The company cited strong demand for new models and a rebound in U.S. sales late in the quarter. Harley also said it will not lower prices on its iconic motorcycles and that a recent drop in its share price warrant ramping up a share buyback.

The stock jumped $2.21 to $57.13, but remains well below its Dec. 2014 52-week high of $70.41.

"We will not meet discounting with discounting. We will not be putting tags on our motorcycles. That is certainly the easiest way to address some of the competitiveness we are experiencing in the United States," CFO John Olin said on a conference call.

The company beat analysts' expectations, reporting net income of $299.8 million, or $1.44 per share, in the second quarter, down 15 percent from $354.2 million or $1.62 share a year earlier.

Analysts had expected earnings per share of $1.39.

Total revenue fell to $1.82 billion from $2 billion a year ago. Analysts had expected $1.67 billion.

Harley-Davidson's worldwide retail motorcycle sales fell to 88,931 in the second quarter, from 90,218 a year ago.

Harley said the strong dollar's impact on its core U.S. market was significant because it drove ongoing, aggressive price discounts by rivals.

Asia-Pacific retail sales jumped 16.6 percent in the second quarter, while sales in Europe, Latin America and Canada were lower.

Sales of the "Street," a lighter, smaller model aimed at a urban buyers, brought new riders into the brand both in the United States and internationally.

"In its initial year alone, seven out of 10 Harley-Davidson Street motorcycles in the United States were new to the brand, in EMEA it was nine out of 10 and in the India nearly all Street customers were new to our brand," Olin said.

The company kept its motorcycle shipment forecast unchanged, predicting a 2 percent to 4 percent increase from 2014, or 276,000 to 281,000 motorcycles.

The company plans to issue $750 million in long-term debt in coming weeks to fund an expanded share buyback that will add to 2015 earnings, CEO Matt Levatich said.

(Reporting By Meredith Davis; Editing by Nick Zieminski)

By Meredith Davis