Operating income of $346 million was well ahead of last year with growth coming from both our reported segments.
The Motorcycles and Related Products segment delivered $228 million which is $143 million better than last year, driven by units, a stronger product mix with growth in our Touring and Cruiser families and lower operating expense versus a year ago.
The Financial Services segment delivered $119 million of operating income, $96 million better than last year due to lower actual losses and a lower loss provision.
We delivered earnings per share of $1.68 with no significant restructuring charges taken within the quarter.
The TAM declines were driven by a 30% net reduction in the number of dealers and price increases taken across the portfolio as we work to restore profitability within those markets.
Across the dealer network, worldwide retail inventory of new motorcycles was down 48% versus a year ago behind our strategic shift on supply and inventory management.
Inventories were up 60% over Q4 as we work to build back inventory ahead of riding season.
Looking at revenue, total motorcycle segment revenue was up 12% in Q1, 3 points of this growth came from volume on motorcycle units and parts and accessories as we benefited from the retiming of the new model year launch and the lapping of the 2020 COVID shutdowns.
And finally, we realized 6 points of growth from mix as the increased contribution from Touring more than offset the unit declines in our less profitable small cruiser models.
Absolute gross margin percent of 34.1% was up 5.1 points versus prior year driven by stronger volume, favorable mix and the lapping of heavier promotional periods in Q1 of last year.
Total operating margin of 18.5% was up significantly versus prior year due to the drivers already noted, lower operating expense.
The Financial Services segment operating income in Q1 was $119 million, up over $95 million compared to last year.
The total provision for credit losses decreased $102 million from Q1 2020 driven by an allowance decrease of $82 million and lower actual credit losses of $20 million.
Focusing in on HDFS' base business, new retail originations in Q1 were up 25.8% versus last year behind higher new motorcycle sales as well as strong used motorcycle origination volume.
Market share for new U.S. retail financing remains strong at 63.5%.
At the end of Q1 2021, HDFS had approximately $1.7 billion in cash and cash equivalents on hand and approximately $1.6 billion in availability under its committed credit and conduit facilities for total available liquidity of $3.3 billion.
Cash and cash equivalents remained elevated, but were down approximately $800 million from Q4 2020 levels as we gradually pull cash back down to normalized levels.
HDFS continues to manage its debt to equity ratio between 5 times and 7 times, and well within the debt covenants of no higher than 10 to 1.
HDFS' retail 30-day plus delinquency rate was 2.14%, down 123 basis points compared to the first quarter of last year.
The retail credit loss ratio was also favorable at 1.4%, a 133 basis point improvement over last year.
Wrapping up with Harley-Davidson, Inc financial results, we delivered first quarter operating cash flow of $163 million, up $171 million over prior year.
Cash and cash equivalents ended the quarter at $2.3 billion, which is $856 million higher than Q1 last year, but $937 million less than the end of Q4 2020 as we gradually worked down the higher cash balances that were held in the face of the pandemic.
Finally, the Company's Q1 effective income tax rate was 24%, slightly lower than Q1 2020.
Finally, we have also been able to get a much better read on profitable demand for our new model year '21 motorcycles, which is stronger than we had anticipated, particularly in our most profitable segments of Touring and large Cruiser.
As a result of these factors, we are raising our motorcycle segment revenue growth to be 30% to 35%, an increase from the previously communicated growth range of 20% to 25%.
Moving on to Motorcycle segment operating income margins, assuming a successful outcome regarding the EU tariff situation, our updated guidance is a range of 7% to 9%, up from the previously communicated range of 5% to 7%.
This 200 basis point increase reflects an improved demand outlook and confidence in our ability to continue navigating through the global supply chain headwinds.
However, if we are unable to reach resolution, negating the additional EU tariffs, the impact would bring us back to our original guidance of 5% to 7%.
The Financial Services segment operating income growth guidance is now 50% to 60%, an increase from the previously communicated range of 10% to 15% driven primarily by the loss provision adjustment.
Lastly, capital expenditures guidance remains flat to our original guidance of $190 million to $220 million.
We expect approximately 60% of our revenue to come in the first half of the year as we ride the momentum of our model year launch through the riding season.
It's in our DNA, it's embedded in our vision and it's at the heart of our mission and it's part of our 118 year legacy.
As we begin to execute against our strategy of 70:20:10 skewed to our stronghold segments of Touring, large Cruiser and Trike, we will work hard to continue to solidify our position as leaders, acknowledging that these segments are the most attractive of the global market in terms of our profit focus.
Produced only once, each model will have a limited serialized production run of 1,500 bikes and deliver on what Harley-Davidson has always done so well; Iconic design and historic moments.
Pan America was launched globally on February 22nd at a virtual launch viewed by over 350,000 participants across the world.
To date, the Pan America has received widespread global media acclaim with over 2 billion media impressions at a 97% positive media sentiment.
To date, over 350 of our U.S. dealers have signed up to the program representing 63% of the U.S. dealer network on the day of launch.
Each certified pre-owned motorcycle will be sold with a 12 month limited warranty on the engine and transmission and will include a 12 month complimentary membership in HOG, our Owners Group.
With 118 years of uninterrupted heritage, craftsmanship and iconic design, we are unique.

Summary:
We delivered earnings per share of $1.68 with no significant restructuring charges taken within the quarter.
Looking at revenue, total motorcycle segment revenue was up 12% in Q1, 3 points of this growth came from volume on motorcycle units and parts and accessories as we benefited from the retiming of the new model year launch and the lapping of the 2020 COVID shutdowns.
Finally, we have also been able to get a much better read on profitable demand for our new model year '21 motorcycles, which is stronger than we had anticipated, particularly in our most profitable segments of Touring and large Cruiser.
As a result of these factors, we are raising our motorcycle segment revenue growth to be 30% to 35%, an increase from the previously communicated growth range of 20% to 25%.
Moving on to Motorcycle segment operating income margins, assuming a successful outcome regarding the EU tariff situation, our updated guidance is a range of 7% to 9%, up from the previously communicated range of 5% to 7%.
The Financial Services segment operating income growth guidance is now 50% to 60%, an increase from the previously communicated range of 10% to 15% driven primarily by the loss provision adjustment.
Lastly, capital expenditures guidance remains flat to our original guidance of $190 million to $220 million.
Each certified pre-owned motorcycle will be sold with a 12 month limited warranty on the engine and transmission and will include a 12 month complimentary membership in HOG, our Owners Group.