Yahoo Finance LiveWire Group Inc (LVWR) Q1 2024 Earnings Call Transcript Highlights: Navigating Challenges ...
Revenue: Decreased by 5% in Q1.
Operating Income Margin: 12.6% to 13.6% expected, down 100 basis points from 2023.
Net Income: Operating income down 29% in Q1.
Earnings Per Share (EPS): $1.72 in Q1.
Free Cash Flow: Operating cash flow of $104 million in Q1, up from $47 million in the prior period.
LiveWire Operating Loss: Improved forecast to $105 million to $115 million from previous $115 million to $125 million.
Market Capitalization: Not directly mentioned, but share repurchases and dividends indicated strong capital return focus.
Same-Store Sales: Retail sales flat overall; North America up 6%, EMEA down 11%, Asia Pacific down 12%.
Store Locations: Not explicitly mentioned, focus on dealer inventory levels being healthy.
Release Date: April 25, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Can you speak to the health of the dealer network given the macro stress and inventory issues? A: Jonathan R. Root, CFO of Harley-Davidson, Inc., acknowledged that rising interest rates impact dealer health but expressed optimism due to strong customer interest in new models like the Street Glide and Road Glide. He mentioned that the company supports dealers with selective interest rate subventions and dealer-facing programs to help manage inventory and maintain dealer network health.
Q: How did retail growth in North America for Q1 break down between model year '23 and '24? A: Jonathan R. Root explained that at the start of Q1, sales were predominantly from model year '23, but as the quarter progressed, the majority of sales shifted to the newly introduced model year '24, particularly in touring models like the Street Glide and Road Glide.
Q: What are the expectations for retail trends and inventory levels moving forward? A: Jochen Zeitz, CEO of Harley-Davidson, projected that model year '23 inventory would largely be sold by the end of Q2. He outlined expectations for retail and wholesale movements throughout the year, with retail expected to overtake wholesale in the second half of the year.
Q: What drove the improvement in LiveWire's operating loss guidance? A: Karim Donnez, CEO of LiveWire Group, Inc., attributed the improved operating loss guidance to the centralization of operations in Milwaukee, which will yield significant cost reductions and efficiencies, including a 10% reduction in headcount and a 15% cut in employee-related costs.
Q: How did HDMC gross margins perform in Q1, and what are the expectations moving forward? A: Jonathan R. Root noted that HDMC gross margins were in line with expectations at 31.2%, despite a decrease from the previous year due to lower operating leverage and pricing pressures. He maintained that the company expects modest cost inflation and improvements in gross profit margins in line with their targets.
Q: Can you provide an update on the adoption of Harley-Davidson Flex Financing? A: Jonathan R. Root indicated that while uptake of Flex Financing will require time as dealers adapt to the new sales process, initial responses have been positive, with a significant number of dealers already utilizing the product. He emphasized the importance of training and integration into the sales process to fully realize the potential of this financing option.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
