Harley plans to drive profitability with affordable models, lean inventory

By Nathan Gomes

(Reuters) -Harley-Davidson said on Tuesday it planned to tighten its inventory and shift focus to more affordable motorbikes to offset the cost of tariffs amid slowing demand.

Harley, which continued to withhold its annual forecast due to tariff uncertainties, has traditionally leaned on its affluent customer base to drive sales of higher-margin custom cruisers. But the focus has now shifted towards modern, lighter and affordable models aimed at younger riders.

The company aims to make a mark with its affordable "Sprint" model, slated for release in 2026. The motorbike is set to carry an entry price of below $6,000.

"Young people are looking for something that's fun and maybe has seriousness to it, but not as serious as we're currently presenting it," Harley CEO Artie Starrs said.

The company flagged a tariff charge of $27 million in the quarter, up from a $13 million hit during the prior quarter, as it navigates U.S. President Donald Trump's broad range of tariffs on parts and imports of crucial components such as semiconductors.

However, it tightened its annual tariff hit forecast to between $55 million and $75 million, from $50 and $85 million. Starrs said that retail sales were challenged, and that there was a "lot of work ahead."

Shares of the company fell over 5%.

Still, third-quarter revenue topped estimates on demand for high-margin custom touring models and better operating profit from its financial business.

Its quarterly profit rose to $377 million, or $3.10 per share, from $119 million, or 91 cents per share, a year earlier.

Harley's sales from motorcycles and related products rose nearly 23% in the quarter ended September 30 to $1.07 billion from a year earlier. Analysts on average had expected sales of about $1 billion, according to data compiled by LSEG.

(Reporting by Nathan Gomes in Bengaluru; Editing by Maju Samuel)

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