Interest in the RV lifestyle remains strong, resulting in a 32% increase in quarterly profits for Winnebago Industries despite backlogs for the Eden Prairie-based company's recreational vehicles and boats caused by supply-chain issues and inflationary pressures.
Demand for RVs remain strong, pushing Winnebago's results
Demand for recreational vehicles remains strong, and now Winnebago is getting good results from its recently acquired boat businesses.
March 23, 2022 at 8:03PM
The company has gained market share, now controlling 14.3% of the RV retail market as of January.
"The healthy demand environment, and the unique strength of our brands, positioned Winnebago Industries well to take continued pricing actions to offset component and material cost inflation and continue to deliver strong margin performance across our segments," said Mike Happe, Winnebago's president and chief executive, in a news release.
Still, Winnebago shares lost 12% of their value on Wednesday, closing at $55.05, a 52-week low.
The company earned $91.2 million, or $2.75 a share, in its second quarter ended Feb. 26. Sales increased 39% to $1.2 billion, the third consecutive quarter of sales over $1 billion.
Earnings adjusted for the $320 million July acquisition of the Barletta pontoon boat business, amortization and other factors, were $3.14 a share, up 42% from the same period a year ago and above analyst expectations of $2.94 a share.
The strong demand, paired with operational leverage and price actions during the quarter, helped to keep the gross profit margin at 18.6%, level with the same quarter last year.
The war in Ukraine is causing further supply-chain disruption, likely meaning more inflationary pressure for the rest of the year. The result will likely be more price increases to protect profit margins, as well as cost containment measures, the company said.
Because demand has remained strong despite supply issues with parts, backlogs grew in the towable and motorhome segments of Winnebago. Sales of towables rose 47% in the quarter over the same period a year ago; the motorhome segment saw a 9% increase.
Happe said Barletta boats outperformed expectations since the expectations, and is now one of the top five pontoon brands by retail market share. The sales results did trigger a $15 million milestone payment as laid out in the purchase agreement.
A backlog worth $278 million was recorded in the boats segments.
"Looking ahead, our world-class team remains committed to operational excellence, and working closely with our dealer partners to replenish their inventories," Happe said in the release.
Even as sales expand across November and December, there are bona fide deals awaiting early risers who brave the chill the day after Thanksgiving.
