Slowing Top Line Growth
Thor manufactures recreational vehicles (“RVs”) sold to independent dealers throughout the U.S. and Canada. These big ticket items can cost an average of over $90,000. RVs appeal to middle-aged consumers; citizens between the ages of 55 and 74 have been growing by double-digits. This helped spur revenue growth; revenue growth from the segment had been gaudy in previous years, but appears to slowing.
In the quarter-ended July 2018 the company’s revenue of $1.8 billion was down 3% Y/Y. Revenue from Towables was flat, while revenue from Motorized vehicles was down by double digits. Based upon Thor’s current book of business, this could be a line of demarcation. The company’s organ revenue could continue to fall sans.
I interpolated unit sales for Thor by taking the difference between (1) year end unit sales and (2) unit sales through the first nine months of 2018 and 2017. Unit sales for Towables and Motorized vehicles were down Y/Y by 6% and 25%, respectively; on a blended basis, unit sales were only off by about 8%. Some of the lost unit sales were made up for by an increase in average selling price (“ASP”).
Declining revenue, declining margins, and free fall RV shipments could mark the death knell for Thor. Read more: