Winnebago (WGO) reported quarterly earnings earlier this week. The company delivered revenue of $536.2 million and EPS of $0.94. The company beat on revenue and earnings. WGO rose by single digits initially, but is down by single-digits since the earnings report was released. I had the following takeaways on the quarter.
Revenue Growth Was Impressive
Winnebago designs, manufactures and markets motorized and towable recreation products, along with supporting products and services. Motorhomes generally provide living accommodations for up to seven people. Towables are used as temporary living conditions for recreational travel. Motorhomes can cost more than $90,000, while Towables average just over $30,000 per unit. Winnebago’s top line growth has been impressive, but the bigger it gets the harder it is to deliver double-digit revenue growth.
In the most recent quarter Winnebago’s revenue was up 14% Y/Y. Revenue from Motorhomes rose 1%, while Towables were up 26%. Sales of Towables have been strong likely due to younger buyers attracted to RVs, but unable to afford the more expensive motorized units.
Towables were driven by strong organic growth across the Grand Design and Winnebago-branded businesses. The company has been taking market share in the Towables sector, which means competitors could be feeling pinched even as RV industry shipments appear to be slowing.
Total deliveries were 11,942, up 20% Y/Y. Motorhome deliveries grew 5%, while deliveries of Towables were up 1%. The average sales price (“ASP”) for Motorhomes declined 4% while ASP for Towables rose 1%. Nonetheless, dark clouds may lie ahead for WGO and the RV industry. Read more: