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Winnebago shares fall after Q4 results, cloudy outlook

By Will Feuer

Shares of Winnebago Industries Inc. fell more than 12% after the company reported better-than-expected fiscal fourth-quarter results, but said a variety of factors could weigh on demand for its recreational vehicles during the year. coming year.

Inflation and rising interest rates are hitting demand for the company’s boats, RVs and trailers at dealerships, chief executive Mike Happe said on a conference call with analysts. He said demand could also normalize after surging during the pandemic as Americans splurged on pandemic-safe recreational activities like boating and road trips.

The company has cut production at some of its businesses to try to meet dealer demand so it doesn’t end up with a glut of one-year-old models, Happe said. This resulted in a 33% decline in unit shipments in the fourth fiscal quarter.

The company is also still experiencing higher costs associated with its struggling supply chain, he said. While prices for steel, aluminum and wood have fallen significantly, semiconductor chips are still in short supply, Happe said. He also said that due to the tougher retail environment, the company may have less pricing power in the year ahead than last year.

Chief Financial Officer Bryan Hughes said the company did not raise prices in the last quarter, citing market momentum, largely replenished dealer inventory and anticipation of a major dealer event in september.

Shares of Winnebago traded down 12% to $52.99 in the afternoon, on track for the biggest percentage decline in the stock since November 2020. So far this year, the stock is now 29% lower.

The comment also pressured the shares of other manufacturers of boats, recreational vehicles and powersports vehicles. Shares of Polaris Inc. fell more than 5% while shares of RV maker Thor Industries Inc. fell more than 9%. Shares of Patrick Industries Inc., which makes components for the recreational vehicle and motorhome industries, fell nearly 7% and shares of Camping World Holdings Inc. fell 6%. Shares of boatbuilders Mastercraft Boat Holdings Inc. and Brunswick Corp. fell 5% and 4%, respectively.

For the company’s fourth fiscal quarter, which ended Aug. 27, Winnebago’s results exceeded expectations. Revenue rose 14% to $1.18 billion, although that figure was only up 4% when excluding sales from its Barletta Pontoon Boats business, which it bought there about a year ago.

Adjusted earnings were $3.02 per share, beating expectations.

The company’s trailer segment showed signs of weakness, with sales down 12%. The segment’s backlog also fell by 66%. The company’s motorhome segment saw sales gains of 24%, but also saw its backlog decline by 27%. MKM analyst Scott Stember said the drop in arrears could signal more problems to come.

Write to Will Feuer at [email protected]