Harley-Davidson Inc. (NYSE:HOG) shares rose 2.2% on Tuesday after the motorcycle maker reported third-quarter earnings well above analyst forecasts, fueled largely by the transformation of its financial services division.
The Milwaukee-based company posted adjusted earnings of $3.10 per share, far exceeding the consensus estimate of $1.58, while revenue surged 17% year-over-year to $1.34 billion, beating expectations of $1.01 billion.
The standout performance stemmed from the completion of the Harley-Davidson Financial Services (HDFS) transaction with KKR and PIMCO, which shifted the business toward a capital-light, lower-risk model.
“Our Q3 results demonstrate the positive impact of the HDFS transaction and reinforce the strategic value HDFS brings to Harley-Davidson’s overall business model,” said Artie Starrs, President and CEO. “While retail sales remain challenged, I’m truly energized by what I’ve experienced across the Company.”
Despite the earnings beat, global retail motorcycle sales fell 6% from the same period last year, pressured by weak consumer confidence and high interest rates. Sales in North America declined 5%, while international sales slipped 9%.
The Harley-Davidson Motor Company (HDMC) segment posted revenue growth of 23%, supported by a 33% increase in global shipments compared to a year earlier. However, the HDMC operating income margin narrowed to 5.0%, down from 6.3% in Q3 2024.
CFO Jonathan Root noted that the HDFS deal is projected to unlock between $1.2 billion and $1.25 billion in discretionary cash by the end of the first quarter of 2026. As part of its capital return strategy, Harley-Davidson announced a $200 million accelerated share repurchase program with Goldman Sachs, contributing to its broader $1 billion buyback plan set to be completed by 2026.
The company said it would maintain its cautious stance on full-year guidance as it continues to assess global tariff developments and macroeconomic headwinds.