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It's tough seeing well-known American brands struggle in the modern world. Harley-Davidson (NYSE: HOG) and Kraft Heinz (NASDAQ: KHC) are two companies you want to root for, but they are both facing challenges in today's economic climate.
While both companies have strong legacies and iconic products, they are currently battling sluggish sales and bleak growth outlooks. Those outlooks are not very promising for 2025, which means I think these are two stocks to avoid throughout the year.
1. Harley-Davidson
To put it simply, Harley-Davidson is struggling to sell bikes. The motorcycle maker has had a negative return of 23.8% over the last five years, versus an S&P 500 (SNPINDEX: ^GSPC) gain of 85.1% (at the time of writing). Revenue declined 35% year over year in the fourth quarter of 2024 to $688 million, while full-year 2024 revenue declined 11% to $5.84 billion. Specifically, the bikes side of the business, the Harley-Davidson Motor Company, saw revenues fall 47% year over year in the fourth quarter, while total motorcycle shipments declined 53%.
Total net income came in at $445 million in 2024, marking a 35% decline year over year. In the fourth quarter, Harley-Davidson posted a loss of $118.43 million.
That kind of slump in motorcycle revenue is disconcerting, and begs the question of what the company will do moving forward. Harley, as a whole, has struggled with what seems to be more tepid demand for its products. The company bounced back from a COVID-19-era slump in 2020, but has since seen revenue slow down again. According to an article by Reuters, overall Harley-Davidson sales have been in relative decline since 2015, with 2015 being the highest-selling year since 2010.
Looking forward, the company's own guidance doesn't seem that promising. 2025 expectations are for Harley-Davidson Motor Company revenue to either be flat or down by as much as 5% year over year. The financing side of the business is expected to decline 10% to 15%, while the electric segment should see an operating loss of $70 million to $80 million. Total diluted earnings per share are anticipated to be flat, to down 5% from 2024.
With such a tepid forecast, it's hard to get in the saddle for this one.
2. Kraft Heinz
While I love some of its famed products, Kraft Heinz has struggled for years to create meaningful growth. COVID-19 and eating at home in 2020 created a small uptick for the company's revenues, but performance has been relatively flat ever since. Most recently, the company reported full-year 2024 results that included a 3% decline in net sales, and a decline in diluted earnings per share of 2.2%, bringing full-year earnings to $2.26 per diluted share.