Harley-Davidson is betting on a sharper product lineup and changes to its online sales strategy as weak demand and higher costs pushed the motorcycle maker deeper into the red.
The company said 2026 would be a “transition year” as it adjusts to slower consumer spending on big-ticket items. That message helped calm investors. Shares of Harley-Davidson Inc rose about 2% after falling earlier in the day.
Slowing Demand Hits Revenue
Sticky inflation and high borrowing costs have made buyers more cautious. Chief Financial Officer Jonathan Root said customers are focused on pricing as global retail conditions remain volatile.
Harley reported a net loss of $279 million, or $2.44 per share, for the fourth quarter. That compares with a loss of $117 million, or 93 cents per share, a year earlier. Analysts had expected a smaller loss.
Quarterly revenue fell 28% to $496 million.
Betting on Premium and Entry-Level Models
With overall sales under pressure, Harley has leaned on higher-margin touring and custom bikes sold to wealthier customers.
At the same time, the company plans to launch a smaller and lower-priced “Sprint” motorcycle in 2026. The goal is to attract first-time riders and expand its customer base.
Chief Executive Officer Artie Starrs said margins will remain under pressure in the near term as the turnaround plan takes shape. He said management still sees a path to stronger long-term earnings and free cash flow.
Harley said it will share more details about its strategy in May during its first-quarter earnings call.
Tariffs Add to Cost Pressure
Costs remain a major challenge. Harley said U.S. tariffs on imported parts, including semiconductors, added $22 million in costs in the fourth quarter and $67 million in 2025.
The company sources about 75% of its components from U.S. suppliers and builds most of its core motorcycles domestically.
Still, gross margin fell by 3.8 percentage points in 2025.
Harley’s strategy follows earlier moves to streamline operations, including the spin-off of its electric motorcycle unit, LiveWire, as it works to steady performance amid a tough consumer backdrop.
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