Performance in Q1 was driven by a 14% retail increase in North America, which management attributes to aggressive inventory rightsizing and targeted incentives on legacy models.

The 'Back to the Bricks' strategy marks a pivot from a heavy focus on premium touring and electric models toward a more balanced, rider-centric portfolio designed to improve entry-level accessibility.

Management identifies a loss of brand relevancy as a primary driver of recent volume declines, specifically citing the 2022 discontinuation of the iconic Sportster model as a strategic gap.

The company is adopting an 'enterprise profitability model' that prioritizes dealer health, under the rationale that dealer profitability reduces the need for OEM discounting and attracts network capital.

Operational execution is shifting toward a capital-efficient approach, leveraging existing platforms and powertrains to launch new motorcycles rather than developing entirely new architectures.

Parts and Accessories (P&A) are being repositioned as a core growth driver, with plans to reinstate 30% of previously eliminated SKUs to capture high-margin customization revenue.

Market dynamics in Europe and Asia Pacific remain subdued due to economic pressures, though management noted early momentum for 2026 models arriving late in the quarter.

Management expects to achieve $350 million plus in EBITDA by 2027, anchored by $150 million in fixed cost reductions and the full-year impact of new model launches.

The return of the Sportster in 2027 and the launch of the lightweight Sprint in late 2026 are expected to be primary drivers for mid-single-digit retail unit growth.

Guidance assumes a one-to-one relationship between retail and wholesale units for 2026 as global dealer inventory has reached what management considers a healthy, balanced level.

The financial framework targets a structural step-change in margins, aiming for gross margins approaching 30% and operating expenses below 20% of sales over the medium term.

HDFS is transitioning to a capital-light model, expecting to sell approximately 2/3 of future loan originations while retaining high-value servicing and insurance revenue streams.

A $15 million restructuring charge was recorded in Q1 related to headcount reductions and the elimination of certain roles to align with the new cost-saving targets.

Tariff headwinds are expected to be $75 million to $90 million for the full year, which is an improvement from the prior guidance range of $75 million to $105 million.

HDFS revenue declined 54% year-over-year, a structural result of the transition to a capital-light model and the sale of a significant portion of the retail loan book.

Supply management costs were higher than expected in Q1 due to a 'unique supplier situation' that impacted HDMC gross margins.

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Management argues that the 'Back to the Bricks' strategy addresses demographics by reintroducing entry-level models like the Sportster and Sprint.

Artie Starrs noted that the Sportster historically sold 35,000 to 40,000 units annually and remains the #1 request from the global dealer network.

Jonathan Root expects tariff costs to decrease consecutively each quarter through 2026 as the company works through older inventory.

The company is pursuing mitigation and recoveries but noted that 2027 should be 'arguably more attractive' under current regulatory structures.

Management stated they have reached a cost structure for the new Sportster that is profitable at the expected MSRP.

The strategic value lies in the 'enterprise model,' where entry-level bikes drive high-margin P&A attachment, service revenue, and future trade-ins.

Artie Starrs clarified that Harley-Davidson has no current intentions to provide additional direct funding to LiveWire beyond the capital commitment made in late 2025.

The focus for LiveWire remains on the imminent launch of the S4 Honcho and improving cash flow through product innovation.

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