The change reflected "worse than expected" performance trends "being displayed by the underlying pool of Harley-Davidson motorcycle sales contracts, including current cumulative net losses that are tracking above Standard & Poor's initial expectations."
How does this relate to earnings? The company said on its earnings call that the 30-day delinquency rate for managed retail motorcycle loans at quarter end was 5.18% compared with 4.83% a year earlier. Managed retail loans include those the company keeps and those it sells through securitization. "We believe the increase in the delinquency rate is consistent with delinquencies for other types of consumer debt," the company said. How comforting!
Another way to look at that, of course, is the way the story was spun here originally: It's not just the subprime loans that are getting hit.
HOG 1-yr chart: