James Hardiman: Hey, good morning. Thanks for taking my question. So follow up on the guidance and Jonathan really appreciate that the added color on sort of the wholesale versus retail. I think you said for retail in ’24 flats up 9%, maybe help us with the major drivers there. I know it’s sometimes not very helpful to think about an industry number because you’re such a big part of the industry in certain segments, but just trying to tease out the overall sort of how you’re thinking about the demand backdrop relative to the benefit from what sounds like an unprecedented new product haul. And then maybe help us with some of the below the line items as well. Obviously you don’t guide to an EPS number, but tax and share count, maybe interest expense. I think we should be getting to an EPS number in the low to mid $4 range, but I don’t know if that’s quite right based on how you’re thinking about the below the line. Thanks.
Jonathan Root: Okay, great. Thanks James. I’ll start with sort of some of your questions on what we saw from below the line. It may be helpful for Jochen or Edel to provide a little bit of commentary in terms of their perspective on retail for 2024. I think if we just start with below the line, obviously we saw a lot of favorability in 2023 relative to some pension adjustments and things of that nature. So that’s the primary driver in terms of what you see from that standpoint. Obviously shareholders are benefiting from an EPS perspective with the focus that we have on share buybacks that we kind of walked through a little bit earlier today. So certainly for us pretty big — pretty big consideration point I think for how we reward shareholders.
Relative to retail as you said, the flat to up nine kind of equates to $163,000 to $178,000. Jochen James as you reflect back, kind of touched a little bit on the fact that that is a wider range than what we normally see for a variety of reasons. But Jochen, do you want to comment any further on that?
Jochen Zeitz: Well not much to add to what I already indicated earlier. It’s early in the year. We really need to get closer and into the writing season at this point in time. We believe we have an extraordinary product. Early reception is great, but the overall environment in terms of interest rate is certainly headwind which we, experienced very much throughout the entire year of ’23 and we’ll just have to see how it works, how it all works out and our retail guidance is a global guidance. It’s not just the US or North America guidance. Touring, while we’ve been able to shift the mix in the international markets including profitability more towards our profit focus categories, it has the most significance in the North American market.
So that requires the US market to pull a lot of weight when it comes to retail growth in ’24 and we just have to see what’s possible. Early indications right now with our new model year launch are positive, but it’s way too early to really give more concrete guidance than what we’ve said.
James Hardiman: That’s really helpful. If I could just sneak in a clarification, Jonathan, is there any way to just think about the tax rate and share count for 2024? Obviously those could be some swing factors and just want to make sure everybody’s on the same page.
Jonathan Root: Yep, no, great question and I think as we think about share count, obviously, we’ve talked through our commitment to looking at share buybacks consistent with what we looked at in 2023. So obviously that cadence will come down over time. So from a share buyback perspective, we’d probably buy back throughout the quarters. Obviously not in one big block at time, but I think that’s the piece that’s worth factoring in is looking at share price movement, looking in the dollar target that we’ve set, and then just thinking through how that will impact across the year.
Jochen Zeitz: James, I’ve given Jonathan and the finance team the challenge to be able to give guidance on EPS as of next year. So mark your calendar and we’ll hopefully be able to achieve that.
James Hardiman: Looking forward to it. Thanks, guys.
Operator: Our next question is from the line of Tristan Thomas Martin with BMO Capital Markets. Your line is live.
Tristan Thomas Martin: Good morning. I just wanted to kind of get your thoughts on the mild year ’24 touring pricing. If I look at, for example, ’24 street glide, it’s more expensive than a base street glide for ’23. But I think the features are much more comparable to, let’s say, like a street glide special, where ’23 is more expensive than ’24. So just kind of wanted to get your thoughts on kind of some of these changes, the model consolidation, is this just an overall way to address affordability without just straight up lowering MSRPs or getting too promotional?
Jochen Zeitz: Well, we wanted to make sure that our new products are competitive and we believe that we’ve accomplished that for sure given the early reactions that we’ve seen in the market and as you rightly said, we included several key features and benefits that we previously had in our ST and special models in our mid-levels now and increased the price from the base level of our base models to reflect the additional content that now comes as a standard equipment. In addition, we are offering a lot of P&A packages that allow our customer to essentially get up to a product that is at ST and special pricing level and features level and that’s what we’ve tried to achieve by reducing at this point overall complexity of our touring setup.
So I think it’s the best of all worlds that we’re achieving with our new pricing. It’s competitive, but it’s still 24,999 and that’s while higher than our base models, it’s lower than our STs and special. And again, if you look at the pricing actions that we have taken in the fourth quarter and our carryover products, that needed to consider the new pricing for our new models. So STs and special needed to — we needed to give support and continue to need to give dealer support to price them accordingly in order to move them out and sell them and I think that’s essentially the key decision that we’ve made and so far it’s proven very successful and the comments that you will see in online forums, people understand that there’s a lot more key features and a lot more benefits that we’ve previously had in our STs and special now already incorporated in our mid-levels.
Operator: Thanks for your question. Our next question comes from the line of Noah Zatzkin with KeyBanc. Your line is live.
Noah Zatzkin: Hi, thanks for taking my question. Maybe just one on LiveWire for me, looking out over the next several years, how are you thinking about the unit and profitability ramp there? And has anything changed in terms of your medium-term view for the business and the opportunity? Thanks.
Jochen Zeitz: Thank you, Noah. But I guess when we look at LiveWire right now, our focus is really about product innovation and cost improvement. We want to reach profitability as fast as we can. So we’re in a strong position to capture the opportunity as the market develops. So right now we remain focused on our long-term vision of being the leader in a two-wheel EV industry driven again by innovation and performance in the short term, a strong internal plan to reach profitability as soon as possible.
Operator: Our next question is from the line of David MacGregor with Longbow Research. Your line is live.
David MacGregor: Yes, good morning. Thanks for taking my call, my questions. I guess I just wanted to follow up on the LiveWire discussion. Karim, could you dig a little bit deeper into kind of the experience this quarter, the consumer reaction to the ST Del Mar? You shipped 660 bikes in ’23. Could you talk about kind of retail sales and how that may have grown through the year and you’re talking about 126 dealers this year. What are you expecting to grow that to in 2024? Thank you.
Karim Donnez: Yeah, thanks for the question, follow-up question. Well, look at this stage, we feel pretty good about the Q4 shipments because we have more orders in hand that shipments done so far. So we feel pretty good about retail and the conversion in a short term. Now we absolutely working really hard on creating a retail engine and supporting our dealers, which is why you saw that we reached 126 retailers globally. Obviously, when you look at the number of bikes, it makes it for very attainable target for retailers to achieve at retail. So our goal is to essentially in 2024 match retail with wholesale. So the team is hard at work to deliver on making retail momentum sustained and to support wholesale.
David MacGregor: Thanks. Good luck with that.
Operator: Our next question comes from a line of Jaime Katz with Morningstar. Your line is live.
Jaime Katz: Hi, good morning. I want to focus in on market share, which actually improved quarter over quarter, but I’m wondering where you guys are trying to structurally drive that to over time? Or is it something that that may be, this 40% level is the new normal given the shift in consumer demand to other types of bikes? Would you help us think about that longer term? Thanks.
Jochen Zeitz: Thanks, Jamie. Well, our focus of this part of this strategy has been very clear, shifting the mix towards our core focus, our core categories, right? That’s the tri cruiser touring and that that shift has proven extremely successful. We’ve mentioned earlier, our average unit profitability is up from 1300 to $3,700. So, not being obsessed by unit sales over the last few years served us well in terms of overall profitability, which is improved from 6.3% to 13.6%. So extraordinary improvement. That said, obviously, we want to grow our business to we believe that with our new model year ’24, we have that opportunity, we have the right foundation, but we also need a more accommodating economic environment and when I say economic environment, then I’m talking about our industry and high interest rates that are a tough challenge for many of our core customers.
