Harley-Davidson, Inc. (NYSE:HOG) had a strange Thursday. The motorcycle maker posted fiscal 2026 third-quarter results that missed Wall Street expectations, and the stock slipped. But the company also raised its full-year outlook for global motorcycle retail sales and for operating income in its Motorcycle and Financial Services segments. So the headline number was ugly and the forward-looking story was better.

Third-Quarter Results Miss Expectations

The company reported diluted earnings of 40 cents per share, missing the analyst consensus estimate of 48 cents.

Revenue from Harley-Davidson Motor Co. (HDMC), its motorcycle business, declined 10% to $964.02 million, missing the Street estimate of $1.06 billion.

Artie Starrs, president and CEO, said the company is executing its Back to the Bricks strategy, focusing on dealer profitability, inventory management and product launches such as the Super Glide and Deadwood, which have been successful in boosting market share.

Motorcycle Sales and Operating Performance

HDMC global motorcycle shipments declined 8% year over year to 33,616 units in alignment with the company's Back to the Bricks strategy.

Worldwide retail motorcycle sales edged up 5% to 35,833 units, driven by growth in North America and Asia-Pacific. North America grew by 9%, Asia-Pacific grew by 1% overall, while Australia and New Zealand grew by 15%. Retail sales in Europe, the Middle East and Africa declined by 5%, while in Latin America they declined by 7%.

North America retail sales, with 25,603 units, represented the company's fourth consecutive quarter of year-over-year growth, demonstrating continued progress in Harley-Davidson's core market.

Global dealer inventory of new motorcycles was down 26% year over year and down 6% sequentially.

Motorcycle revenue decreased 11% to $822 million. Parts and accessories revenue declined 9% to $167 million, while apparel and licensing revenue fell 3% to $62 million.

Gross margin expanded by 173 basis points to 28.1%, driven favorably by manufacturing and foreign exchange, partially offset by unfavorable product mix, net pricing, and raw materials costs.

HDMC adjusted EBITDA increased 0.3% to $93.9 million, with the adjusted EBITDA margin expanding to 9.7% from 8.7%.

Harley-Davidson Financial Services Performance

At Harley-Davidson Financial Services, revenue fell 58% to $111 million and operating income dropped 98% to $11 million as the company continued transitioning to its capital-light financing model.

Operating margin declined to 9.7% from 168% a year earlier, while total retail loan originations were up 4%.

Consolidated Revenue and Profit Decline

On a consolidated basis, Harley-Davidson reported revenue of $1.08 billion, down 19% year over year, while net income attributable to the company declined 89% to $43 million.

The decline was primarily as a result of Harley-Davidson Financial Services' sale of the majority of its securitization beneficial interests and retail finance receivables in the prior year.

Diluted earnings per share fell 87% from a year earlier to 40 cents.

Cash and cash equivalents as of Sept. 30 increased to $2.08 billion from $1.78 billion a year earlier.

During the quarter, the company returned $110 million in total capital, including $91 million in shares repurchases and $19 million in cash dividends.

Harley-Davidson Raises 2026 Sales and Profit Outlook

Harley-Davidson raised its fiscal 2026 outlook for HDMC global motorcycle retail sales to 135,500 to 139,000 units from its previous forecast of 133,500 to 138,500 units.

The company also lifted its wholesale shipment guidance to the same range of 135,500 to 139,000 units.

The company now expects HDMC operating income of $25 million to $55 million, compared with its previous guidance ranging from $10 million to $50 million.

Harley-Davidson also increased its HDFS operating income outlook to $60 million to $70 million.

The company withdrew guidance for LiveWire, its electric motorcycle segment, announcing financial difficulties and no plan to fund its operating losses.

During the earnings call, management highlighted challenges including underperformance in Europe, supplier issues and tariff uncertainties, though the company is actively addressing these with strategic adjustments.

HOG Price Action: Harley-Davidson shares were down 0.61% at $29.68 at the time of publication on Thursday. The stock is trading near its 52-week high of $31.12, according to market data.