(Reuters) -Harley-Davidson on Wednesday forecast 2025 profit and motorcycle revenue to be flat to down 5% as the company feels the heat from consumers tempering big-ticket purchases, sending its shares down 2% in premarket trading.

Analysts were expecting motorcycle revenue to rise 1.5% in 2025, according to data compiled by LSEG.

Demand for leisure vehicles has fallen off since the pandemic, while sticky inflation and steep borrowing costs have forced cash-tight Americans to prioritize spending on necessities rather than luxuries.

The storied motorcycle maker has also struggled to gain traction with younger riders, who are choosing modern, feature-packed and affordable bikes from other manufacturers instead.

Retail sales of Harley's motorcycles in top market North America fell 13% in the fourth quarter, with the company flagging persistent pressure from higher interest rates and lower sales of non-core motorcycles.

In an attempt to fend off some of the strain on profitability, Harley has updated its lineup for 2025 to include more higher-margin Touring bikes and sharpen focus on custom-vehicle operations targeted at its more affluent customers.

"The industry has faced many challenges over the past couple of years, impacting at all levels, but we believe we are best-positioned to take advantage of any uptick in consumption," said Jochen Zeitz, chairman, president and CEO of Harley-Davidson.

Rival Polaris, maker of motorcycle brand "Indian", also reported a lower fourth-quarter income in January and said it anticipated "challenging headwinds" to carry forward into 2025.

Harley posted a fourth-quarter net loss of $117 million, or 93 cents per share, compared with a profit of $26 million, or 18 cents per share, a year earlier.

Total revenue for the quarter ended Dec. 31 was $688 million, down 35% from a year earlier.

(Reporting by Nathan Gomes and Aishwarya Jain in Bengaluru; Editing by Devika Syamnath)