What happened

Shares of Harley-Davidson (NYSE:HOG) were down 6.5% as of 2:30 p.m. EST Tuesday, after the motorcycle manufacturer announced disappointing fourth-quarter 2018 results.

More specifically, Harley's quarterly revenue declined 8.7% year over year to $955.6 million, translating to adjusted (non-GAAP) net income of $28 million, or $0.17 per share. Analysts, on average, were anticipating earnings of $0.28 per share on revenue of $1.05 billion.

Man riding a Harley-Davidson Softail Low Rider

IMAGE SOURCE: HARLEY-DAVIDSON.

So what

Harley's worldwide motorcycle sales fell 6.7% during the quarter, to 39,311 vehicles. But its weakness was the most pronounced in its core U.S. market, where motorcycle sales declined 10.1% to 20,849 vehicles. On the top line, revenue from Harley's motorcycle segment declined 6.6% this quarter to $738.2 million, parts and accessories sales dropped 15% to $142.2 million, and general merchandise revenue fell 18% to $58.4 million.

But if Harley's struggle to find growth wasn't enough, during the subsequent conference call management revealed that tariff costs this quarter climbed by $13.4 million, including increases in both the EU and China. Harley also took a $55 million hit this quarter under its selling, general, and administrative expenses, related to two voluntary recalls.

Now what

Harley plans to accelerate its "More Roads to Harley-Davidson" initiative in an effort to pull in 2 million new riders in the U.S., bring international sales to 50% of its total volume, and launch 100 new "high impact" motorcycle models by 2027.

In the meantime, Harley expects to ship 217,000 to 222,000 motorcycles in 2019 -- down from just over 228,000 in 2018 -- including 53,000 to 58,000 in the first quarter.

In the end, Harley might well be taking all the right steps to return to sustained, profitable growth in the coming years. But given its relative underperformance to end 2018, and another expected decline in shipments this year, it's no surprise to see the stock falling today.

Check out the latest Harley-Davidson earnings call transcript.