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Mayank Marwah
Mayank Marwah
Articles (1054) 

Key Takeaways From Winnebago's 1st-Quarter Results

The motorhome and towable divisions both recorded revenue growth

December 18, 2020 | About:

Before the market opened on Dec. 18, Winnebago Industries Inc. (NYSE:WGO) released its results for first-quarter 2021, which ended Nov. 28.The American manufacturer of motorhomes posted earnings and revenue that surged from last year and surpassed analysts' expectations.

Snapshot of the quarter

The Forest City, Iowa-based company recorded quarterly earnings of $1.69 per share after reporting a profit of 73 cents in the same period last year. Analysts had called for profit of 98 cents per share. Revenue of $793.1 million grew 35% year over year and edged past analysts' expectations of $752.5 million.

Reflecting on the quarter, President and CEO Michael Happe said:

"Our strong profit performance – including significant margin expansion – reflects the hard work and focus of our world-class Winnebago Industries team, which has maintained a commitment to operational excellence and safely manufacturing our products with a steadfast dedication to quality. We especially remain focused on continuing to deliver for our dealer partners, working hard to replenish their inventories, while ensuring strong financial performance and flexibility for both parties during these dynamic times."

At the end of the quarter, the recreational vehicle maker had total outstanding debt of $516.5 million. In December, the board of directors approved a quarterly cash dividend of 12 cents per share, which is payable on Jan. 27, 2021.

Segment performance

The towable division reported revenue of revenue of $454.9 million, which was up 33.3% over the past year. The Grand Design RV business got a boost during the quarter thanks to the overall strength of the towable product portfolio coupled with increased customer demand as the shelter-at-home orders were eased. The segment's adjusted Ebitda of $63.1 million grew 76.5% year over year. The backlog soared a mammoth 313.4% to 29,659 units due to robust dealer demand.

Revenue for the motorhome segment amounted to $322.4 million, up 42.7%. The growth was primarily driven by contributions from Newmar, which is a leading manufacturer of Class A and Super C motorhomes. Winnebago acquired Newmar on Nov. 8, 2019. Segment revenue climbed 7%, barring Newmar. Class B product line-up, including Revel, Travato and Solis models, witnessed impressive underlying demand in spite of the challenges posed by the pandemic.

The segment recorded an adjusted Ebitda of $30.3 million, up 225.2% as compared to the prior-year quarter. The backlog rose 402.4% to 13,217 units, reflecting the positive impact of Newmar as well as strong dealer demand in the quarter.

Looking forward

Going forward, the company expects to see increased demand for outdoor and recreational products.

"Throughout the remainder of Fiscal Year 2021, Winnebago Industries will be focused on building upon our market momentum, and doing good in the social arena as well," Happe said. "We are confident that the favorable industry dynamics in the RV and marine markets and the unique appeal of our innovative products will continue to drive market share gains and strong financial results."

Winnebago did not provide guidance figures for earnings and revenue.

Disclosure: I do not hold any positions in the stocks mentioned.

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About the author:

Mayank Marwah
A seasoned writer with keen interest in the automotive, technology, telecommunication, retail and aerospace sectors.

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