American motorcycle manufacturing company Harley-Davidson (NYSE:HOG) announced better-than-expected results in Q1 CY2024, with revenue down 17.5% year on year to $1.48 billion. It made a GAAP profit of $1.72 per share, down from its profit of $2.04 per share in the same quarter last year.

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Founded in 1903, Harley-Davidson (NYSE:HOG) is an American motorcycle manufacturer known for its heavyweight motorcycles designed for cruising on highways.

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Sales Growth

A company’s long-term performance can give signals about its business quality. Even a bad business can shine for one or two quarters, but a top-tier one may grow for years. Harley-Davidson's revenue was flat over the last five years. Within consumer discretionary, a long-term historical view may miss a company riding a successful new product or emerging trend. That's why we also follow short-term performance. Harley-Davidson's annualized revenue growth of 1.1% over the last two years is above its five-year trend, suggesting some bright spots.

We can dig even further into the company's revenue dynamics by analyzing its number of motorcycle shipments, which reached 57,700 in the latest quarter. Over the last two years, Harley-Davidson's motorcycle shipments averaged 2% year-on-year declines. Because this number is lower than its revenue growth during the same period, we can see the company's monetization of its consumers has risen.

This quarter, Harley-Davidson's revenue fell 17.5% year on year to $1.48 billion but beat Wall Street's estimates by 9.5%. Looking ahead, Wall Street expects revenue to decline 15.8% over the next 12 months.

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Cash Is King

If you've followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can't use accounting profits to pay the bills.

Over the last two years, Harley-Davidson has shown mediocre cash profitability, putting it in a pinch as it gives the company limited opportunities to reinvest, pay down debt, or return capital to shareholders. Its free cash flow margin has averaged 7.7%, subpar for a consumer discretionary business.

Harley-Davidson's free cash flow came in at $57.64 million in Q1, equivalent to a 3.9% margin and up 3,588% year on year.

Key Takeaways from Harley-Davidson's Q1 Results

We were impressed by how significantly Harley-Davidson blew past analysts' revenue expectations this quarter. We were also excited its EPS outperformed Wall Street's estimates. That full year guidance was maintained means the company is on track. Overall, we think this was a really good quarter that should please shareholders. The stock is flat after reporting and currently trades at $39.6 per share.

Harley-Davidson may have had a good quarter, but does that mean you should invest right now? When making that decision, it's important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it's free.