Matt. Thanks
expected. generally second quarter finished Our results financial as
by were international However, in sales our challenged markets. developed retail weakness
to full quarter, margin. to annualized incremental restoring the million a and the EU to than noted, of burden We a we forward roughly key which $XXX look look and of behind operating expectations as that and XXXX. forward for the the the margin we later tariff second of During the in to shipments year begin European expected relief, early Matt and expect quarter in uncertainty putting reduction us our came factor tariffs
down The second motorcycle down restructuring lower due and our partially versus charges. results segment impacted lower In quarter, operating operating offset income was on unfavorable is lower and year services was year-over-year shipments, incremental income. Financial prior Slide QX income SG&A Consolidated by mix, of tariffs net was lower the XX. summary by income X.X%. operating to
retail for and In tightening generating the was Earnings per delivering face was managing of impact the adjusted incremental and cash a headwinds, disciplined remain long-term. the $X.XX. shareholder excluding a the operations, quarter and of $X.XX. ongoing share from sales costs when on restructuring returns EPS aggressively plan we strong focused inventory, retail costs, over tariffs
XX down worldwide new X.X% Slide motorcycles year. versus prior Harley we're of sales QX, retail On in Davidson
with rate sales Our improved decline, was quarter. improvement the the retail were was second of down QX retail quarter months, retail the In line first in the we prior last and first U.S. sales over versus year's decline down U.S. which rate X.X% in expectations. rate year. which experienced an Through X.X% was sales than our lower were six of
were International was first plan. markets by six driven markets. in our months quarter down the X.X% of were developed Through second international which in short weakness our X.X% markets the down
inventory increasing difficult such our international to developed our increase international developed XXXX and especially continuing encourage near to marketing we expect investments trial be to the conversion addressing in We sale. term markets. and markets addressabley year as softness manage to in and are by is unfolding a the In and U.S. it levels
motor our XXXX exciting new launching. year And are just from cycles motor weeks away
significant our stabilizing Harley-Davidson more the we grow help our our roads build of roads riders. globally. growth is plan XXXX business next aimed U.S. the building Harley-Davidson over strategy also to the the to steer We and We our generation invest more continue industry more believe core is the deliver Thorough fundamentals back markets. in as U.S. foundation in at driving and international to in riders to proper growth
sequentially last of in of continued Slide take were versus year improved as line the share. X.X% Let’s and on down rate to U.S. lower the U.S. XX. the down closer decline. quarter in Retail The HD over look result within market a U.S. due quarter with improvement and prior year's QX industry sales the rate a was at an headwinds industry QX’s
the quarters, last encouraged new for over decline believe of the we soft continues challenged bikes U.S. use two by be While industry by we to bike the are tempering industry prices. the
see bike motorcycles, We shifting also bikes. toward demand to new smaller the continue of other displacement styles including
more share our segments was where up part for not In of quarter currently XX.X%, we as market represent will participate of starting by Touring bike enter X.X for segments, down of quarter. next the Cruiser share performance in market, the Second roads do XXX plus percentage the CC stronger driven plan. we which the segments, points was market these we new do our approximately and segments compete, registrations year but X.X points, percentage XX% which
dealer focused initiatives a slow stronger were increased selling the focus we be we sales During back marketing execution execution on sustainable believe our were positively the QX incentives. dealer forward, impacted and We focus strategic but move our quarter of jumpstart to stronger effective incentives sales move our a while term increased season. term incentives the the expect more In play our and shorter start longer our equity we investments. to increased the second as efforts very by of first role growth and and quarter, retail as to sales will dialing
second Looking the our prices used bikes Harley dealer quarter. bikes network and for quarter rose used eighth at Davidson consecutive of
inventory inventory over quarter new new by low the is manage prior prices year. past bikes the the place This use cut retail with versus quarters, the to a While we of dealer the the approximately U.S. over were We as inventory and to in We at in end X,XXX used year. the quarter compared decreasing end into were encouraged of motorcycles the we pleased network quarter. tightly firming good prices model bike remain dealer shipments new. of in bike at resulted levels believe the several
sales prior international markets, sales year noted sales X.X%. down higher were below which lower emerging markets On by as versus X.X% result developed retail were in slide International our I a up XX, offset as expectations. quarter sales down second were of and partially
markets including in driven China Retail markets. markets digit by our increases sales emerging in double various and growth were ASEAN
our to sales behind segments and Softail retail with strong test of markets markets across campaigns. outside developed and our were these new XX.X%. were our Touring down competitive Western QX we lapped efforts markets We dealers internationally Weakness Japan sales and initial a introductions expanding However, industry motorcycles. in most programs as dealer Cruising. sales product sales international on down strong stronger support and will in Retail and of focus in continue in Europe continued contracting new ride in Australia
to last sales adversely was Our X.X% the Street results Europe X.X lapping due points down year-to-date market year Softail percentage prior in versus recall. motorcycles by impacted by the lower our Street and of year's the implementing share strong impact of
confident remain great that the plan – detail and we a more reinforces, Harley-Davidson. markets offer potential to international our in As on to committed
in wholesale X.X% year’s QX On our to second at guidance. of shipments were roughly versus the mix slightly Touring down motorcycle and shifted family last midpoint Slide Overall, XX, quarter.
for revenue X.X% the XX, quarter X.X% in Slide Motorcycles year-over-year the was motorcycle a in segment On second decrease shipments. behind down
adversely Revenue higher impacted revenue X.X%, the during quarter. driven which by growth bike. outperformed year-over-year exchange, sales in decrease by and sales retail adversely motorcycle Both partially and decrease QX a per This merchandise impacted decrease general unfavorable sales offset the currency was second in the motorcycle by $XXX was revenue by largely P&A support. quarter average pricing
Product was manufacturing as unfavorable families driven shipments, Slide merchandise million mix in of in offset gross higher down by mix. partially general higher margin unfavorable unfavorable XX, mix and by model expense and $XX.X unfavorable by quarter On the mix, pricing. lower result was a P&A within and QX
production and driven optimization In our of largely QX, also Manufacturing $XX.X on and initiative. incremental tariff manufacturing absorption by was to and unfavorable related year impacted reduced costs. manufacturing China versus shipments lower prior inefficiencies million was adversely temporary by EU
partially restructuring lower compared by offset a XX, management, Roads for revenue offset year, margin continued by higher QX expense benefit of and On Slide from by SG&A More increase partially gross as to to lower was and margin, operating aggressive driven SG&A percent investment. expenses. last marketing lower
Restructuring $X.X quarter the year million in manufacturing charges from $XX.X second financial. down for prior totaled optimization million
income XX in and higher credit yields rate the Financial strong Services interest provision Slide portfolio. million was segment’s due The $X.X was X.X% up second quarter, unfavorable the receivables quarter on loan driven the $XX.X to on losses compared losses. by Net year-over-year year. shown to operating million down higher million income retail motorcycle was for interest prior $X.X
up of of the in change loan Harley-Davidson were implemented Dealer versus financial XXXX. result system, motorcycle from result a reporting the higher as segment January year which the in Operating depreciation due Systems a prior new expenses services which investment and segment our in business to as moved a of to management was
results are market during by sales credit of by originations Slide HDFS there At cash HDFS X.X available HDFS' the market retail quarter, through conduit higher at $XXX.X the driven million lower and billion year quarter. strong versus percentage share and on and facilities. liquidity end XX. prior the cash offset a up down equivalents of points HDFS $X.XX X.X% were bank partially motorcycles XX.X% QX operational was was of share.
$XX of During QX, and transactions to totaling just completed also billion. $X HDFS securitization two Harley-Davidson million pay dividends Inc. over asset-backed
impacted first XX, loan of our inefficiencies implementation in credit plus from new Slide our the quarter. startup XX-day the both and by delinquency were adversely On losses resulting system management
however, are The to delinquencies us; system during occurred higher through we behind that will issues continue work largely operational implementation. the
third retail sequentially but last higher in rate balance year’s QX up or basis the X.XX%. The through The on our metrics X.XX% for receivables key on XX-day basis rate, credit QX rate annualized QX be was receivables was improved sheet loan sheet was retail than from loss expect XX XXXX which points motorcycle points. XX impacted quarter. We balance for to delinquency
QX’s was roll basis basis above loss as results Inc. financial time Slide are XXXX losses. delinquent summarized rate Harley-Davidson increase remaining points increased credit XX. loans for to it takes up which through seven points XX of QX was on to the The
capital cash income. was net last quarter million which million, cash lower operating last $XXX.X Year-to-date year. was and by higher slightly driven cash $XXX.X equivalents flow was end than and working year, lower versus Our down balance
demonstrate Regarding liquidity, to We cash needs ROIC minimum that leader credit Slide clear we ROE to the to months maintain and to of liquidity motor leader generate at the shareholders. are of in XX company committed a the in has a projected company and intends ability and/or HDFS, on in a continue charts and believe facilities. our cash we and return at our are XX
the company equity strategies and by and XXX objectives of capital the through is XXXX superior our deliver guiding motor invested ROIC measured return business return S&P One best-in-class at execution the of quartile top HDFS. as by in five on to on
superior returning return share Slide $X.XXX cash of our increasing XX the form investing In second paid we and shareholders. $XX.X in all stock. cash of illustrates business, XXXX, repurchases. and our recent quarter in intend dividend quarterly per value priority. excess repurchased to history for our of to share we top Driving After to a dividends shareholders of a is stakeholders our our the our of million
quarter. in initiative. is manufacturing Slide optimization initiative in the our second of this Key multiyear XX successfully were summary milestones completed a
$XX $XX expect in million XXXX. to million for to savings continue We
to Matt are $XX expected annual million after million to As ongoing XXXX. noted, cash be savings $XX
$XX costs QX were we million Manufacturing in $XX.X approximately in optimization expect million costs of QX. and
million which manufacturing quarter incur expense, They our the $XX margin our a very have guidance. we in million provide investments to our $XX by We investments returns. and gross simplify improve million expect points. these over full is roughly year, believe most focus a footprint, attractive recent operational operating For and $XX of reduction percentage to one
on XXXX to on XX. Moving guidance Slide
and EU these bikes tariffs motorcycles produced at on tariff to for X%. recently Sportster our treatment Softail discussed, Matt facility from our As we Thailand favorable obtained XX% reducing
similar We expect terrain year. a later motorcycles nontrite this approval for
and EU the production begin in tariff XXXX. at dealers inventory to Thailand rates through, After our We to expect motorcycles in late in market shipping European expect flow we for reach early October. lower QX
guidance. the QX begin had QX the EU our had took The longer tariff than an sales bikes With in timing and versus we of our low process has shipments, for approval of original the and adverse shipment income operating anticipated early to delay impact regards early the plan in on revised considerably to was XXXX.
significant inventory receipt a inventory the de-load to reduction in inventory Our of production of replenishment, supply to delayed QX low-tariff XXXX. transition tariff of plan constraining of start-up high prior temporarily The year. shifts high-tariff included in the end the the
expect planned. into we to result, we originally than in Europe a bikes QX ship fewer As
motorcycles to We be dealer to expect due the approval. in of in our shift combination of approximately inventory company and timing the Europe down X,XXX
as operating lower our our benefit income to rates regards XXXX operating anticipated. not tariff will With from originally XXXX margin, in
the retail we addition, units. denial. softer with costs experienced drivers, well capacity a as to have a approval of as expected our full In increased guidance units as awaited a idle these approach as lowering approvals XXX,XXX of we cost in we event to in XXXX the European manufacturing than shipment dual-path Consequently resulting X,XXX key XXX,XXX of year delay Thailand by from are sales and
to reduced million. margin XXXX inventory original reducing X% from tariff behind demand from guidance our X%. in million are tariff In de-load shipments to year lower $XXX our Europe. to XXXX expectation Full we addition, motorcycle full of and incremental be previous expected approximately been costs guidance to as are $XXX year expected the Tariff of to income have operating $XXX costs X% we European million high X% lower
ship to to motorcycles. XX,XXX XXXX for third we XX,XXX expectations Other motorcycles In year unchanged. largely quarter, the approximately expect full are
shipments, third be versus to points investment. lower tariffs SG&A by and impact three marketing margin behind also last down increased operating We continuing percentage approximately driven quarter higher of expect planned year,
to provide decisions right the make long-term investments sustainable shareholders. to growth value our continue to We and drive and to long-term
while our global various plan. through to Roads market continue through proactively We our headwinds, future continuing in manage and often to More invest significant
the restoring margin. As forward, million European $XXX put the uncertainty excited incremental are of we we a us and look to look behind roughly tariffs forward to of annualized
ahead We to the shareholders. are face to challenges our for committed and company and strong returns Thank long-term driving you. the growth for prepared
your take let's now And questions.
