S&P Global Ratings recently announced a potential downgrade of Harley-Davidson's credit ratings to junk status after the motorcycle manufacturer reported disappointing financial results. The company experienced a significant 12% decrease in motorcycle sales in 2025 compared to the previous year, highlighting a slowdown in demand.
Adding to the concern, S&P noted that Harley-Davidson has not proportionally reduced its manufacturing expenses in line with this decline in sales. This mismatch between declining sales volumes and relatively fixed production costs is a key factor weighing on the company's margins and overall credit metrics.
Harley-Davidson is currently rated BBB-, which is the lowest tier of investment grade. A downgrade to junk status would have tangible implications for investors and could lead to increased borrowing costs for the company, as it would narrow the pool of investors permitted to hold its high-yield bonds. S&P plans to finalize its decision after Harley-Davidson unveils its new strategic plan, anticipated in May, which will be crucial in shaping how credit markets assess the company's financial future.
