Harley-Davidson outlined plans for a sharper product lineup and tweaks to its e-commerce strategy under its new chief on Tuesday, as the storied motorcycle maker navigates slowing sales amid a broader consumer pullback on big-ticket purchases.

Executives described 2026 as a “transition year,” a narrative that helped steady investor sentiment, lifting its shares up 2% after they had tumbled in premarket trading on news of a wider fourth-quarter loss.

“The choppiness and volatility in global retail results is a continuation of what we have observed since mid-2024, with a difficult global backdrop in big-ticket discretionary sectors,” Chief Financial Officer Jonathan Root said on a post-earnings call, adding that pricing remains a priority for customers.

Inflation Squeezes Household Budgets

Sticky inflation and high borrowing costs have squeezed household budgets, prompting Americans to be more discerning about how and where they spend their dollars.

With overall volumes under pressure, Harley has been partly leaning on demand for its higher-margin touring and custom motorbikes from wealthier customers.

The company last year also announced a smaller, lower-priced “Sprint” model, slated for release in 2026, in hopes of drawing in entry-level riders.

CEO Artie Starrs said near-term margins would remain under pressure as the turnaround strategy is finalized, but noted that the management sees a path back to stronger long-term earnings and free cash flow.

The company said it would provide more details on its new strategy in May on its first-quarter earnings call.

The efforts align with its previous moves to streamline operations, including a spin-off of its struggling electric motorcycle unit, LiveWire.

Tariff Concerns Linger

Harley continues to face pressures from U.S. tariffs on imports of components such as semiconductors used in modern motorbikes.

The company said new tariffs cost it $22 million in the fourth quarter and $67 million in 2025.

Milwaukee-based Harley manufactures most of its core products domestically and sources about 75% of the components from American suppliers.

Its gross margin fell by 3.8 percentage points in 2025, compared with the year earlier.

$279 Million in Fourth Quarter Losses

The company reported a net loss of $279 million, or $2.44 per share, for the fourth quarter, compared with a loss of $117 million, or 93 cents per share, a year ago. Analysts on average estimated a loss of $1.04 per share, according to data compiled by LSEG.

Overall quarterly revenue dropped 28% to $496 million.

(Reporting by Nathan Gomes in Bengaluru; Editing by Shilpi Majumdar)