---
title: Harley-Davidson Raises Full-Year Guidance After Net Income Falls 26%
description: Harley-Davidson lifted full-year guidance on North American retail gains and a 17% dealer inventory cut even as net income fell 26% in Q2 2026.
author: Darie Nani (Editor-in-Chief)
date: 2026-07-25T08:06:11.711Z
updated: 2026-07-25T08:06:11.718Z
canonical: https://www.sovereignmagazine.com/article/harley-davidson-q2-2026-guidance-raise
image: https://cdn.nanimediahouse.com/harley-davidson-touring-motorcycle-q2-2026-30561.webp
categories: Markets
content_type: News
region: Global
publication: Sovereign Magazine
schema_type: Article
---

Harley-Davidson raised its full-year 2026 guidance on July 23, even as second-quarter net income attributable to the company fell 26% to $80 million and diluted earnings per share dropped 15% to $0.75. The Milwaukee motorcycle maker lifted its outlook for global wholesale shipments, retail sales and operating income at its motorcycle division, citing first-half results and gains in market share.

Consolidated revenue fell 6% to $1.23 billion from $1.31 billion a year earlier, and operating income dropped 32% to $76 million. The declines were driven largely by Harley-Davidson Financial Services (HDFS), where revenue fell 55% to $117 million and operating income fell 69% to $22 million, after the company sold a portfolio of retail finance receivables in the second half of 2025 and shifted toward what it calls a capital-light model. HDFS operating margin fell to 18.5% from 27.1% a year earlier.

The motorcycle division's numbers moved in the opposite direction: HDMC revenue rose 6% to $1.1 billion, and its adjusted EBITDA margin widened to 10.4% from 9.3% in the prior-year quarter. Global motorcycle shipments reached 39,209 units, up 9%, and the company introduced the 2026 Super Glide in June.

## Why Harley-Davidson Raised Guidance Despite Falling Profit

President and CEO Artie Starrs pointed to the split between the finance arm's planned wind-down and the motorcycle business's improving execution. Harley-Davidson raised its guidance for HDMC operating income to a range of $10 million to $50 million, up from a prior range spanning a $40 million loss to $10 million in profit. It also raised its outlook for HDFS operating income to $55 million to $65 million, from $45 million to $60 million previously, and lifted its expected range for HDMC global retail sales and wholesale shipments to 133,500 to 138,500 units, from 130,000 to 135,000.

> "Given this progress, our first-half results, and our market share gains, we are raising our full-year guidance and remain confident in our ability to create long-term value for shareholders."
> — Artie Starrs, President and CEO, Harley-Davidson

## What Rising North American Retail Sales Signal for Consumer Spending

The clearest read on discretionary demand sits in the regional retail figures. North American retail motorcycle sales, the company's largest and most closely watched market, rose 3% to 29,751 units in the quarter, with strength concentrated in the Touring and Sport categories and what Harley-Davidson describes as a positive response to its 2026 lineup. Worldwide retail sales rose 1% to about 42,500 units. EMEA sales fell 9%, a decline the company links in part to weakness in the German-speaking region of Germany, Austria and Switzerland, even as Touring and Sport categories performed well there. Asia Pacific was roughly flat at about 5,000 units, though the company describes the region as slightly positive, led by growth in Australia and New Zealand, and Latin America rose 4% to about 800 units.

Alongside the North American gain, global dealer inventory of new motorcycles ended the quarter down 17% from a year earlier. Rather than pointing to discounting, Harley-Davidson draws its own connection between these two figures as the basis for its guidance raise: fewer unsold bikes on dealer lots, financed at a cost to the dealer, paired with a retail increase in its core market, is the reading the company itself offers as evidence that big-ticket motorcycle purchases are holding up domestically even as group profit, weighed down by the financial-services transition, moved the other way.

The six months through June also showed the cost of that transition in cash terms. Operating activities used $60 million in cash in the first half of 2026, compared with $509 million provided in the same period last year. Harley-Davidson still paid $41 million in dividends and repurchased $158 million of shares, or 7.9 million shares, on a discretionary basis, and held $1.9 billion in cash and equivalents at the end of June. The effective tax rate for the period was 25%.

## Harley-Davidson Back to the Bricks Strategy Explained

Harley-Davidson has attributed the improved motorcycle-division profitability to progress on its [Back to the Bricks](https://investor.harley-davidson.com/our-strategy/default.aspx) plan, a strategy built around five pillars: recognizing the company's existing competitive advantages, recommitting to its dealer network, taking immediate action to recapture market share where it has what the company terms a right to win, strengthening its financial position toward better free cash flow and EBITDA margin, and blending fresh leadership with institutional knowledge on its management team. The company continues to expect a LiveWire operating loss of $70 million to $80 million for the year and capital investments of $175 million to $200 million, both unchanged from prior guidance. LiveWire, the electric motorcycle unit, posted revenue of $9 million in the quarter, up 52% on higher electric motorcycle and STACYC electric balance bike sales, though its operating loss was largely unchanged at $18 million.

## FAQ

**Q: What is Harley-Davidson's Back to the Bricks strategy?**
It is the company's plan to rebuild profitability around five areas: its existing competitive advantages, a stronger commitment to its dealer network, immediate steps to recapture market share where it has a right to win, a path to better free cash flow and EBITDA margin, and a management team combining new and existing leadership.

**Q: Why did Harley-Davidson's profit fall even as guidance was raised?**
Second-quarter net income fell 26% to $80 million mainly because Harley-Davidson Financial Services revenue and operating income dropped sharply after a 2025 loan-asset sale and a shift to a capital-light model, a decline that outweighed a 6% revenue increase and wider margins at the core motorcycle division.

**Q: Is Harley-Davidson's dealer inventory shrinking?**
Yes. Global dealer inventory of new motorcycles ended the second quarter down 17% from a year earlier, a reduction the company cites alongside a 3% rise in North American retail sales as evidence of steadier underlying demand.