GAAP loss per share of $0.93 was 41.6% below analyst consensus estimates.

Highlights:

* Revenue: $688 million (3.7% miss vs. $714.6 million estimate)
* EPS (GAAP): -$0.93 (41.6% miss vs. -$0.66 estimate)
* Operating Margin: -28.1% (vs. -2% in Q4 CY2023)
* Free Cash Flow: $77.04 million (improvement from -$20.38 million in Q4 CY2023)
* Motorcycles Sold: 14,000 (15,544 decline year-on-year)
* Market Capitalization: $3.41 billion

Overview:

Founded in 1903, Harley-Davidson designs and manufactures heavyweight motorcycles for highway cruising.

Sales Growth:

Harley-Davidson's sales have stagnated in recent years, with trailing 12-month sales of $5.19 billion barely above levels from five years ago. This falls below industry standards and indicates a lack of business quality.

Recent Performance:

Demand for Harley-Davidson motorcycles has declined, resulting in a 5.1% annual revenue decline over the past two years. Despite this, the company has increased monetization, as evidenced by a lower number of motorcycles sold (14,000 in Q4) but a steeper revenue decline (-34.7%).

Cash Flow:

Harley-Davidson has exhibited consistent cash profitability, with a free cash flow margin averaging 12.8% over the past two years. Free cash flow in Q4 was $77.04 million, but analysts anticipate a decrease in margin to 12% over the next year.

Takeaways:

Harley-Davidson's Q4 results were disappointing, with weaker sales and earnings. The stock declined 4.1% following the release. While the company's long-term prospects remain uncertain, investors should evaluate the full research report before making any investment decisions.