Harley-Davidson (HOG) 8 Feb 242023 Q4 Earnings call transcript

Thank you for standing by, and welcome to the Harley-Davidson 2023 Fourth Quarter Conference Call. Please be advised that today's conference is being recorded. I would now like to turn the call -- I would now like to turn the call over to Shawn Collins, Mr. Collins. Please go ahead.

you. Thank morning. Good Collins, Shawn of Relations Investor This the Harley-Davidson. at is Director supporting access Relations on can you the website. the Investor Today, Harley-Davidson slides call at the Internet

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

the and of are morning Chief Dana. for Executive the Executive With Jochen Harley-Davidson, Officer, that, joining Officer, part Chief me this Financial first Officer, LiveWire, Colin call Zeitz; also Jonathan Root; Chief

In addition, to Jochen Zeitz. be Chief will joining Harley-Davidson, for us. Jochen? With our call, CEO, me the over portion today's that, Officer, it O'Sullivan, of Commercial Edel let Q&A turn

everyone. you, [indiscernible] and and you our of we emphasize some high concerns, rate by products for strategy, Good our Thank invested key the today's continue the to interest XXXX, priorities call. third has for morning, Impacted in future. in Thank affordability progress year confidence markets Shawn. and In continued core been we made Hardwire the and consumer joining environment

creation. focusing the continue to geographies, categories most our innovation and and have dealers, emphasizing business the for evolving that profitable value to up expect customer We long-term our on with benefits experience and will yield us set

XXX%, since meaningful by our per unit unit profitability XXXX. seen or $X,XXX As of increase per

even purposes, shipment is of with the performance of early versus touring more in note of retail our retailed accounting for schedule an way which new the came shipping that better for XX% the XX force of cleared globally, units. prior we release This QX, at Looking is down Retail in for models. units wholesale XXXX than start new offering expected It for in to than seas needed QX. year. logistics early but we aggressive

contrary, core in over categories, in with market in to to our and leadership our well coming XX% we Through commanding gross market share a together demonstrated by ahead Despite with margin U.S., in the Touring outperform core the have focused perceptions at continued share performance. these continue segments, of over and XX%. all the cruiser strong QX, reaching competitors profit to our taken gain we large position with

Revenue growth, was down X% to year, work we incentive revenue and currency points impacting manage production and a and decline of inclusive as X slightly challenges. pricing dealer leading inventory for our to this, macro navigated spend the Despite benefit yielded top driven line retailers by of mix of combined conditions headwinds.

maintain operating We starting over less motorcycle continue of the margin on in our profitability unit X% with our X.X% versus revenue XX.X% XXXX. to On of focus period. in and 'XX, growth XX,XXX profitability sales income

and it's point of the pricing that function believe decisions from orientation We strategic of and significant Jonathan in clearest our our profitability multiyear core the mix, as mentioned from our This execution that across more But per reaching in current a environment. and proof geographies, a products earlier. unit, mix in later. of XX% And XXXX. average with products XX% on increase up is

briefly year, will last X starting them with our the delivery our Hardwire focus. of profit I strategic pillars selection and address Pillar of

generation year, Softtail street our with of the core categories, mix and are We this continue our Retail setting focus on new Touring our overall CVO, launched With transformational stage Hardwire part CVOs. of year's our to light product, Grand of outpacing we prioritize as growth American this Launch. on for delivering Touring and innovation, also promise of we road in core Last units strike globally performance.

And tapping increase focus with America Bikers the aligned commitment align to we legacy now our our introduce our motorcycles, strategy also Series enthusiast Launching to to Harley-Davidson. continued icons to of our Moto with King offering. increase been awareness the into that of by product on during and we've Racing new performance profit our building efforts the desirability our

Selective X, Pillar Expansion.

continue our We've Motor the example partnership of global markets core, as selective very at reservations expansion and offerings. strategy. venture progress continue a We that models solid small date, been reception to Hero venture part we our select as XX,XXX with to with our with first for pleased the exceptional make displacement innovative geographies over in look of to on matter will participation to

one combustion decision separate will company segment, focus in than X, Harley-Davidson in and continued omnichannel to Lead line customers. to the successful capabilities with experience for LiveWire, segmentation traditional pioneer in the invest Experience. our is both and in X, and synergies. SX post later. brands, transforming on our fuel in, to in as EV while Electric. utilizing with platform execution continue clear through detail focus Hardwire our EV focus proving enhancing in to pre to segment addition Mar, purchase program, the Karim Pillar Customer joint year journey we for More our and Del dedication a the our with With as the customer Pillar mission, our on

key continued evolution drive channel, as our engagement messages by open with suite sales improve and the specifically marketing dealer to we traffic rewards. alignment in-store of Additionally, to our exemplified our and dealership approach, and houses, on dealer

lastly, first we marketplace XXX,XXX execution had the XXX,XXX over the that the And our coming HDX to modernization marketplace, are for on of year. visibility orders membership for pleased months. platform offering are online platform, progress this America. our growing date, used declining just our years X with over Harley-Davidson in members leading by on been the good With the of distribution new around product milestones recommended in system progress new online we for made rejuvenated membership now members We've and with

market. event motorcycle stood the like coming, and successfully closer no the can home do customers bring We existing another as new annual up brand brand to also core to in alike other

one connected like of Touring category of timeless I to American Grand out brand. year. iconic of on borne the Highway Few American and unique year Harley-Davidson, Touring for Harley-Davidson. pursuit are adventure. of of experience heart simply, is would specific was was 'XX, to by mission model products the to our the and the invented new The Put our and outlook comment Turning is as launch

was Back for in XXXX, decision of new quickly the the no Touring. plan. first of most one Hardwire We and there became plan that, our it took change important priorities the and to

over saw excited you As believe share development is in most what January, the well our years. now in comprehensive we launch are in the to Touring XX platform, we product from

system, Grand represent the future Light form for comfortable years technology, design all this up portfolio and powerful, dramatic XXX experience to and American new a the With models visual new Grand core wrapped Road including segment. the advanced will intact infotainment in Milwaukee-Eight a 'XX come. Touring redefine Motorcycle Light more the Street for Touring the models of that are featuring lighter and with American Both of Harley-Davidson Harley-Davidson new

This latest ever we've ever has lineup potential that offered customization the is but in most advanced produced, we've only most the Touring. not also

introduced the CVO, Additionally, for Road custom during and 'XX ST our Road in CVOs year. to first added America or celebrate Streetlight Pan new the CVO Glide XXth complementing Homecoming last we our lineup, to anniversary vehicle CVO the of operations

ever the the and performance performance CVR sophisticated Harley-Davidson, Starting to lightest, with more Glide bagger ST, level. bagger Road fastest next by hot is produced the rod taking

Rider Racing The Low unique we style that Road represents ST, of X with seen the fueled in King ST series. the performance-minded the into high tapping as of performance CVO While our components West Glide value collection drivers, custom combined trend providing with of Baggers a Coast offering.

for include the also model We are Touring. the the and another Touring the CVO expanded we first 'XX touring America the time Pan right getting innovate CVO, ensured highlighting beyond launch that segment, have we Grand to that in American Adventure season. investing at riding network are into family motorcycles for the continue out prepared and in to We've the time

having early, with X traffic network, weeks ago, only collaboration consumers awareness very positive on strong alike activities. still it's we've although seen a from the initial already driving influencers and And reaction and media, launched

for potential of brand. this years lineup excited we as ahead, are we look to about And the the the

environment.That We the impact it macro is of our are and extent growing models predict overall the that have the year, fantastic in on Touring in focused early even industry fully of it environment. positive still the new on to the high in hard and can said, basis these interest the current retails pipes is current

that As such, we're read launch, while the early affect by broader providing to headwinds are our very we usual model new the excited business. our industry of continuing year than outlook given guidance our

believe we customer. we that levels inventory will management our right to close strategy network inventory in the be balance to manage the both look ensure to the we And have that part the of continue cautiously, recognizing as we we will Furthermore, ahead, core for a the and right year are to network.

keep to be and retails based required. that conclude, levels ensure on challenges product and manage as retail will we talk as retail future the balance it we for foundations on have potential, right created Karim To over to hand even you. the wholesale wholesales goal of through deliver combination Livewire. to adjustments we over to and Our in despite a now you. manufacturing Karim, in ambitions the Thank to solid market, company. to our that which believe the And I'll so

Jochen. Thank morning, you, everyone. Good

with Harley sales for increase to from the in versus the Pennsylvania. customers and units both LiveWire. required Wisconsin positive quarter, in-house promises well a as be perception Grab to annual an strong guidance. at operating assembly a We base developed the exciting in branded with products, we both from for pleased XX% supply year happy a platform year in newly new Delma as are production stabilizing are operations that the line report of fourth We FX of and early Davidson all our the delivered With and the ramp-up powertrain the the the after the Considering XXXX in unit media, finished of developed revised XXXX. with loss LiveWire LiveWire

LiveWire products, unit reflected Livewire increase Jonathan. accelerate We over hand you. cost segments, development down without to to And continue our the which now Thank to of path guidance. along continue with and I'll is we Our our drive and bring Stasi spend plan our manage believe riders. XXXX. our new in over products carefully new our the to more profitability, these to increasing at portfolio it options sales entry teams To work cash, to to and more both expand position to into

spend. and XX% decreased detail you, the as good X financial of the QX, we In revenue remain HDMC XXXX of to willbriefly each. on plan on improved XX% to At market touring will pricing conditions. on into mix I QX, mindful said, prioritize the mix and to go quarter due motorcycle and by fourth incentive focus was I XXXX, for presentation, QX of further shipments motorcycle summarize results In and cruiser I where offset morning, dealer where our continued by volumes, Thank in down lower wholesale start motorcycle. we global Page HDMC of in subsequently, and Karim, was Jochen as inventory everyone. core and

revenue will We further Page to cover turn of when details X. we

$X.XX. year Results in impacted the Total the of revenue a the billion wholesale results million quarters consolidated was operating on The lower volumes million, $X which this was of operating LiveWire, by the of the compared the operating than at revenue Fourth loss to spend and grew million consolidated the first quarter. operating compared compares fourth HDI was in with higher At XXXX breakdown was to prior our year-over-year LiveWire, of in fourth to Turning income of in was wholesale QX a HDFS, to million $XX and at revenue million million XX%, lower quarter breakdown loss in the million, $X.X income X from declined which adversely remaining declined quarter. in Total profitable quarter year. At is was line quarter in X%, significantly QX, the earnings XXXX. last $XX fourth year. was down at fewer incentive loss by at consolidated of mentioned, HDMC for by to share income $XX is XXXX XX%. of an a HDMC $XX quarters income of year, operating with HDFS, revenue per expectations. HDI $XX where a units grew by quarter markedly XX% of period. The were and $X quarter basis I as

$X.XX $X.XX billion XX% $X.X Turning compared to revenue consolidated year. results. total was income over year XXXX in full last just Total Full to to operating was in year, while compares and higher lower $XXX earnings than share X% XXXX of XXXX. year million of per last was

were We next retail detail drivers In will QX, down loss North of mentioned purchase a earlier, declined segment talk further by about motorcycles specific section. profit the rate as each In sales XX% on new versus greater by global continued decisions. sales the and discretionary retail impact business of in consumer the X%, America, prior year. QX a interest driven environment high in

covered by In partially last at overall Thailand. in XXXX In Mexico. driven bikes declined by XX%, In XX%, Latin sales driven EMEA, QX of New the This retail Germany. addition, sales in Pacific, Asia in sales. the end from Brazil a and in France Sportster In by impact by have improvement and retail by driven and increased by discontinuation an declined sluggish both growth. weakness growth impacted is continued marked Australia America, EMEA to Zealand, continues QX legacy to quarter. unit on and adversely sales retail Japan XX%, weakness we noncore adverse by economic QX Overall, offset by conditions what strength be macro of and

As availability the improved of XXXX. is manufacturing XXXX get much tight environment operation, to back to exceptionally continues and a the levels compared product more to normalized

approximately and Street end recent As the in season motorcycles, touched on believe 'XX launch was during appropriate inventory year we at models. QX of approach glad in XX% spring 'XX overall new We of dealer position from and our the is of end as model the up inventory XXXX. with an earlier, new QX writing road Glide especially dealer current the

revenue QX and year. the declined in revenue largely decreased QX, full due by HDMC units XX% wholesale to decreased at HDMC Total lower for revenue. X% Looking In shipped.

promoted Looking inventory the model at of from prepared of The support XXXX points closer the the decline facing. key to in volume drivers Street we more. points launch at the and HDMC, Glide we market customers our environment XX of reacted dealer ST for and levels new high-margin and market prudent the existing decreased CVO QX, that conditions, X came are spend selectively given models incentive to came decline conditions as pricing where rate higher current products from year for they supported

the to revenue calendar implement in QX, support. support enhanced which In will a of reduction to in resulted XXXX dealer approximately motorcycles addition, we year into which made model incentives, decision as carryover million year $XX XXXX,

prioritize points we in QX. finally, as this Mix will And contributed models drive point contributed XXXX. our and help performance profitable most expect We foreign exchange markets. We growth retail X X of continue to in

which both year year from points of For X%, full the inventory our across the X full the contributed global pricing and retail incentives money of by the at aforementioned remaining the profitable XXXX, overall where motorcycle wholesale in continue for from key which MSRP through the prioritize price support businesses X increases increases points motorcycle and parts most an came growth, shipments. driven mix, as XXXX by to year of in models decline, came decrease accessories and HDMC we dealer the and revenue markets. volume unit X of net for HDMC to included XXXX declined apparel help and which of calendar actions drivers points decreased increase,

XXX resulted by expense the the above, my And margin points, basis incentive due favorability mix addition margin and to the X XXX manufacturing year. pricing spend, to QX, XX% impacts XX.X% of in of our income negative and margin which earlier the for foreign I material than of factors lower exchange, as covered costs. Operating lower year, points finally, quarter. lowest was in operating more and point the down raw basis typically dollar costs in impact, of comments the gross the volumes, benefit shipment offsetting fell which in gross full behind of quarter of strengthened In

came We we rate continued to X%. in inflation, experience at experienced what and more XXXX. moderate In inflation cost to relative cost between a QX, X% in

and currency. year volumes positive better year basis partially lower margin lower and at manufacturing were supply the points XXXX, the XXX and mix XX.X%, despite and chain were full than for For in costs gross a was foreign year pricing HDMC offset by which came volumes, ago

year for and factors year XX XX.X% the operating operating year. came is due For full compared XXXX, which basis margin XX.X% lower HDMC after the was The small rounding. due higher approximately in largely and to full accounting to in just decrease in from at XXXX, points the margin expenses to in operating mentioned earlier

debt. The $XX and to At Harley-Davidson down XX%, finance income. commercial Services, receivables million and was expense by current by was a XX% Operating year higher higher of and market higher income an rate interest with in Financial improvement versus QX, revenue prior increase funds, as compared increased XX%, was cost to last driven up million, was a Total QX credit lower or by by costs The the costs, interest higher driven year. $XX year. for matured replaced loss a debt trends partially partially $X higher rate provision change credit a income. increased offset borrowing million credit These reserve The provision by in seen operating interest realized the the fourth by earlier dollars. were losses as higher decline of higher increased favorable was result in absolute in offset higher for losses, driven and quarter expenses. interest expense

annualized year the the losses full macroeconomic The QX at loss increase and to retail credit X%, to ratio factors in current levels X.X% XXXX, in of several X.X% and loss related which compares by driven 'XX. HDFS' year through came compare For industry the in These was credit customer full annualized to for environment XXXX. an dynamics. relating

$X.XX loss were reserves down originations allowance X.X% methodology. credit prudently loan flat in retail fiscal year. as prior in remained but XX% year. Total QX at prior receivables XXXX, CECL X% during the versus slightly product both X.X% accordance from including up calculate financing billion with loan commercial were Commercial availability, stronger QX billion, to lending for lending which net the receivables addition, compared losses for from Total up loans receivables, QX, In we X%, by were behind our while quarter end to and Retail up rate was $X.X

$XXX an for in put and the XXXX, guidance for full to $X.X in XXXX, to the the at resulted came year in QX, Cash position financial end funding year-end. Through capital XX% liquidity year at million we from compares strong down HDFS For This year. $X.X XX% of our of which approximately has HDFS XX%, operating income bank to raised relative of the down or of conduit approach both markets liquidity billion very of in HDFS in a position perspective. facilities and billion all XXXX. as a full committed

the due For in of fourth electric million unit in increased in to quarter revenue segment, the $XX million fourth $X Del XXXX million higher to fourth quarter LiveWire sales of from motorcycles. Mar of quarter part $XX the

they As in shipping motorcycle activities planned and advance Kari the in Del on rollout pleased expectations are mentioned, line around driven with operating QX, $XX costs in was LiveWire million EV and development the Mar, SX with with to systems their and XXX units shipped. first of by successful platform, in LiveWire QX QX began loss Denmark.

driven the with decrease to For full due in year. in working year stage in activity which business nature by given operating prior inventory increase operating and XXXX. electric the to at XXXX, in a million flow whole. million up cash the up $XXX financial delivered year compared cash we in guidance, million operating in from a inventory with as $XXX increase an positive of early as XXXX, The was was HDMC, of the $XXX flow, motorcycle capital results, full market Inc. the Harley-Davidson, was Wrapping loss consolidated of line

the LiveWire. billion, includes and number higher was million This $X.X of consolidated cash than $XXX which at at Total XXXX. from end $XXX million equivalents cash cash ended

than outstanding. to capital $XXX in strategy, year we at a This million, combined, During the XX.X XXXX, we years. nearly million our million. last shares years amount the of million represents as the and was XX% of these full repurchased our of greater buybacks of part of bought $XXX in back $XXX shares allocation X value share XXXX, worth stock our This

to X years. cash the demonstrate generated also returning strong These the We to by combined in as dividends Harley-Davidson, both $XXX million as have out have well capital actions the paid over shareholders. Inc, last commitment flow we

XXXX for products. including look that to outlook are to decisions to our As excited rates, new interest our high our XXXX, Jochen recognize customers' we the financial we motorcycle discretionary lineup, purchase complexity about environment, discussed, add we overall but as macro

expect balanced HDMC, and retail At we to appropriately unit X%, which results from units. retail between results a which XXX,XXX on result XXXX. in shipments are to range expect up versus XXX,XXX units retail XXXX, X% an wholesale basis unit move believe we Currently, in wholesale units coming shipments to in down together positioned units. in inventory down XXX,XXX that flat XX% will flat we be be revenue would This wholesale Thus, to to standpoint. X%. and dealers This sold HDMC to XXX,XXX in equates to

We This margin include expect is income to wholesale in XXXX XXX to volumes. drivers the level. basis margins of The of down lower due to negative XX.X% flat XXXX. leverage points HDMC operating operating from XX.X%

currency, be be is which down to pricing be expected as our which is the slightly we will and strategy. which expected slightly fine-tuned mix, surcharge eliminated headwind, to a pricing, favorable Foreign

initial the operating motorcycle. as to new some Street we At in we Glide expect manufacturing of up realign expect year the we factory processes HDFS X%. production flat HDFS, additional Road be of Glide income Lastly, to costs and

our business moderating costs that stabilize with comes We borrowing to the in upon it rate expect began anticipated to Fed environment XXXX as the based action. interest higher

expect the of half half resets, the balance rate the XXXX. portfolios to in and into as We compared portfolio begin we moderate into the XXXX environment macro retail revenue. and the consumers loss more of to second settle driving expect greater also to backdrop, higher existing in as And the line will therefore, expect second rate wholesale we the with and thus retail to come

with in is operating $XXX loss is and more LiveWire forecasting range XXXX the delivering in while At LiveWire, million continue And HDI, $XXX and expect This units million. the investments plan consistent XXX% of in the sales between an forecast between million. unit is guidance XX% $XXX enhancement. to we to same range X,XXX and X,XXX range and development the for lastly, motorcycles. behind This capital million capability to invest we where is to total $XXX product of XXXX,

and remains by costs Our driven our innovation, of in planned as investment as LiveWire. core reduce automate journey well productivity investments to part product focus investments manufacturing for as

that One of our back part of eliminate $XXX million initiatives production XXXX, regionalization. among additional driving strategy on expedited and actions. towards this where deliver towards the reducing incurred million $XXX XXXX, a is productivity approximately logistics In cost and cost XXXX. as goal XXXX goal, incremental on chain consolidation productivity Hardwire identified incremental In since $XX we we is optimization optimization delivered to supplier with focused costs to of costs other the supply network approximately million efficiency, through towards delivered approximately gold. focus $XX we million expected

continuing capital hardware the As growth discretionary includes previously, execute mentioned of we share the remain initiatives, priorities dividends XXXX, fund and the look our which in to at capital profitable to expenditures paying allocation repurchases.

covered XXXX, And to common shares Q&A. in XXXX. nearly we'll with this amount in it did to are In and to as As capital similar a in in shareholders. XXXX, dollar at of point our we up buy we planning returned $XXX time, back XXXX we million open our that, previously,

of line the from comes question first Our Kennison with Baird. Instructions] Craig [Operator

floor to interest a the It's got be for helpful. tough and My dealer. very commentary. high margin a rates. thanks skinny question additional dealer goes That plan sentiment. time was Jonathan, to It's

very in success struggling some cases, that but Fuel that have with flow. dealers is are had ask Project for with cash capital big all You a investment

with partner are them to in wondering with the opportunities So change, and you dealer your might I'm leadership how just with the like ways? there different relationship reimagine

you last year demand The has that as rate a dealers. led been certainly rise Well, to Craig. you, that overall lower to have we for Thank year the affected much profitability. recognize has tough a said, interest

in look had seen. which take we our what's obviously projects that of at the into we we fuel dealers we you actions decline with take we into putting a I launch that mentioned, would that I is dealers. network. That that very already significantly, all helps has launch, the a from that dealer record had media many the in customers improved new say, of our all it model overall sentiment to least that buffer terms But excites product the and the are the to to launch network, has terms consideration is in much 'XX, result decisions that feedback influencers and positive new the and and said, pricing, If of have 'XX, great the at network from quite and led of And in of product. in product had from as profitability come terms early buy year

perfect not certainly So financial facility being into -- we years. sometimes difficulties upgrade. recognizing this, the as are have upgraded sure many or of consideration never time take as trying but that balance been to to we much find making do the here for are a facilities comes right we to that facilities upgraded, XX, even can. Fuse XX And there's

Overall, far. we've so completed XX facilities

completed end by XX% the of about be expect We to 'XX.

alone. in in of dealerships full completion America process We have over all XXX from North build agreement to across levels

place could good And in that program recognize you XX say overall, please this will for over So success. years. be

this happen. So to don't all expect we of

dealers they some are want So first and come to line. ready and go certainly in

Some might program. that, would XX-year have a to it's into consideration tougher and that and do take we a time

be improving. sentiment profitability overall, should has we expect And dealer the So improved.

has the And for the I writing ready helped. season. launch preparing certainly model we now and think all are year

of of line from America. Bank Our Alex Perry the with comes next question

in and in headwinds mix we the expect XQ ask Sportsters. you impacting this sales expect be should the promo to 'XX. about shipments saw wanted trike you you on And be lower thinking that to margins? gross how heavier Do just I long how in and year motorcycle on in do those touring

products of to pricing that we've laid in important to dealers action carryover the year inventory action challenged to Well, we've model terms about sure in particular have interest Jonathan we just so that new we've action it's have products our is in accordingly. recognize out taken adjusted environment our and industry priced are product consumer our in the why make discretionary in we the to and premium that Touring, what has our which according rates, in been taken new good to taken far. with presentation. high his launch, And competitively that our we feel the have due

So in the at adjust environment. flexible obviously, time, this is to we pricing we be the whatever right point in feel will required but current

towards In and priorities, new to terms of know, clear to the mix, a strike we launch, was the that. model the new think, to as more product products cruise the or is Stage touring part have of of indication emphasized hardware shift strategy X year our you as I high-value from

we still until in ship the We had didn't the sports decent is 'XX. amount after Sports, end 'XX. sports in of network any

anniversary touring now. price market So pretty exciting that the of out Nightstar network those an the themselves the we way that feel with our have and moving models But competitively the we our all product pricing such point entry in we quickly. and new right should have offering up to products as are priced

quickly move in have I We still But it's network early the to sure go. the see season. make the XXs to want through We'll as do said, network, that, which we things can as how to actions and emphasized we've necessary. possible taken and in we've according to the as inventory the if continue because is want will dealer why reduce so that

Our of Wightman Fred Wolfe next Research. line the is with question from

of in pretty current you about mix But feel point talk can dealer year? that touring you're model understand good of for up follow at see the like just I wanted on just the refresh shape versus you I inventory and that year. how this meaningful the in in noncurrent products commentary. the face to the of unwinding more you sort this

as support you in is Yes, our largely accounting even the in you Retail. the by believe the some conversations. of general. referenced question. major our say, inventory in in network we your as Rushmore Exactly release StreetLight for Touring considerations arrival product previous driven believe, appropriate QX, of we note, And launch up is in in for have and is level and the early that in also that that, ramped that delays XXXX, important we the to our of which product you we some accounting inventory for have, logistics the as hank platform QX of we

Obviously, reach there complete dealer a as ramp of period we we fill. is until up, time

and which appropriately as to is is ramp for So also of time us And exactly, as you support up XX%, inventory those create this has our and levels working majority as the and of financial the 'XX. retail more directed 'XX have 'XX season role in the those mentioned, through to the the the at then inventory used early priority network support, where Jonathan been the more we us of of come we of move more as twenty-four. note, online, we has for down part

point to think interesting will price the that customers 'XX features prefer an that technology. older and of entry serve also of We as some the

a And And as it a have role We the to X:X So through 'XX, think we move want in going also they of general, play forward. course, balance, roughly us, watching Touring and dealership. that more keep are we for levels to those our as inventory. in work we of in balance costs as category an we floorplan overall, American come such XXXX of XXXX for the a ensuring through Grand is online. we important accounting keep

Our from with the James. Altobello Raymond comes of next line Joe question

HDMC margin biggest mention operating of you're did I and XXXX. expecting several you is assume takes in negative puts leverage driver the the So that.

much much pricing. year which year? in that this margins of I that you a the included is how quantify is how could on And you're expecting So well, guess support drag dealer this as greater if is

Joe. Thanks, Sure.

in we think at a were XXXX, as certainly drag overall what take perspective. put of I look that a talked bit margin we So an on what programs for we've as saw a from we saw place about, we

through we script the details and out that. obviously, the of that called So

really we hit $XX about benefits as through kind XXXX million have us the that clearing So that work retail XXXX. in of we

those And bikes so the drive the revenue marketplace some in with forward to the XXXX, kind the actions marketplace we made delivering we we in up moving look in retail associated have in we obviously, matched that to with them sure as XXXX. that of of

you at that touched this think look, little you other a take I too, But is as think that The as our Adel look worth take piece I is noting, on bit. a a what's take and nicely, think Adel -- a too, are inventory retail model in at I covered perspective, where today. look from we year of a mix as that the terms in you dealer

network shipping XXs as more then obviously, we XXs are in we're the today, go. and So in

of very much just did that you in That's started And follow-up see maybe terms helpful, a elasticity how spending? of Jonathan. you discounts, on and once promotions retail the in to amount increase

positive and promotions at that the November improvement of the in the increase I if in particular, December, October, in from say, fourth a to amount retail while had quarter through month would is, -- we correlated we sequential December, of and partly Well, market. we look the nice you saw

achieve market and mix these model that see and a in which will be have because mix in to January possible going are we new a -- year everyone between the as reaction is the key we carryover launch of to end so a not as buy quickly, new promotions the towards the new. products, to So try we accomplish when there's good already in with and right putting

or used buy product. will Some carryover

the is fulfill to schedule any an we So stock said, as from hope I those possible, well we customers. request our quickly think and have carryovers aggressive dealer year move, model shipping to for network we 'XX 'XX. as And as through certainly

which about industry in as customers early -- a improvement, here. relatively what in new our the model but the very is why earlier, a as at started which to to offer for for guidance us, and whole, point modest shipped a being significant be. we've our a than excited 'XXs, new the this year with much seen we So in I have just to we've the And time, since new testament our broader mentioned the would nice usually product year not is it is, the

the of line Our is from next question Citigroup. James with Hardiman

So Jonathan sort retail. wholesale really a of color on follow-up guidance on the the the added versus and appreciate

from overall us in think about not the unprecedented demand you're an But trying relative certain there? the what call? about it's sometimes think segments. I X%. said sounds sort for thinking because I Maybe to very of you're benefit like out helpful just in product drivers part new retail the to such of big help tease major up how a flat 'XX, to with know the to backdrop you industry an the industry number

to help maybe well. interest expense, items I I with below-the-line guide below number, of on quite count, as about Obviously, know how getting an line? to you're be some then you don't think EPS number I the in an should that's but And but don't the right to the mid-$XX we us tax if the based share maybe thinking mean, low range, and EPS

Okay. of line. little be below Great. the Thanks, of James. of a and provide on sort helpful I'll commentary questions your start perspective may for terms for Joker XXXX. bit on retail to It some of saw with in we what their from

we obviously, lot saw to and of I think favorability XXXX, in things nature. adjustments some if we that of just with a start relative line, blue pension

that's driver from in terms see So primary of you what the that standpoint.

earlier through from benefiting are little bit the a on buybacks an have we we shareholders with that walked Obviously, today. that EPS share perspective of kind focus

to that for kind a you to said, little that, for flatback reasons. do equates on retail, of any how to pretty X% jochen, for point, James, Jochen, we fact bit wider variety big So what us, you that? a as as than we further you up touched pretty see normally But I certainly comment is of shareholders. on flat the consideration the to XXX,XXX a XXX,XXX. kind of to range a want reward Relative think,

year time. environment, to certainly interest an year. to It's been the the to I entire our the a we works or riding Touring the our categories, very extraordinary And early the of in it we headwind, rates all this not really throughout overall we'll profit U.S. shift indicated guidance. more believe, to we've global is see Retail market. need in most much including 'XX. a We it to American while North the great. just much what closer product. towards the guidance. profitability, But guidance focus already has markets, We get is at season earlier. reception in significance which just the of in piece out. Well, into Early have point is It's have And add the how terms International North able not mix America in

that early give a with in positive, to what's comes new So to what we've U.S. 'XX. really to Early it weight, indications when our it's guidance retail now to the we have model launch pull than lot possible. of more see said. too requires just growth but And are way concrete market right

just some share I any If those Obviously, the just those XXXX. same count be the think clarification, could and everybody swing could helpful. sneak in page. tax I really factors. Jonathan. to Is way That's just on is about -- for want to a sure there the are make rate

obviously, commitment Yes. in looking I question. talked consistent XXXX. as count, buybacks, we to And our Yes. think No, think through at with looked great what about we share we've at share

down cadence time. obviously, So come over that will

share probably buy we'd a from throughout the quarters. buyback So back perspective,

worth that's across thinking will then that Obviously, set the movement, year. not factoring that's time. just block target is share piece we've in the impact and looking through big think But how the in dollar one price that I at in at looking

to guidance the James, team to Jonathan as I've given on EPS year. to next and be the challenge give finance of able

hopefully calendar your So to achieve will mark be that. able

Looking forward it. to

from line question Thomas of next Capital Markets. is with Our Tristan Martin the BMO

your a expensive I cloud let's special more expensive a Glide, Glide or 'XX. on Touring If Street But just example, I 'XX Street model get it's for thoughts is the wanted at, 'XX. 'XX to, pricing. more comparable the X more for than features think year to like kind I of a much are look 'XX say, base than

or promotional? changes, too kind of this your wanted get of to these address model So MSRPs affordability I overall kind on just an way just thoughts lowering some just up the getting to consolidation? Is straight of without

that and market. are several competitive, that, to now that early and price content, base we've benefits that said, wanted to models features we've we we we our products the that ST now that in models believe reactions comes the our Well, as base we from given our new additional And accomplished reflect the a levels make and as included mid in the standard increased level special you in our sure seen to rightly key equipment. previously sure, had for the and

product a special we've In packages features of at to of overall that's essentially that to complexity is offering are tried setup. get point, and and reducing achieve and at our what to pricing lot allow addition, touring ST up P&A customers by this we a that level, level our

pricing our higher it's but than competitive, I [ X ], it's we're So think of and model in new again, our our the and products worlds carryover that our you the pricing that's taken have It's new if at And quarter still achieving all actions while to needed that than base best new our model. that consider fourth for STs and lower look the pricing. 'XX, we the special. with is XXX

we've -- give we special and that's accordingly dealer them So STs them essentially move continue that needed needed the support in support think made. price to to key out and decision And and to to I order sell to them.

and that in see benefits mid now incorporated features our had comments in our previously online understand already special far, so it's that lot more we've people there's And successful that forums, in be proven levels. lot very and more key and a will a STs you

question from line Zatzkin the comes KeyBanc. of Noah with next Our

Maybe on one for LiveWire just me.

in opportunity? terms out ramp changed of anything several the for Looking next there? how are you the view years, business your thinking and over has the about the unit medium-term profitability And

But as really cost right as focus now, look and about product can. fast Noah. our at guess I to you, reach is Thank we improvement. we innovation want when Livewire We profitability

to So we're position a as the strong develops. in the market opportunity capture

the internal leader now, plan reach as we EV being [indiscernible] term, innovation soon profitability X-wheel as focused the long-term a to vision of performance and driven right again by short our So industry, strong remain on in in

Research. question is Longbow the MacGregor next from with of David Our line

you of I guess to Del Could the year? that experience What about the XXXX? in that the to grown this Karim, consumer quarter, dealers to this bit how LiveWire through 'XX. discussion. expecting up just kind reaction the kind you're I may on XXX are you you talking and have And sales grow in bikes the about talk follow a dig little of deeper year? retail wanted XXX Mar, into shipped you SX could to

this Well, about we look, good feel for in the we so that hand because orders Thanks question, QX Yes. shipments done more at question. the follow-up shipments stage, far. have pretty

conversion So in the short the retail good and feel about term. we pretty

to working you dealers, really globally. Now achieve attainable on why is Obviously, retail our very for when look retailers engine supporting it at a absolutely of which that hard target retailers number creating we're at for you it the a saw retail. we and reached XXX banks, makes

So our goal is to with match essentially XXXX, retail in wholesale.

is momentum at and sustained deliver the team on to to work So retail making support hard whole study.

line Next Jamie with from the Morningstar. question Katz comes of

in think focus other level this longer that new to want on us the of I'm normal I it quarter-over-quarter. share, which about something that guys consumer But is maybe are is Or to demand term? shift given structurally wondering trying improved you in the where help market types time? you that XX% actually bikes. over Would to drive to

mentioned That's our our the as unit earlier, part is mix has this Tri-cruiser from right? been categories, shifting Well, our Jamie. average core successful. focus to our $X,XXX Touring. We've Thanks, core towards proven And has extremely very profitability that shift strategy focus of the clear, $X,XXX. up --

obviously, 'XX, said, to profitability, model extraordinary So XX.X%, that our not terms being so obsessed over That of with which few We to. opportunity. grow the that well we year to served overall have by our has believe in years improved sales want unit last new us business from X.X% improvement. we

also We have environment. foundation, economic more the need right a but accommodating we

I'm for then high are customers. and talking a environment, industry challenge tough that economic interest rates core our of say about many our I when And

want address end strategy don't at profitable focus will to the will evade to appropriate our comes on what I and If that's how question, of we the X So is time. hardwire our the that, growth but And after that complete your Stage growth. 'XX. answer at we

through or of in we course, been, We the I've come able and large offering take environment, to year, to we also rolling this swing to XX%, But year, I be, in to is shares, next especially on are share where were because mean do we're XX-month that obsessed the we an competitive that market going never plans going see that it's pleasing our by give if but in all product, throughout shares. development X%, you're commanding, tough but quarter, share, should at likely opportunity see see our positive fourth Touring to will. the a we always have to XX%. fruition. back look a to cruiser never market grow not that's and that's that's touring our trike certainly And there market think believe especially and backward. forward great take I

from touring least Stage positive will which And been it. is as first fact, end early that carry in comment until of going to has bottom II, it's And the little in opportunity, that rebuild at every us that I not it's very a the years And a but The our as refresh. about refresh. lasting give good development be, end XXXX. a mentioned, complete It's the the to think platform, up I at of Hardwire respect, we hopefully, through since but 'XX. and how in in future the reactions well, feel is it's

the today from a And Rolle for Davidson. question line final we of with Brandon have D.A.

Just a your question on margin guidance.

additional provide model from the to additional costs called you costs up year Could a as of receiving this headwind lineup. year. feedback those I you're out 'XX had guidance manufacturing think additional color manufacturing being any for on then and the you headwind size amount

Thank some and right. within on what have with from seeing manufacturing we your we're Brandon. there. that of perspective All of the We'll sort a you, start question noise

productivity So last there we a we've through over put we've walked XXXX what a seen out obviously, $XXX landing. the from envision price years where of target We and million couple perspective.

offset that inflationary lands So we of XXXX, help in million perspective. from what about an see $XXX to positivity

As make perspective we in we you through feel are as you time, kind what sure talk depending looking some that to look see, wide from fall that. of pretty with means we headwinds at other. concert positive at that obviously look obviously, we of volume a When about this movement over we we wholesale the a that with from upon at fairly want retail ranges, our each our moving where an and perspective, margin overall take

of obviously pay have leverage we or a have structural lot sort a to deleverage to that from as a impact. you through and cost attention think We

that think an of could now overall a as noise from about, manufacturing And look as what And a impact. talked optimization, so efficiency, that then as at try chain standpoint, or our have deleverage this Glide and we significance we transformative hitting work I is what Jochen launch little supply as to bit just you from leverage Road that with certainly, mean about think Glide dealers. we are of Street through the

to sorry, smooth dealership. launch you end make just moving of think to so We fairly through major want what Edel, I all have can to always a you I'm lot we our and variability certainly that, There's question way world change a very lot as occur we're anyone. some or sort on Obviously, the where we model feel occurs that. suppliers are from that it's very, the to and comments But sure have a change a do a that And far. relative in have year not a you we beyond of open have you that overpromising up reception? -- your into 'XX been -- do living with like of

comes time, would new You're ahead to much our product say, positive of to time strategy, overall, when I really product. there's 'XX. carryover not overall your more Maybe to Well, of our the look, pricing reaction it add. and

'XX. think think line, us new road the fourth I positive in in about excitement street help card new taken our I ST. decisions And CVO we've the lots will our reactions to of unilaterally quarter

excitement. years around America the performance in picked Rollie with -- very a we've And that on well but bringing of big group lot I with shown Las well. mentioned speech, of now in of and King on my to our and developing, mean, our priced so Fantastic West been performance other into a with bikes. writing spike, just with a especially Coast, ago. as push we've is started ST, I Bagger product Race product, influencers excitement of up a that Vegas. and CVO trend our We've the the Series our was array hard tried really we saw there lots touring aspect of trend on And parts our I've as

touring market. first our to also I continuous of CVO Adventure developing don't want Touring our testament in forget ever to outside the focus our venture on Touring bike, the a category with development

great overall, feel product, our So And entry also new we that the it. product, we've as Nightstar, good as in accordingly, for well pricing riders an entry about especially bike. adjusted

we some should see overly it's outlook certainly changed, So a happen early interest development the as rates that positive to said, tough I the 'XX excited in But We year. that's was and writing haven't days. season. suggest to prime want the in get doesn't year, don't here. and going overall

of with we'll new to product market. the So balance for our the have excitement realities

And just initial versus if touring the you throughout break be I for costs question. line manufacturing out start-up year? on the could Would just additional cost new the production the costs manufacturing to follow able up

ever single I can the say Harley-Davidson think in in that we largest made. is a investment platform all

and will think, of year-over-year comp. our And move Yes. the as Brandon, and we is our news good us that the kind you talk I from about hear year do through financials more

continuing talk perspective, the that that from sort a breakouts P&L. So provide our to standard our we're fashion, of through -- sure obviously revenue we'll through in we'll we're and seeing in make walk

his throughout that some into yes, we'll that make see that about things prepared match that you certainly noisy. is with we as getting and that a you changes throughout to comments, quarter-over-quarter and terms talked envision would units be be is through this throughout I And about feel is So that XXXX and at retail network. we year. about we bit that is And we'll talked shipping wholesale little the of as some the Jochen you things the important. excited talking very XXXX, imagine, obviously, between But promise we When something of talk will do this. dealer in about look

call for today, Thank I'd CEO, to back you. closing comments. over to Jochen any close out Zeitz, To the hand like

thank today. you everyone to Well, for Yes. joining us again

many Before to well for we I wanted contributions her off, endeavors. take to just you her years thank the company future over to opportunity past very O'Sullivan X the the sign to wish Edel and on

and very thank thank So you much, this all joining Edel, you for us morning.

Thank you.

does you. ladies today's conclude for call. Thank Thanks and conference gentlemen, joining. And this

great day. disconnect. now may a Have You