Harley-Davidson (HOG) 2 Feb 232022 Q4 Earnings call transcript

Thank you for standing by, and welcome to the Harley-Davidson’s Fourth Quarter and Year-end 2022 Earnings 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 morning. Good Collins, Shawn of Relations Investor This the Harley-Davidson. at is Director

today’s the Relations the access can call website. slides Investor You Harley-Davidson supporting on the Internet at

As others, actual with results forward-looking be materially latest will to you filings risks the risks, have to our include, noted Those are our among business cause that we subject include could that different. might expect, matters SEC. statements comments in

Gina addition, Goetter are morning Chief Officer, Chief Harley-Davidson’s also Financial in President, Officer, with Joining Morrissey. me this LiveWire is Jochen Executive and us Zeitz; Ryan

join In the Commercial addition, Harley-Davidson’s Officer, Chief portion Edel call. O’Sullivan today’s will for of Q&A

let me that, CEO, to our Jochen Zeitz, With it turn Jochen? over

everyone. Thank you, good Shawn, morning, and

growth, the the finish strategic As strong our we to the of year year. second conclude delivered Harley-Davidson a drive Hardwire, profitable five-year plan to

We total performance with strategic XX.X% driving XXXX an execution and the net increase HDI our income. increase pillars, with a of in revenue our X% in are pleased for

Through plan, Financial parts the the focus business foundational work growth motorcycles, our from view approach to more apparel on prioritizing of have licensing at as and holistic our we Hardwire growth profitable and a a unit accessories, and Harley-Davidson overall of execution costs, changed all and of and the Rewire strategic Services.

to significantly $X.XX our allocation year. HDMC of that despite growth margin contributed expansion efficient a throughout to the excluding strategy and to in had and to margin with leading supply at our of three-point a all This more an challenges LiveWire, increase XX% X.X% the to XX.X% in we XXXX compared to resources, much the EPS face effective

environment the business optimistic we significant remain of about to and transformational As Harley-Davidson journey, you a evolve, is know, and continues XXXX the even potential beyond. the though for Harley-Davidson economic on

strategic our Profit Hardwire and I of the over year. six pillars delivery focus. past them address our will briefly

these segments to offer growing globally, new also Cruiser strengthening the in Trike. the to engagement, are market committed and these to more Touring, while large most our but riders our potential Harley-Davidson. and segments segments Not inspire motorcycle in choose compelling in profitable only are and position we We strongest customers believe

Our each ever Harley-Davidson. Milwaukee-X factory by models, powerful new the revealed XXXX powered most the engine offered XXX, installed lineup eight by

the made introduce align Harley-Davidson, of through motorcycles increase with the also Enthusiast Hardwire, legacy With series the desirability our we of to strategy to a offering. commitment and our drive that Icons and to namely

right product brand, to customers win and especially profile committed the our to garage where excited the Selective anniversary addition to our We’re the to new the objective to the as riders is are XXXth right. existing part of new-to-sport product Harley-Davidson. about we Hardwire, where in within of we expanding we expanding attract collections Aligned redefinition. and the of of our enter future have profit Delivering both riders. as lineup to expansion

point With in sports to entry mind, with both started Nightster. ensuring and Sportster, while Harley-Davidson design April, history was we of this XX-year performance the an and the in our in the to capabilities brand. push Harley-Davidson we wanted a our legacy bike Building new motorcycling of chapter on launch

retail sales XX% our platform. grew globally also RevMax We over touring modular the adventure on by

region. LATAM time since In our EMEA first regions. a the latter across in to and for priorities with emphasize profitable profitable continue particular, we becoming growth Hardwire We markets region and becoming execute stand-alone the

sub-regions growth also attractive encouraged APAC expansion our also delivering early is Japan focus with its levels. other ever highest our now China largest market, results on of at volume and the with We’re profitability by second had

XXXRA. our by and program This expansion replace plan riders. the Academy for Riding for new follow-up of we our the represent returning network Academy critical of This a and will and Over dealers development in also years. as future the Riding XXXX, StreetXXX its new actions program pipeline finalized sunsetted concerted our life the and course we new breathe launch of will the into bikes, bike

an strengthening business May licensing be beyond Lifestyle. a of we long-term. on Analyst on with the growth our in to while our we apparel apparel source deliver then, evolving focus and way offering, this a of motor Since ambition our forward-looking clothes In Investor and creating offering. competency, our best-in-class brand. Meeting, must driver our increased motocross company as been ambitions the including and new a competency set develop We’ve growing which seasonal design, Riding through key our and gear building a and core our products, pillar the been and efficiencies core bikes licensing team out plan, Harley-Davidson executing we’ve and our modernizing driving

Lifestyle to past aesthetic, to taking licensing and people where it also brand the overall we to of consumer, the power apparel Harley-Davidson but unique as leveraging Harley-Davidson evolving bring from and creating especially it non-riders, Lifestyle. new By to opportunity, relates and is able see a think the aficionados. brand, inspiration existing the for we today’s we Harley-Davidson interest the more are unique

in a about exciting in saw the that you we apparel is In solid investments our performance. telling have that are we to the year. XX% point and have developments licensing that performance, and a increase be our lots working are making a we’ll XXXX, on And apparel impact strategy proof this positive of we starting our

X% was and negatively and per bike exceeded challenges business and retails, XXXX impacted our grew results. still parts basis lower in Our XXXX due to on chain a but accessories supply

an overall have to main bikes. And for heart culture in growth Customization, Lifestyle. with Two customers our of Harley-Davidson their a and at us growth. an emphasis growth dealership value. convenience, are and is at expertise customization motor the the the future P&A plan our is part service relationship truly personal allows on and service with elements P&A, integral driving of which

Consulting through by service surrounding grown XX%, revenue participating of Business in and Service XXXX Our launched ahead has program P&A dealers well dealers.

service the service towards journey redesigning steps of with first the the on took an online hd.com. launch also We schedule

motorcycle P&A way function our management integrating with fully lineup. the and lastly, team operate, focus And while motorcycle our offering continue into changed our the to reduce complexity to aligning we’ve we

planning bike also in the build allow inspiration developments for online to improved new configurator integrated customer dealership our to and ease. and We’re

Delivering Integrated customer vision us digital retail while provide in customer physical journey something as capabilities, upon experiences a of that exceed modern growth approach was depends dealer enhanced ambitions the inventory for leveraging of competency our part that and requires and a This enablement past. channels omnichannel to not Harley-Davidson expectations to digital experience. our network. the modernized management, more of

for expanding XXXX in fulfillment and a also the piloted preorder In dealership availability our globally. our and XXXX, of provide inventory XX% a Project in distribution is time, much-needed program management better full saw our network launch swing redesign without Fuel our inventory. allowing of we of is new This America, and signed systems North in And reservations system, enhanced producing already up. program, will which dealerships.

ramp established. we the embarking expand program critical particular we transformation integration and emphasis As on as the our Harley-Davidson to with more marketing up are but experience and effort is that brand on Fuel, on also leads an the footprint Project customer this customer journeys, redefine and

a at this part our employees. last invest impact acclaimed in Juneau quarter, Inclusive internationally to our announced Harley-Davidson will feel the we the which redevelopment hometown specifically to community In our Juneau, Foundation start designers month, plans we partnering of stakeholder and will Studio, and Milwaukee campus. our At hinted with this with serve deliver our Earlier community. the management. local and we a community, Heatherwick to the project Milwaukee people the big

LiveWire And Stock them online at the the reporting EV you plans a of is already. quarter list first AEA-Bridges and with completion the first of seen York combination Corp to if the This Take between LiveWire lead motorcycle business of haven’t New Exchange. independently. LiveWire company Impact the electric. XXXX look in on becoming our

I’m and more the going of to Morrissey, to some about on is through LiveWire’s run over details horizon. to hand what performance about President LiveWire Ryan

our our Good on you, Exchange. and Jochen. XXXX was New Stock to brought the brand listing morning, on a including September milestones, building Thank the many banner is York for LiveWire listing year organization. LiveWire, the of energy our the major completion everyone.

and teams continue with of of operate partners to strategic Our full at benefit KYMCO. the support Harley-Davidson the our

ONE XXX are LiveWire to rave XX and riders introduced XXXX the more We finished earn more The reviews above experience. as over LiveWire planned motorcycles expectations, the delivering to continues units.

move list. we priority of product into investment XXXX, into continues As development our the top to on be

are of teams laser-focused will that technologies, on engineering advancing industry. the platforms Our pioneers and products as the our position further

of on LiveWire and behind Del the original SX half the begin In Mar this to XXXX, plan Based we expect see spring preproduction we of launch the the to introduction our expect of XXXX for platform. European to the of ONE second selling year. builds, in market

XXXX units. we a patterns, seasonality meaningful on impact our planned have this Given to industry originally expect

the model omnichannel reservations to On continue buzz the designed a The by all of has build retail network part the partner launch Del the United the meet working commercial and additions. expectations Mar with areas, the of our front, mature metro of physical in we building XX% in on location exceed of to and States, riders. as top to continued created our XX count grow, the U.S. our in

a to new LiveWire excited by for XXXX, Europe to is led Vice team The President in bring Europe.

Germany, the bring across to picks Netherlands up. and riding to as the retailers UK, their season Switzerland France, readying markets Our the LiveWire are

in will Harley-Davidson asset. SX to The differentiating the on of strategic Pennsylvania and up powertrain that LiveWire same where and have facility continues be capabilities motorcycles readying in Wisconsin chain to then we assembled LiveWire is been supply be support LiveWire The tooling ONE. produce manufacturing manufacturing into a the line powertrains

began to Finally, the market XXXX our spread fund. older the bikes double-digit experience with XX- year-over-year introduction XX-inch electric The of retailing STACYC been a delivered continues the growth. products new for kids. demanding and kids customer brand and has to the strong revenue saw

I’ll performance Gina? and detail. through greater over Goetter Gina the hand now to LiveWire financial to of talk in And Harley-Davidson

everyone. you, morning, good Thank and

Hardwire Jochen a structure updated fiscal HDMC, focused on time As under HDFS executing business strategy. year our are in highlighted, staying delivered and fundamentals our and total marks by we reporting strong first on three-segment the LiveWire. of quarter QX we

apparel HDMC services businesses. houses will and to to our HDFS and continue dealers accessories, services our LiveWire. to insurance other motorcycle and Harley-Davidson customers. provides and branded They motorcycle, our and licensing parts financing, both retail and HDMC provide

continue XX% the to housing will motorcycles balance electric sales STACYC of segment, bikes. in the new LiveWire and the results marketing is design, an Harley-Davidson and consolidate LiveWire in Harley-Davidson their Inc. and owns interest electric

strong quarter the and cost with of impact prior overcame Fourth a out year. resulting productivity significant versus QX operating in suspension in production Pricing points expansion actions increases. of results the operating and revenue margin year-over-year year ultimately closed income three

HDMC our $X.XX a and revenue HDFS, was wholesale higher decline quarter, total of and year, motorcycle the financial shipments results pricing. HDMC increase at increased and Looking driven last the billion HDMC XX%, the continued in revenue was than in segment. and global by strength up within XX% XX% with consolidated in fourth units growth year-over-year LiveWire in

the higher Services Financial revenue company largely distribution XXXX And was due to up network. segment due their was finance to LiveWire the a strong primarily across decline comparison segment period Harley-Davidson as inventory X%, expanded built in receivables.

$X than loss $XX was million Total is million $XX of consolidated year’s HDMC of million income improvement better $XX prior Total at versus year. operating million operating prior losses. a

million launched the product losses higher compared income a in $XX other includes in of the included HDFS fewer year funding. finally, declined LiveWire with As rates resulted as continue XX% model by million of higher units XX% cost year, to loss in reminder, people wholesale and a QX costs line calendar of expectations. XX% operating of step-up and operating beginning a roughly the development with $XX And the to shift the interest normalize quarters. of at to

higher XXXX compared revenue total year, full consolidated of million year was and XX% income to results; $XXX X% of $X.X to was total Turning last higher. operating billion

pricing per As was to offsetting production the last share increase the full productivity year. period and Jochen suspension $X.XX $X.XX impact by This year mentioned, inflation. and earnings same cost was XX% of for the compared driven

in below-the-line had We accretion. contributed which also items, modest favorability to the

ended sales flat largely typically the seasonally than year’s Global dealers. of volume. production retail X% of XXXX impacted quarter, inventory where in the smaller we and less of XX% our suspension retail were new down Total sales QX globally, by replenishment the to timing motorcycles retail the

attributed primarily disrupted the For American suspension during our peak America the QX, season. flow in the which year, dealers decline inventory XX% production North to riding was full of in North the of to

run inventory the region. in APAC single-digit in focused by more as dealer by growth model we China, year growth retail and with the double-digit our network. resulted steady average high into production XX% in inventory out a the basis, driven was grew flows On investments into and a Japan to sequential Steady closed riding in year dynamics relatively the We realized to and we healthier flat inventory for continue and new the XXXX, both quarter set we XX% motorcycles. season. position up used solid start about last Throughout ended are less compared pricing to in XXXX. for strong a

For plus the our MSRP. desirability transaction or new threshold percentage X year, prices minus finished U.S. full within motorcycle of points of

total revenue revenue; XX% QX increased increased X% at HDMC for the year. full Looking and in

the on X from the for driven point of across as and continue of markets. and to most the growth drivers lower of And accessories foreign strengthened of both points we the finally, and impact growth, three X volume growth prioritize the Focusing X profitable points dollar key throughout businesses. models apparel Mix as year. growth contributed unit year, from exchange parts negative our and wholesale came full and from global MSRP increases points pricing by incentives through pricing

HDMC Focusing and than from in pricing the cost year. Stronger XX.X% to the XX.X% chain in gross of for offset on suspension. more inflation impact compared the margin volume production margins, prior and supply annual

metal see in we annual shipping inflation and the quarter, chain in Additionally, point total to X at unexpected expenses, year. tailwind. which continue total, of XX% XXXX, cost point impact than the from Overall, lower X% half margin about in to realized first costs the we supply driven In inflation versus year extent, supply approximately materials down last of back deceleration The by lesser unfavorable inflation in raw with chain declining to expedited lower peak X%, a provided impact half year. logistics, stabilize the last tariffs, year. the and lapped X% be the X and, last which inflation in levels from EU of was largely continued was including markets of the

primarily above. For XX.X%. XX.X% driven noted improved the the was factors margin The to in year, HDMC XXXX improvement from operating by

X.X% operating our combined guidance, operating and referenced million margin HDFS X.X% QX end back was As compared was year-end XXXX QX, retail the QX of last loan ratio was origination. XX% in in a for We originations to X.X% increase year. see annualized bike in income down year, the billion, and bike total HDMC receivables In in higher costs. last did XXXX was income guidance LiveWire is dealer original an borrowing used compared up a X.X% guidance high HDFS’s operating ratio year. of were at retail of Total inventories in to growth which which to was of annual finished The loss our for credit X.X% XX%, in credit strong million, as growth in new of $XX with expectations. year. the versus QX line decline finishing driven losses were provision financing up And prior for down replenished. by behind XX% origination $X.X Total $XXX range.

of prior outstanding higher year. cost funding. Total XXXX average interest a plus million higher was driven by expense debt XX% was versus or The and up $XX increase

initial higher was innovation losses the quarters unit new XXXX, $X bikes. of sales units STACYC and than full quarter models STACYC and driven XXX year. the current at the LiveWire bike annual behind uptick about units in to pricing. was the up product $XX total, of the expectations. retail prior revenue X.X%, ONE balance mix Fourth segment for on growth and finished favorable first a finished The is company our XX% in on XXX revenue which first line addition, of LiveWire In by LiveWire its XX% guidance, environment. three the by by increase million quarter with incorporating a decreased sold year as driven slight year revenue allowance and from million X% was year, two with ahead of macro more for public In outlook credit

the a For motorcycle slated platform for as product associated in the loss Mar the loss of SX with XXXX. its advancement was million electric operating electric $XX its $XX year. year, to investment ready the in second launch development The vehicle company to of to step-up behind the Del of the full compared prior of attributed loss system million and increased

includes Europe planned investment Additionally, the retail in XXXX. network and of the XXXX into in expansion build-out omnichannel

cash financial million in XXXX, down $XXX we by with was Inc. up from delivered flow, in of decrease than as $XXX higher cash Wrapping working results capital related million which changes Harley-Davidson, net operating consolidated billion, The the XXXX, ended XXXX. full was year this driven Total cash and $XXX number as well in was at outflows cash includes to million finance of wholesale lower cash million receivables. $XXX from LiveWire. equivalents $X.X which end

$XXX the line million capital through to XXXX, repurchases. company share over dividends priorities, In in returned our with allocation shareholders and

to growth on business, to forecast X%. The as for pricing outlook X XXXX, of core As growth, growth of we points and we offset to our unit X approximately X% incorporates to X continue more financial inflationary revenue look HDMC a moderated X of of our points we we mix, as expect outlook. focus points profitable X to

expect to to our and in Furthermore, accessories, businesses with top and strategy. line and Hardwire parts we growth the licensing continue apparel line accelerate

HDMC efforts currency XX.X% unit believe volume headwinds. will pricing, and and operating margin supply inflation to offset expected impact of from chain income cost anticipated XX.X%. leverage, expect We We positive productivity within our mix, the

the to increase. HDFS is decline This rate income XX% causing higher largely by interest XX%. to to borrowing We result our operating expect decline environment of a cost

also to expecting losses Given the rates between rise backdrop, and macro for X% and X.XX%. planning XXXX above are loss we are

products. Mar operating and forecast to new loss updated $XXX unit This expecting launch the are X,XXX an the timing For XXX range LiveWire, of in million Del forecast incorporates million. between a $XXX we units income and

in $XXX million, development manufacturing total product core for we and innovation, as capability And of as behind lastly, and step-up by planned investments reduce to to in journey, continue well is invest primarily to automate investments LiveWire. investments product $XXX HDI, as enhancements. our capital driven The for productivity part costs investment we of as million expect

labor chain In compared while expecting as are to years. year. X% smooth more aggregate, stabilize. XXXX, increase previous back logistics of completely to expecting we’re we inflation and the In experiencing XXXX, in of we the upcoming not of than X the terms driver are across And supply volatility costs primary with X over about expect sailing supply chain moderated this efficiency, the less XXXX we in to two in continue costs inflation to and X% points as

as productivity production key we of are of the towards $XXX projects XXXX, with strategy another expecting identified complexity incurred million eliminate Hardwire and incremental to part of efficiency initiatives that and we goal, One since increase our the $XXX XXXX, XXXX. eliminate costs is $XX million and waste. In million delivered approximately driving supply focused to chain in

stabilize to base expect to the also We reduce and continue costs. shipping supplier expedited

XXXX We that improving unit. in profit $X,XXX on initiatives at continue finishing with levels will we of make and productivity, believe to back cost place for to getting historical in with continue per roughly make progress the good to profitability. mix XXXX to bike per the progress we And drive

XXXX XXXX, X.X to dividends fund expenditures allocation, the In paying capital mentioned have of Board discretionary on capital we authorization. look we our includes share and bought initiatives, we shares, remaining back repurchases. As X.X the and priorities million current shares executing which Hardwire million our remain to growth previously,

expected. a as that not that of raised LiveWire the place to expect XXXX. less were Finally, given on and We facility in in spin funds between part facility do than LiveWire loan draw Harley-Davidson we put the

achieving are targets we focused our pleased XXXX our year. upcoming summary, to financial in and this are commitments in on In delivered have very

I’ll back that, with to it Jochen And to wrap up. turn

Gina. you, Thank

of our deliver and to on May the performance. engine in moves improvement tuning the in not in our initiatives can long that also six line spaces on to focusing Hardwire the can early detailed We improved pillars of further strategy, but for bottom in strategy, on we and and making success only win, our our by continue capitalize where performance in business ambition our related core We run. bold top, believe we Hardwire we deliver

see growth capabilities will our and our and that expand long-term We for profitable within invest that continue markets potential, value ultimately our create building to most and initiatives where on are we stakeholders. for we reach focusing us all allow to customer categories experience,

our Harley-Davidson. motorcycle Lastly, an year be a has XXXth year-long XXXX, Harley-Davidson performance. American with design, Since anniversary this XXXX is technology And celebration. important year, pioneered at and we’ll marking

bringing talk year for going milestone anniversary more recent XXXth model with release destination our quarter, commitment be and company, world. We fans, we Harley-Davidson to our XXXX will to unforgettable more to you is you the and customers in the celebrating for people we’ll new an are but community and walk of next see with also of community. want making brand. ultimate this all to culture excited culture the to we’re reaching hope history, riders product hometown, – the of the We but what the about at our about We there. motor a our to make And anniversary,

And now take Thank you. we’ll questions. your

you. Your Baird. with Craig Thank comes Kennison first [Operator question from Instructions]

open. is Your line

pretty Thank now question. looks affluent morning. are if there’s a signals for it’s to demand difficult you what demand across spectrum, out to subprime would seeing trend Good interpret your like, how to the whether I’m right taking consumers macro another suss more from it’s you forecast? curious, or way consumers, you my the

expectations. Yes, are riding we entered haven’t yet. seeing, season is that we season Demand right? segments now, Overall, with demand I it’s signals Jochen where obviously, performing has early, in we as feel have. unfolds, But know demand the We are comfortable that the but will with sits. here. comfortable line can Thank Right feel tell. question. will with time really overall we We inventory the what January our that you say been the for

had seasons to a retail quarters. the positive with we shows the third it second appear and the because slightly quarter we positive growth simply core to Overall, riding mostly year our for when flat and in expect up – our – with

I we question retail anticipation. early year, but And So hope still growth, in demand your positive. expect a answers signals. overall, overall, about flat do and that the are that’s on to quite It’s our positive we

go that, Just to follow Gina. – up positive on a ahead,

Sorry.

I were to going was just about subprime morning. asking applications. some good on how color Craig, you give and prime, you

as loan overall, in, retail a quite Overall application we from a line from early in standpoint, in of still bit across said, days environment, are come frankly, both prime So seeing interest Jochen and performing with January expectations. a still subprime.

loan our to even back in really volume at So application the of half and year strong. continued the month last has stay as

Great. Thank you.

America. Ohmes The next from is question with Bank Robbie of

Your line open. is

Hi, slip different thanks. I’m in just to going a one quick follow-up and question. then

you the Just sort then line expect a track dealer guys follow-up would most is in? for – dealers the some to on And maybe retail dealer-focused first Jochen, you the how your fill what question in about you’re in do focused dealer on for shipments there on XXXX? us of further XXXX? in you initiatives Or just of And could consolidation on network, thinking are kind guys is, update XXXX? still of

Robbie. Sure,

– your retail. about the of terms question In

And would about a year. we Gina expect for the in that given. from unit As a addition X% slight growth guidance that I’ve retail to lift include mentioned, motorcycles the pipeline

small filling the would to guidance equate retail positive So and pipeline X%.

for Edel, it’s talk do this you about network? Gina time. – the both So point a combination want to sorry, at And in

return couple we year are you, in Thank us into Good face A critical stronger initiatives and we inventory as Jochen. position, of the Robbie. a anniversary year. Yes. this morning, for to that

diverse dealers, and across off riders. pace. a proceeding of is one incredibly globe. the is is which is is the and is but upgrade comments we Project The It around a Fuel, more it overdue significant expanded long facilities in outreach that terms investment opportunity program first We This and is our it’s will important. it for believe for his that referenced the it in of at of pay growth our to segments believe Jochen

big one priority us. for that’s So

the in important is are but of one are emphasize initiatives we goes of is and management careful continue emphasize the affordability, profitability. to a over balance to part the we a is There pursuing. distribution initiatives an Obviously, that us, to for as its around in second value continue inventory to much value also to to of how which lot also desirability along of our very for more couple our dealers system terms of an allows some updated restrained that there is consumers and product inventory control the replenishment, story, are driving find and in a time. we will to but us and that of opportunities message important holding terms faster year very, very is out The terms relevant of

Jochen been our the received, Milwaukee. well mentioned but involve has say, the I around activities well extremely not the and that important engagements this would course, is all apparel, for of then dealerships third year. as anniversary consumers that only but that and And as also would highlight It very our early is bikes, indications is activities our is, for headquarters in initiative all also of of the which the

three will I this we So pillars forward be those, big that pushing are think, year.

you. great. Sounds Thank

next is from with Wightman Fred Wolfe question The Research.

is line open. Your

just we does it for you’re model look I as still inventory and look know the sequentially, question. was XXXX. pretty obviously Good guys. versus could year Thanks I well. in that big Hey just that if changeover But that are numbers unpack morning. dealing slides. the like you with dealer the down it built at then hoping you’re

sequential saw just that we sort units and of you of you going forward? think about sort are, can should that unpack where build where how So,

was extremely more low XX,XXX level the XX,XXX XXXX, have than That’s dealer as time. That’s of an we now. which, level. in inventory units the in at the network inventory So,

at If this you of level from look XX% a historic perspective, is that XXXX.

XX%. pre-pandemic, So

better getting we we level. are And healthy finally more have in inventory extremely an still it’s the right Thankfully, So to spot. now. network back a

previous in have help So in inventory overall, us good that I’d terms we a position the healthier of than to we start year. say, riding season and are should

Raymond next Joseph question The James. Altobello is with from

is line Your open.

guide morning, for guys. Hey guidance the first moving your this million. think look XXXX million Good Thanks. I’ll it But of to around of chase. I equates question, cut $XXX here. we lot $XXX parts to EBIT I guess if a at morning. roughly right to There’s

us, if could you clarify great. that that for would be So

coming LiveWire. X,XXX on least estimate at was this secondly about maybe XXXX year gave in us into year, And or of back last December you bikes. The what

You’re about, year. quickly at if of see don’t Thanks. you able willing materialize start? demand to kind looking pivot call or bikes start you it, how how X,XXX slow to business? Why in this And be would that the

Hey, morning. This Joe. is Gina. Good

three So overall EBITDA your different you’re the right question when all in add of zone kind first up on here, guidance the on you segments.

it that to turn I And So, would for I’ll say right. thinking Ryan you’re LiveWire. over generally about

Thanks, Joe. Yes.

front, XXXX the changed and Del question there, from comments, we’ve the majority your the bike. we expected talked opening that change units to come to On in in line expectations as time on the And units LiveWire were on the of Mar. about the the

So second now that the time motorcycle. line, to sales of expecting ramp given up the half we’re the for new in year

the So, accordingly, down we taking industry the brought account. seasonality units into

the So look continues amazing. bike to

getting units. to the is driving in market, on change laser-focused but in that it We’re the what’s the change time line

The Hardiman Citi. with next from James question is

open. is line Your

Hey, good morning.

you the retail how broader compete about you’re motorcycle in hone – think to I that, categories. I don’t those year. positive flat in on you growth for all thinking the said wanted I which So, to the unpack industry, know industry entirely Maybe

segments you’re sort market obviously? and How So then and number? industry up how us retail product Cruisers, in about relative think don’t of thinking what get now how the flat to those based is, on what going seeing about? share, Touring right your to that to maybe pipeline for you’re perform the sort assumptions to market you’re We to but you of know

achieve we industry not just at company, we I’m in as this Look, a what can a the I’m Yes. think – as really XXXX. we at point. brand are at looking looking

our quarter retail, then look order the that a quarters said we at fourth the to So achieve would of growth second in to or flat if earlier, the unpacking with as seasonality, core I or down. third and being flat the first come positive expect you in retail to slightly slightly

unfold. year the how that’s So would

the make absolutely of That we the an But that believe want really in we is – that is – focusing of our here MSRP, segments to grow. sure have our we market in and we’re terms to and said, the can the desirability product, maintained. on desirability opportunity we industry,

the whatever margin. we will overall, But good very protect to our is So now demand, we’ll bring, but early. seeing accordingly adjust what demand are profit it’s

for taken indicative cannot months? be the demand demand as segments any segment an coming So now

is James, Hey Gina. this

to a bit to on little there more color Just flat the provide positive.

deliver in that those production share one I suspension. So as When what are think really are delivered, slides, Also mean you hone U.S. Touring at and QX, the XXXX we we of think in QX, are into in it as we and I within had mind keep categories our categories the when gains. growth did don’t we on we we the Jochen the about we focus said, market. we in you in share much Cruiser, look comping the get

though missed were even the riding up able end, on key really we on shipment So we wholesale back XXXX, to from out standpoint a make in season.

to really you probably next going see muted QX, as you more benefit retail within QX. the our QX, be So QX, think where about overall, year growth is

Makes sense. Thank you.

question David with is MacGregor next The Longbow from Research.

is line Your open.

the free on everyone. give I capital quick haven’t Good guess that cash general model million up mean, in we I explicit for flow. But about on to cash flow. terms terms? thinking I working guidance one you’re coming free $XXX of provided just that what’s contributor XXXX, a as number? you how And should be Yes. achievable morning off noticed in a

Good question. David. is Good morning, This Gina.

similar head say as would levels of into I cash we overall, flow So XXXX.

we we investment the XXXX Obviously, had So in that were there’s nothing LiveWire atypical. making.

We move will as have into XXXX. that we not

overall. and focus move capital on and that eye areas making that inventory into kind sure So of big we’re our next move as mindfully just reacting I’d say one as a is working we year our year. number of down bringing similar standpoint, From the to keeping through levels we that

in year, terms finished we’re we that apparel go As of licensing we of in balance right, out with part P&A fiscal always sheet That as both keep bleed inventory our and products first end finished the the of as – on the building all year. the to them. as year, motorcycles starts end well mind, and along the through

So itself the looks half. end year, bleeds first high even though down the the at of that through it

you. Good. Thank

Johnson Markets. Capital from is next The Gerrick with BMO question

is open. Your line

couple I had a questions. product Hey, good morning. of

the that one [ph], they the Academy. Is that then be And complete got you’ve course? now. something the First, for do populated mentioned Riding to about purchase you available XXX I bike, CVOs on will when know graduates out

kind them strategy just the launches? you CVOs. the CVO or the in of launched about and that you seems talk same behind think explain of the I past, time, all at the a Can rollout like rolling

Yes, Gerrick.

going available not the It’s Riding be Academy. to purchase North XXX in for exclusively is So for America.

launched. have I have we very in to might for very we’re bit that. said product obviously, later still the already overall, longer in But the year, video, be our that few coming we strong and wait CVOs things we’d sleeve. we’ve and what a launched I about As the our we’ve have think for already. has excited reception up very a launch been a If what strong But

Okay.

launch production conscious on no worry these So decision delays basis a to then? to It’s rolling about. a

destabilization We’ve good we It’s back supply from at we able perspective. in deliver that bikes certainly confident not our chain. to Not normal, this but time. today’s point are in seen the feel to a yet

Okay, you. thank

is question Jamie with next Katz from Morningstar. The

Your line open. is

morning. good Hi,

First, clarification. a

looking to profitability. You guys peak want is levels to I get back level mean doesn’t of what profitability of sure historical noted you’re that make to.

mid-teen maybe margins – versus motorcycle high-teen So motorcycle margins? operating operating operating

get was issue in than XXXX in which more EBITDA I And that if pushed your But ability to to with XXXX. XX,XXX you does back have units LiveWire. And on on positive that units? other eventually outlook? I the then to being derail trajectory keep XXXX, initial the the that still Thanks. question does is deliver understand not,

first take part Good morning, the Jamie. of is that. This I’ll Gina.

of you’re say more of So when the right headed historical in of in terms is profitability, it levels the you direction mid-teens.

We are as in getting XX%. to Investor it, laser-focused May Day on that, committed call back of margin that to back of what getting we our to part

we So say when that’s historical, not peak. where

discussion have on long-term near-term on any there. our your in Del Generally, or the priorities. the thoughts on of Jamie, LiveWire, a on Mar don’t question couple our or Hey vision event of our impact strategy XXXX,

We’re partners. position wheel continuing to the into our direction the of strongest continue vehicle and with of see to strategic have long-term the lead the to help markets

our on innovating be systems, expanding the on you to the but today, trajectory product safe if to to focus XXXX EV for long-term focused long-term they say, we’ve right distribution. continuing company, the and continue goals set continue ones. portfolio we’re core the the think and So that we to And in we’re the look at

today’s this further you for conference Thank will at this questions And joining. call. time. There no all conclude are

You now disconnect. may