Harley-Davidson (HOG) 28 Jul 222022 Q2 Earnings call transcript

Thank you for standing by, and welcome to the Harley-Davidson 2022 Second Quarter Investor and Analyst Conference Call. Please be advised that today's conference is being recorded. I would now like to hand the conference over to Shawn Collins. Thank you. Please go ahead.

you. Thank everyone. morning, Good Collins of Shawn Harley-Davidson. Relations the is Investor Director at This to Call. Earnings QX Welcome XXXX our

You the at investor.harleydavidson.com. can the on access slides supporting call today's Internet

call. comments noted materially the any different. subject risks include, filings that could Our with matters SEC. actual latest Those forward-looking obligation we earnings others, information risks and have cause be disclaims the in our to that are to results among include will in Harley-Davidson this to update statements release

this CEO, Gina are me Goetter. CFO, Joining Zeitz; and morning Jochen

addition, O’Sullivan, In me will for the Jochen. Chief over it let that, join Commercial Officer, Edel Q&A. turn to With

our and environment. beyond our Forex part on our Hardwire is progress you, improved planning and our brand, Thank believe to the time for mind on, our where future. supply the as the ambitions. in to lifestyle the our opportunities and growth, few to now we At the accelerate that Hardwire as priorities, inflationary II, it's morning, a desirable working. motorcycle uncertainty, deliver despite upon ambition the a performance. building strategy months are you business business thank plan, are our brand chain in since increased culture while we transformation transforming motorcycle hometown the Investor for of of leading future plans I ambition engine we Milwaukee, Investor history to the and in and pressure Stage for Day where are world, our on macro many and We talked acceleration company at joining for Shawn. last expect Day, about the with most significant building current we're acceleration how we today. you we been making Good us and announced XXX-year be what in And We're an the tuning It's Hardwire the into and saw and the Hardwire headed, issues, everyone, Harley-Davidson all of elevate our

and some temporarily our an related was Before vehicle experienced strategic suspension decision comment X more shipments our the close to with of and regulatory production the abundance that we X we briefly facilities Tier out by quarter. for to I brake suspend I delivery like provided compliance caution took provide The QX, detail to of on shipments the hoses in taken of would issue on to and our of Tier suppliers. production initiatives

we of up work action. the production effect We remainder the be lost the for ramped continue to production, We've we'll this able knock-on year. make throughout the through and believe to of that up

therefore, As explain are, Gina changing year. our in we will not full the more for guidance detail,

of the some Now highlights the look of I'd to at like quarter.

profitable commitment made our of profit part the we strategically I the of at business. Pillar by As core our to we growth investing for in is opportunity driven to most growth, are believe the This Touring, the categories where segments invest within into Aligned investment capture stronghold growth. can and we our Hardwire, categories. we core

leadership, invest to potential five to next in Trike. where we categories reinvigorate million $XXX expect We grow reimagine see reinvent, over years and in to innovation key our and Touring, the the Cruiser namely

quality. of of in be Enthusiast we models. of an across annually, our motorcycle collection all on edition wants we design launched are paint, celebrate featuring selection the community. available motorcycles limited launched offering With ongoing community special performance these June, our that and elevated stories unique The core special Enthusiast within created the Harley-Davidson to backgrounds, interest a riders will quantities in Harley-Davidson of know design, curated that new Each we series segments, premium collection Within enthusiast these. and is delivering

launch this models our a debut that launches Adventure And on in it after and Touring of focus both this WLA and our color continue great service as Pan-America incremental to strategy, homage showcasing used riders proportion know on is younger. our section, example our in customers. our collection higher X growth in talent Rev new-to-the-brand for artistic the customers especially that Enthusiast world our selective the skews incredible ensuring with category our of as Adventure with a our the we our showcase work of utilizing with a Enthusiast inspired Nightster, long-term uniquely factory market collections builders Sports segments, new canvas for Max from complements created seeing of we riders. in all-new strong designed expansion motorcycling Sportster to playing drab an Hardwire this was a launch Ultra presence Harley-Davidson time company both and Sport their garage for and riders recognizing Having in brand. with new paint push to we our wanted and of the this to edition Delivering product to on year, With chapter Harley-Davidson platform. Glide a on ever new model Nightster a was of paying the limited design existing collection to of at paint launch. in we history icons of brand, sport our expression to 'XX, make addition April, Instrument existing to last This Harley-Davidson creativity for Sportster around bike first inspiration Building created their this the Harley-Davidson addition from Pillar and our and mind, of redefinition. history G.I., focus unrivaled to presented the is role objective and successful graphics. theme the campaign, is special an put delivering bike the important new will to Nightster. Sports personalization. of G.I. point the completed of the which to a individual an entry with both strategy. and and taking We're Harley-Davidson. part of in or buy With expanding attract For and theirs, collection, a XX-year sport, trends, XXXX Tri II an riders to The their to Expression, capabilities, celebrate story legacy community features and Capitalized Touring performance the heritage we desire in a a the olive while started profitable the

had personalization you a chance hadn't really be a encourage look. launch I'd take video, can you to If experienced. demonstrates It see to level of that the the

to minutes. with addition XXX LiveWire exceptional, was portfolio, to models. out order is platform, Max to to built the launch LiveWire. and of a first launch company. the modularity Mar, SX serialized as new and to focus feature selling new to both we Harley-Davidson continue tap at The electric, we Arro Investor addition Hardwire into Del Mar reservation the an strategy Del also SX bike addition reviewed the and the the ahead, XX of Leading to in explore Looking In Rev May our for new XXX another The III the units plan in Day, deposits launch the featured Pillar using architecture. for reception segments additional our

that of which LiveWire expect the effective. quarterly of SEC approve And all As will motorcycle electric accounting, AEA-Bridges part to week declared September U.S., go now publicly the of and registration becoming quarter. public we the statement to shareholder this S-X company the journey part its XXth. process, yesterday, that in expect our And September we Due now will start as of I'll meeting to transaction LiveWire first of traded LiveWire over fiscal the Gina. be on will the both hand fourth Harley-Davidson's XXth, fiscal hold the

Thank you, Jochen.

year-over-year quarter operating attributed Second modest decline, to production the income revenue two-week results largely a reflect suspension. unexpected and

and and to quarter margin HDMC of from raw material we cost operating to as on moderation as despite operate That the in able cost We our supplier begun and this categories inflation our second we we the focused prices in see we to and And headwind year. volatility. of expected, expect profitable the within half were our said, operating the stay to environment see continue grow broad an income structure. to continue have moderate, most volume, high continue

segment at income units year. were motorcycle in of $X.X the of across results was extent was revenue revenue revenue. of $XXX total strong HDMC result to was Looking and XX% services year. X% a and up growth compared X% the within financial billion apparel. more consolidated year-over-year, million wholesale global quarter, off X% higher portfolio last was down licensing revenue operating at our of X% down a closely last Total Financial as lower receivables lesser to pricing and actions than down

suspension. impact X% up was productivity million $XXX as of and the last income operating the cost offset pricing HDMC, For versus year of

HDFS, continues to prior income line steady. reserve declined rate X% year normalize the $XX remains loss loss of and in operating rate with the For expectations million versus credit as

items, $X.XX lower as effective noted from $X.XX shares earnings well increase in Second as share quarter rate GAAP already income tax to fewer last other outstanding. by year, to and factors with lower driven compares due including the per the favorability pension of below-the-line expense,

sales consolidated new was low at $XXX to Total year. year-to-date last to down new down retail motorcycles than on production of $X.XX and QX the share year. Early in the Turning retail key and week. operating were earnings heading was was market, XX% were compared of impacted inventory X,XXX total U.S. of Global In of QX last $X.XX inventory results to at per units. was down is and XX% year, QX, inventory last negatively Overall were and XX,XXX QX in QX revenue to the producing retail XX% average by by exacerbated billion ended $X last retail GAAP results. XX% year-to-date flat per motorcycles million down quarter of lows suspension. historical compares quarter. further income versus inventory we into less year. the Worldwide motorcycles

across producing are are levels We now network. rate the to that and working inventory weekly above output

year is is X days. less on throughout and QX average, a strong the to the new showroom X% MSRP, desirability in of QX for the U.S., the minus transaction threshold within see sitting XX pricing came motorcycles both above to we which XXXX due than for specifically, plus points. percentage used model motorcycle prices in or floor U.S. continue within dynamics as We motorcycle in did over in dealer new and XXXX, On

we Finally, within to and unit largest Touring our shares share U.S. hold the Large categories of profitable most driven despite loss and market, continue our by commanding in availability, Cruiser.

revenue, and on total QX a in flat year-to-date was revenue down HDMC basis. at QX X% Looking

X by driven surcharges global key incentives Focusing XX MSRP from in on select negative volume, increases, markets. points in points pricing with came of drivers impact and price from pricing quarter, the of the coupled growth

both parts throughout the apparel X businesses, mix accessories from from quarter. across the within realization addition, And on favorable headwind the are the across pricing In price with and and foreign unit as continued we of FX. growth of relatively the mix strong dollar well exchange negative delivered motorcycles apparel X finally, impact points to the SKU as and points year-to-date the as Drivers revenue positive from impact strengthen consistent shortfall of offsetting business.

Pricing inflation. Focusing of gross mix margin flat margins, the XX.X% cost to as unit and favorable able on well suspension were higher QX in as with cost the year. the deleverage headwinds associated production was versus offset prior

from quarter, QX, the we In logistics. the deceleration a year impact tariffs, inflation chain an inflation which total, half. in from primarily supply is in result which the EU normalization unfavorable The XX% provided X% tailwind. additional in was of is margin back down to across QX in and last Additionally, comp X% began incremental

prior lower year. XX.X%. provision The much did credit by remaining year as volatile million than on are in as While margin higher a year, from basis the experienced The XXX our reliance QX approximate Financial as still operating for services past lower largely compared manage volumes. prudently income expense shipping. pricing continue improved to we losses and in segment normalize. in last million, higher XX% was was The QX as as noted we've operating we ago, as by a with reduce improvement logistics costs decline $X driven expedited $XX losses point the not we to driven is well quarterly factors operating down QX actual commensurate to spend year

volume. QX last origination X% retail Looking on HDFS-based used originations year business, up motorcycle in were the strong versus at

higher. $X.X XXXX New in billion, line in QX of with receivables retail points up Total basis X.X% In lower-than-expected were X.X% QX, ratio in a sales. retail motorcycle HDFS' credit origination XX or volume is down annualized loss last X.XX% year. compares QX was finance to which of ratio from

credit stimulus see date included and to performance loan we continue beyond extensions. move COVID-related the move payments towards federal We which due normalized as levels the benefits,

unfavorable of X%, from for HDFS $XXX with related which we is receivables. cash higher million Total in June outflows prior addition, financial of The at end is cash the credit in changes QX. Harley-Davidson, the operating comparable well at $XXX the the operating $X.X cash wholesale ended retail a at year issuance as net was decrease in to is driven debt year. which by this QX end period cash cash losses finance Inc. the capital securitized working two up of cash to $XXX to flat quarters, and quarter. equivalents billion, In higher million compared year. down Through following as million the increase of first flow allowance is the flow, in The Wrapping delivered last in previous was which results.

continued X.X second back million During in quarter. back the QX, quarter, bought bought and the we approximately shares. shares through we X have million to shares Cumulatively, repurchase

growth wholesale to X% and As year revenue today It part the forecast units know said we HDMC to our business. of and outlook, look rest where recoup lost as our we the revenue includes to we expect suspension. semiconductor of of continue of we what This of impacting reaffirming terms production impact XXXX, XX%. we that the incorporates the we full are the growth as earlier, expectation challenges supplier in the also Jochen

positively offset to cost as pricing our headwinds the impacted revenue the global actions to across be We work chain. expect we supply continue to by

margin XX%. supply XXXX the X pricing suspension to continue the impact EU in expect of believe from operating over the the offset We tariffs anticipated chain. contributes HDMC than of income of to We the expected XX% more positive realized inflation margin additional point will Also, across growth. cost

of in capability time, This in to investments and XXXX expect believe a development within we likely and to for our lower continue income XX%. XXXX. to million remain outlook LiveWire. support strategy. from the invest lastly, XX% are not filing in to HDFS the to committed of our the we million we to XXXX continue Embedded Form this is operating $XXX decline as credit the enhancement product hardware to expect of We decline largely result by guidance we $XXX behind losses SEC. releases S-X allowance is favorable itself with repeat At that And capital

back capital as best includes move of execute the capital balance XXXX to our will every and dividends aggregate, growth assumption beyond is will the the operator in in will I'll for rule includes this to move which updated million we to is also time. the It to at Finally, mentioned fund cost Hardwire remain share previously, financial $X improve costs the take allocation, supply have initiatives, for as an the and to penny euro, that of we the chain look but priorities repurchases. your of inflationary, the is this peak $X.XX. expenditures guidance point, that materials year. assumes forecast half which FX discretionary guidance This half worth This at includes pay logistics XXXX. we realized the continue At be A the difference levels continue we of In through on thumb back the questions. to about revenue. it turn that rough back rate

of first go Craig ahead. [Operator Kennison from with will Instructions] Our the Please question come line Baird.

impact the get do do you sales? how lost customer retail. sales back you production and on moving to retail It sure Are quantify And suspension then are you with that something those versus able to maybe will had to else? the the on the

on period strong the a -- it's were market, new period the higher. new the that market in able into we there. being and bikes there to actual quantify in that overall the in is X.X% new and our up the in the believe when difficult product but the particular, that that deliver, market being deliver used no couldn't It's well and the bikes but is out model used the Craig. market, in with slow the -- just out sales, were demand up pretty retail demand dealers, of even lost Gina because in There high the this bikes strong, being and was there dealers. actually ahead pricing you, that indicators XX entry no especially dynamics to products, are of used being few indication that -- are used motorcycle the good there, certainly floor, Thank product we of the The an price in which extraordinarily a including we confirm days that with MSRP mentioned dealer's some -- already in

So didn't big towards there shift used obviously retail. was And had a -- that time. up that in show in the business

terms start In confident feel seen picking shutdown, that so our of to mean, year. supply-related that rest the suspension hence, I compensating our we some volume guidance to able is all confidence, and of up, We the are our due of what is shortfalls the production since -- the that for the had that that we've confirmed right we we've now.

there confident time. don't we chain, happening no this foresee assuming, in point which at other about is we pretty the So obviously, feel supply that extraordinary that, in

few Craig, kind this of is Gina. just I'll Jochen's numbers commentary. a add to

was before units output. So X,XXX per we our suspension, around week the were that running

X, it, production. XX,XXX weeks, lost roughly, would to down we say of call being units X.X units So that XX,XXX was

forecast what retail, production. we dealer through rough the retail. was of you a of predict we but the Jochen's terms in gives kind or of of that ballpark customer, with lost just which inventory kind a product moving gives of To that you quantity Given speed from through don't our the point,

unit are now. in we rate, half, that confident over feel back X,XXX we how producing of the run terms In that

So critical recoup work as get of and this shipments we above producing output that kind QX of window, the kind rate. to are we into

us is being that gives in guidance. confirm what confidence our so And able to

question Bank Our ahead. will America. come next go with Ohmes the line of Please from Robby of

are the on Maybe for starved a The so follow-up units dealers -- while. just a -- kind Craig's question. of been have of

So in a dealers types back broader shipments feedback into of a a been could speak it if were from to kind the slowdowns, didn't half, slowdowns my were there discretionary there where, spending versus any But lot analysts we separately, ending they'd how also shift recently slowdown maybe, but has get that. and other I of you for get is can those happy versus regions. us And the in U.S.? how a is, I be seeing then differences with of shortfall? riding shipment lot sharp production question of of season domestic is any categories? think regions managed international the outlook international -- of any And know on some sort color you to in more

thank for Robby, question. the you Yes.

constant if and numbers can saw used our product seeing about if of seeing we our confirm new actually taken an July, through they are think as the were terms at loan in end, actually in positive since about of overall the accelerating together. we are in resumed pickup terms dealerships, is you new July suspension. In retail, retail is we after dealers, then this of our which especially what we products And to a as now month, into nice the and flow which a which look applications, available became that performance that in soon we

later But good hits system time especially are the some to little the in to go indications it new is because example, we product of weeks So whereas the couple took happening as the moving The retailers. the product first for was a through are out. month, month. bit overall, to there product the seeing use the sell-through the dealers, of in, as get good strong

takes As they are a whereas on on because obviously, in times first, those America, for a truck. spikes a lead ship get are lot the And it those North longer international a markets, longer. getting little

the slower suspension longer take And from pace. a a than at been a work very a Thailand the did U.S. way that internationally, up recovery system. But we've its little start through the recovery, perspective, a market. but U.S. little production seeing slower So strong will to and bit

XQ op And about Gina. for that be XQ margin that thinking just there really should mid-single-digit anything quickly we us you back half, HDMC the about? sort for remind can Is of versus

I quarter, ready the get operating would the our fourth the one, next up three new Good for for remember, question. we to of up product as product year. expense ticks that fourth finish the and model always launches development in compared for say kind quarter previous

and of for there's positives, always keep as there went those uptick be about the through us really So started you because the tailwinds; the impact I tariffs, in that and spend was as well. higher. will two raw accelerate, But were other is one XXXX; high, those is an we QX that in a QX second mind, the then our -- when guess, incremental think when inflation was all in see way QX to benefit the material to

we'll so kind the this of we comping peak of those be as inflation half to year. levels back that get of And

Yes, Robby, point. additional just one

than full markets Obviously, is mentioned riding season You riding starting are later in swing, their that have and September. there still season. riding season

will get to replenish year. that in manner not be will our that So of if in a dealerships products the positive next staffed about some we the think positive retail, will of if start inventory even it

levels probably start than I of don't be positive. like we to inventory quantities have the manufacturing before, but to would foresee the So healthier we are the us we to be, get that which to want we would year

will bikes overall those of in all don't retail, if abundance even not there certainly the bikes be network. an So

with Brett of question ahead. next go KeyBanc. from Andress will line come Please Your the

inventory to if it retail, right, built there pretty actually was but my international weak. on looks I'm comments Going internationally, math doing you back still retail your some like

just inventory that? drag of an parse demand impact, trying impact? to So a that less the was Or there was through of more

the and was -- the the that it's bikes board was demand dealerships but in strong not concern. Overall Definitely, demand available pretty much across a impact.

this is Edel. And Yes.

think to continues as in indicate question those would it in I that for online it they was Certainly, America, by international, a picture appetite of supply. explained add region. come varies be and back Just the as North to Jochen to motorcycles dynamics that really there

European growth, you despite challenges in of those APAC, international I at in same and we the which backlog quarter broadly some on notwithstanding that availability of pleased think example, is very look bit those as the in the certainly of a terms motorcycle markets, COVID China, for wholesales. performance we're of some shutdowns like, the very which of a of and had impacts, created a in the the important terms as market retail believe factors with despite Ukraine availability, the things we EMEA as are significant. conflict been challenges other that the euro with suffered that other Obviously, have has had certainly mentioned, the to an and to reasons to ongoing some in production as impact. lead very FX through us be have reactivate well Jochen several supply. of time to is able, It and impact an will is for also have the continue flow the one where rate it longest

certainly, is that different a it So domestic than market. slightly our for was it for QX, picture

we So have up its overall, the APAC the hopefully as own the opens in year half the geography dynamics strength China with a ongoing expect little bit again. market, particularly that will stronger. But of back

unhealthy there. levels that. XXXX, on just we final Remember QX, to year, very in really last in for QX, Brett, international, point saw inventories that one get And

figured some height than thing the -- year in there's element the we -- that of crates all of growth this differently that we we're shipping just logistics. the out not kind did So of of is last

go come Your of from Altobello line the next with question James. will ahead. Joseph Please Raymond

from couple guess me. questions I of a

trade your mentioned less evidence curtailed second in lower consumer, an production half? the down shutdown. And increase softness maybe seeing then First, either core after or attachment expensive models, are back of second, some those P&L smaller, you the rates you first. expenses come costs operating maybe That's maybe in the among delinquencies? towards Do payment you for QX any in

two for questions. the Thanks

enough we there. I be need additional not was stimulus should stimuli create mean, didn't expenses operating the through to out because coming not -- back. there demand marketing So product

we of than these we've will the half So year. we additionally saved that need to essentially the don't spend that funds back believe in

be because So was little elaborate the do attach there to Gina I'll lower positive cost our among were a bit P&L no throughout lower, consumers. P&L see that more. your there We year. core bikes but on should from to. let that attachment not a perspective softening But was a

So P&L that per se, the you of enough bikes reflection accordingly. a not was could accessorize but market new not in that

shutdown be in terms look credit at tier of -- the you fact the If -- we that slight in say applicants, could could apps, we slight decline the QX, there sub-prime number you might the due that in a also be a well had the to of of had but manufacturing. potential very

to we So can't attribute that at all a decline in demand.

levels the -- economy good just jumping read terms used give overall, product availability very a in signals a have on indications consumer mentioned very the inventory difficult. low consumer reasonably and of made we're the hard really the heading. and next confident. and positive. strong now, I've the the to show bikes of more will that are delivering new is because to But months it's So simply But where is clean right the as is to back retail fact we're consumer certainly that couple But up

this Joe, Gina. is

below both like delinquency started those kind we been underneath and delinquencies we was at in both loss rates average we're those or going compare rates the of look at four-year say, to we had it, rate we that of and normalize, rate as standpoint a rate entered like so from the saying to, to even particular, and in consistent and taking rolling When normalize. as into a how 'XX what with a out loss still XXXX, So historical delinquency rates. QX, loss look 'XX we've

just not of play So standpoint. customer yet we're the payment from a kind in through seeing it side

that operating the -- I the of that we regions Jochen these within we just was marketing primarily. but kind not gen. didn't products, P&L corporate on going at were also lead On our have we markets our center very come agree only marketing spend these -- expense, that to within not with level given that and direct should weren't into It the back and

come next line Fred with Your of Please Wightman Research. from question ahead. Wolfe the will go

I margin if half the rationalize could back of Motor justify or was guidance. hoping sort Company operating you just

have I the the margin you're come output at you looks end operating understand of like you sales low higher But You sort guys running step-up mid-single-digit it than a in range. in of half. contribution. at are in expecting that first were the to the guidance that in

that the bridge is maybe not. the softer there, from outlook cost margin sales there'd but sort performance? what fixed some assume be I higher leverage of would So with

Yes. Gina. margins. half, back This see we our the last typically, year Yes, our back half we back play think absolutely when you're would the some going from in through. to half, flat run about relatively leverage Remember, benefit is

of year. this So through plays it's kind zero as margin that deleverage

have half And operating Our that levels be relatively we to have then standpoint, because with inflation, deleverage continuing of lower an going we back peak stay year. margin of of we're from seen. what the last kind positive of we line is because saw coming that expense off still to inflation, just in

the that QX we big probably from of into look moving But change you back the of the the half are drive things those the biggest is year-over-year. that had So difference. year fact shipments that single when kind

digit provided last mid-to-high you're you looks just guys now, single digits. more to meant I mid-single I guess the expecting It had but quarter. was outlook quarter, relative last I like that that think

the outlook? why lower So

than mean we'll shifting. in up really to with volume -- that. this our I I hasn't follow you material don't been half have a back other there change production on

Please line Markets. question go ahead. with Johnson BMO next Your of the come Capital will Gerrick from

I may. if two, have I

recently a standard option and You Glide King, on to an ABS price Glide Road Street as basic dropped and Road opposed models feature.

you strategy? talk So can about that

This is again. Edel,

that So a but challenges some it ABS. not to in of actually price is relates decrease, particularly a have configuration is the motorcycle, the given of as supply the actually had, change we

some accordingly. sort also what then So profitable to are in around the have to most order particularly our and and price create continue made of we to around our ABS build choice bikes, options features, less demand highest

taken pricing continue touring, transact families. significant category of in have to in we it above to particularly across QX to MSRP In past this our when fact, we are the all comes year -- and

sure price given occur as this accommodations, So customers those we to category. by the when decreases making that to challenges the on actual is opposed chain and are driven fair any our changes supply more

goes And the order warranty work or indirectly? FTC have second, directly could impact regarding of kind if that what through, both Gina, financial

financial minimal be impact. There'd

Morningstar. The the final Jaime ahead. question of will come line Katz Please with from go

financing And then or of HDFS, couple had not just than with primarily about consumers you are of seeing cash I you are any on financing percentage whether guys same loans? whether more the guys loans a follow-ups purchasing rather past? planned? the in you we changed? the guys about the on I piggybacking additionally, think Or is have has And should if half of promotional that there year that cadence some that, to guess back over

Jaime, is Gina. this

and the happened So that year. promo part I'll balance the happen we second no, start no are has is short, very to given there's inventory limited with have the just -- In that sitting, of planned where positions of first. question

it of again, As are overall, of obviously, loan bit we and But between little at kind really number and you a down. where material broader not split or new, macro used it's are financing, look the been seeing available. if uptick relatively two, levels what about prime really is to in and the Total hard then is you you We're originations if see applications given of within When of the flat. of just historically in because hasn't tiers, look of difference squint seeing change. business. it to have kind subprime, is between sitting, is split where loan consistent, look factors we of we've a terms because And of driven been what when we're inventory any the a a relatively the relatively happening bit that discern at we're inventory flat. just to

three and even right we July, applications up. now, So through through through of would our say seen we I have total QX weeks -- loan July,

are provided we've year. last up of been where kind versus actually loans total Our

So we're continuing as inventory trends move availability. the the the in right see to direction

to back the in to clarifying come be financial a the used just just may question not the and settlement settlement, our effectively concerning on was I warranty settlement. language It law. if FTC clear, And previous was a just that

clear, to no with the settlement be Just FTC. financial

time. concludes this you And no there Thank This today's questions call. further are for at joining. conference all

may You disconnect. now