Winnebago Industries, the RV manufacturer based in Eden Prairie, Minnesota, reported a year-over-year decrease in sales for the fiscal fourth quarter, highlighting the challenges the company is currently experiencing due to a slump in demand.
The RV manufacturer recorded a profit of $43.8 million, or $1.28 per share, compared to $82.6 million, or $2.61 per share, in the previous year. Adjusted earnings reached $1.59 per share, surpassing analysts’ expectations of $1.36 per share according to FactSet.
Sales declined by nearly 35% to $771 million, falling short of analysts’ projections of $784.3 million.
Factors Impacting Winnebago’s Performance
The RV industry has faced challenges as higher interest rates and rising prices have deterred consumers from making big discretionary purchases like RVs. Winnebago’s CEO, Mike Happe, acknowledges the stubbornness of the retail environment and the ongoing difficulties in the consumer market. Efforts to streamline inventory levels and optimize the supply chain have been in place to address these challenges.
Sales declined across all segments of Winnebago’s business, with the motorhomes unit experiencing the sharpest decline. It is worth noting that motorhomes generally cater to a higher-end customer base compared to Winnebago’s towable RVs. While motorhome sales have been more resilient than towables over the past year, they too have seen a decline.
Despite not providing a specific financial outlook for the upcoming fiscal year, CEO Mike Happe expressed hope for a sales recovery in the second half of the year. He recognizes that the current retail market dynamics and dealer selectiveness will continue to put pressure on sales in the first half. However, as inventory levels stabilize and consumer demand improves, dealers are expected to display a greater willingness to replenish their inventories and introduce additional models in the latter half of the fiscal year.