In a troubling turn for the legendary motorcycle maker, Harley-Davidson has slashed its full-year revenue forecast, sending shares tumbling amid rising inflation and a growing backlash against its diversity, equity, and inclusion (DEI) policies. The iconic Milwaukee-based company is now predicting a staggering 14% to 16% decline in annual revenue, a far cry from the 5% to 9% drop it previously estimated.
The latest numbers reflect a broader trend of economic challenges facing American consumers, particularly in the motorcycle industry, where the thrill of hitting the open road is becoming increasingly out of reach for many. With interest rates climbing and inflation eating into discretionary spending, Harley-Davidson’s operating margins are expected to fall between 7.5% and 8.5%, down from earlier estimates of 10.6% to 11.6%.
Retail sales in the company’s North America division plummeted by 10%, and overall sales volumes have dipped in nearly every major market. Harley’s CEO, Jochen Zeitz, acknowledged the difficulties, stating, “We have worked diligently through the quarter to mitigate the impact of high interest rates, and macroeconomic and political uncertainty that continue to put pressure on our industry and customers, especially in our core markets.”
The company reported earnings of just 91 cents per share for the third quarter, significantly lower than the $1.38 per share reported a year earlier. Sales of motorcycles and related products totaled $876 million—falling short of analysts’ expectations of $938.2 million. The stock responded negatively, dropping 2.1% in morning trading on Thursday.
In an attempt to navigate these turbulent waters, Harley-Davidson has shifted its focus toward its higher-end touring bikes, which promise better profit margins. However, even these strategic pivots have failed to restore profitability. The company has also rolled out various promotions to encourage new bike purchases, but these efforts have proven insufficient in turning the tide.
Adding to the company’s woes, a social media-driven campaign has ignited a consumer backlash against Harley-Davidson’s DEI initiatives. Conservative activist Robby Starbuck took to X (formerly Twitter) this summer to criticize the company’s policies, leading to a boycott that has resonated with many in Harley’s traditional customer base. Responding to the pressure, the company announced in August that it would no longer enforce hiring quotas or supplier diversity spending goals. Starbuck claimed, “They made this statement because we’re obviously having an impact on their customer base,” noting that his efforts have successfully pressured other companies, like John Deere and Tractor Supply Co., to backtrack on similar policies.
To make matters worse, Harley-Davidson dealers have voiced concerns about inventory issues, claiming they were inundated with excess motorcycles during the summer months. In response, the company indicated plans to reduce dealer inventory by approximately 30%.
In a further blow to its reputation, Harley-Davidson recently recalled over 40,000 motorcycles due to a risk of short-circuiting, which could potentially lead to crashes.
Despite these challenges, Zeitz expressed optimism for the future, stating, “We are expecting further interest rate reductions and improved consumer confidence will provide the industry with a needed tailwind.” As Harley-Davidson navigates these rough waters, many hope the iconic brand can reclaim its place at the forefront of American motorcycle culture, grounded in the values and traditions that have made it a household name for generations.
