Harley shares rise after $5 billion HDFS deal. Proceeds would cut debt, benefit investors.
In a news release, Harley said it has entered into a long-term partnership with financial firms KRR and PIMCO for the sale of existing and future Harley-Davidson Financial Services retail loans.
Harley said it will maintain control of HDFS, which will continue to provide new consumer loans and service existing ones. In 2024, the division accounted for around 20% of Harley-Davidson's revenue.
The company said it plans to use approximately $1.25 billion of cash from the transaction to reduce $450 million of Harley-Davidson debt and return approximately $500 million to shareholders.
The planned debt reduction is expected to strengthen Harley's balance sheet and help the company navigate an uncertain business climate marked by tariffs and a loss of consumer confidence.
'This transaction delivers benefits to all of Harley-Davidson's stakeholders and marks the beginning of an exciting new chapter for HDFS,' company Chairman, President and CEO Jochen Zeitz said in a statement.
Harley announced a lower-than-expected profit for second quarter of 2025 and did not provide an annual forecast in an uncertain economy rattled by tariffs.
The company had a profit of $108 million, or 88 cents per share, down from $218 million, or $1.63 per share, a year earlier. Revenue in the quarter fell 19% to $1.3 billion.
Analysts on average had expected a profit of 96 cents per share, Reuters reported.
Harley said its motorcycle sales were down 15% from a year ago. Sales in North America, the company's largest market, were down 17%, although Zeitz said there were signs of improvement.
Due to uncertainties surrounding tariffs and the global economy, Harley has withdrawn its outook for 2025 that had been provided in February.
"However, our ongoing engagement with various governments gives us cautious optimism that future trade agreements may help limit the overall impact on our operations. The EU agreement announced this past weekend looks to be a positive step forward," Zeitz said.
Early in the afternoon, Harley shares traded at $26.70, up more than 16% from July 29.
This story has been updated with additional information.
This article originally appeared on Milwaukee Journal Sentinel: Harley-Davidson shares jump after $5 billion finance division deal
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