Harley-Davidson on Junk Credit Watch After 12% Sales Decline
S&P has placed Harley-Davidson’s BBB credit rating on review for possible downgrade to junk status following a 12% drop in sales. The rating agency cited weakening North American demand as Harley’s shipments declined year-over-year, raising concerns over cash flow and debt metrics.
1. Credit Rating Under Review
S&P has moved Harley-Davidson’s BBB credit rating to negative watch, signaling a potential downgrade to junk status if cash flow projections and debt ratios do not improve. The review reflects concerns over the company’s ability to generate sufficient free cash flow to cover remaining debt maturities.
2. Sales Decline Pressure
Harley reported a 12% year-over-year decline in motorcycle shipments, primarily driven by soft demand in North America. The sales drop has strained operating margins and heightened scrutiny of inventory levels and promotional incentives.