Harley-Davidson Reports Net Income of $42.762 Million in Third Quarter
Key Facts
Harley-Davidson reported net income attributable to the company of $42.762 million in the third quarter of 2026, compared with $377.366 million a year earlier, while diluted earnings per share came to $0.40 versus $3.10. The results were announced on October 29, after the company had scheduled their release before trading began and invited the public to a webcast discussion from 8 to 9 a.m. Central Time. The year-over-year comparison shows a steep decline in earnings, but the company attributed it mainly to the impact of a financing transaction in the year-earlier period. By contrast, core business indicators showed improved retail sales alongside reduced shipments and inventory. The company also raised its full-year outlook for global retail sales and shipments, and for operating income at its financial services unit.
In its motorcycle business, HDMC revenue fell 10% to $964 million, which the company linked to lower shipment volume. Despite the revenue decline, gross margin rose 173 basis points to 28.1%, reflecting improvement in this measure from a year earlier. But the unit’s operating income fell 18% to $44 million, and its margin declined to 4.6% from 5.0% a year earlier. In a different direction, adjusted EBITDA margin improved to 9.7% from 8.7%. The figures put lower sales and operating income alongside improvements in gross margin and adjusted margin, without removing the pressure that lower shipments placed on unit revenue.
On the demand side, global retail sales of new motorcycles rose 5% year over year, while North American sales climbed 9%. Chief Executive Artie Starrs said North American sales grew for the fourth consecutive quarter as the company reduced dealer inventory. He added that the company achieved a further 26% reduction in inventory as global sales grew 5%. By contrast, global shipments fell 8% to 33,616 motorcycles during the quarter. Global dealer inventory at period-end was down 26% from the end of the third quarter of 2025 and 6% from the second quarter of 2026, while the company raised its full-year outlook for retail units and shipments.
The second quarter provides context for the pressures preceding the latest results: consolidated revenue fell 6% to $1,230 million, and net income attributable to the company declined 26% to $80 million. The units posted mixed results at the time: HDMC revenue rose 6%, while HDFS revenue fell 55%. For the third quarter, Harley-Davidson said the decline in net income was mainly due to the comparison with the prior year, when HDFS sold most of its securitization interests and retail finance receivables, generating a benefit that lifted the comparison base. HDFS operating margin in the third quarter was 9.7%, after reaching 168.0% in the corresponding period of 2025. The company linked the comparison effect to the prior sale, while current-quarter figures show that margins in the financing business returned to much lower levels.
After the results were released, the company’s shares closed at $29.52 on October 28, up 0.27% in the session before the announcement. The company returned $110 million to shareholders in the third quarter, including an estimated $91 million in share repurchases and $19 million in cash dividends. Cash and cash equivalents totaled $2.1 billion on September 30, 2026. The updated outlook included HDMC global retail sales and shipments of between 135,500 and 139,000 units in fiscal 2026, and an HDFS operating income range of $60 to $70 million. In its second-quarter update, the company had set a range of 133,500 to 138,500 units for both sales and shipments, and forecast HDMC operating income of between $10 and $50 million. At the time, it said domestic performance, market-share gains and progress on strategic initiatives supported the higher full-year outlook.