On June 20, 2024, Winnebago Industries Inc (WGO, Financial) released its 8-K filing for the third quarter of fiscal 2024, ending May 25, 2024. The company reported revenues of $786.0 million, falling short of the analyst estimate of $806.13 million. Diluted earnings per share (EPS) came in at $0.96, also missing the estimated EPS of $1.21.
Company Overview
Winnebago Industries Inc (WGO, Financial) manufactures Class A, B, and C motor homes along with towables, customized specialty vehicles, boats, and parts. Headquartered in Eden Prairie, Minnesota, Winnebago has been producing recreational vehicles since 1958. Revenue was about $3.5 billion in fiscal 2023. Winnebago expanded into towables in 2011 with the acquisition of SunnyBrook and acquired Grand Design in November 2016. Towables made up 79% of the firm's RV unit volume, up from 31% in fiscal 2016. The company's total RV unit volume was 39,447 in fiscal 2023. Winnebago expanded into boating in 2018 with the purchase of Chris-Craft, bought premium motor home maker Newmar in November 2019, and bought Barletta pontoon boats in August 2021. It also is developing electric and autonomous technology.
Performance and Challenges
Winnebago Industries Inc (WGO, Financial) faced a challenging quarter with revenues decreasing by 12.7% compared to the same period last year. The company reported a gross profit of $118.2 million, representing a 15.0% gross margin, down from $151.4 million and a 16.8% gross margin in the previous year. The decline in gross profit margin was attributed to deleverage, operational efficiency challenges, and higher warranty expenses.
CEO Michael Happe commented,
“While outdoor industry market conditions remain challenged given inconsistent retail patterns and sustained dealer discipline relative to field inventory levels, we are generally pleased with the resiliency of our portfolio, as our teams balance the pursuit of long-term share, profitability and customer satisfaction across our premium brands.”
Financial Achievements
Despite the challenges, Winnebago Industries Inc (WGO, Financial) returned $87.8 million to shareholders through share repurchases and dividends in the first nine months of fiscal 2024. The company also reported cash and cash equivalents of $318.1 million at the end of the quarter, up 2.6% from year-end fiscal 2023.
Income Statement Highlights
Winnebago Industries Inc (WGO, Financial) reported a net income of $29.0 million for the third quarter, down from $59.1 million in the same period last year. The reported EPS was $0.96, compared to $1.71 in the previous year. Adjusted EPS was $1.13, a decrease of 46.9% from $2.13 last year. Consolidated Adjusted EBITDA was $58.0 million, down 39.8% from $96.4 million in the prior year.
Segment Performance
| Segment | Net Revenues | Adjusted EBITDA | Adjusted EBITDA Margin |
|---|---|---|---|
| Towable RV | $386.3 million | $41.9 million | 10.9% |
| Motorhome RV | $299.0 million | $13.4 million | 4.5% |
| Marine | $87.9 million | $8.5 million | 9.7% |
Balance Sheet and Cash Flow
As of May 25, 2024, Winnebago Industries Inc (WGO, Financial) had cash and cash equivalents totaling $318.1 million. The company reported total outstanding debt of $695.4 million and working capital of $581.9 million. Cash flow provided by operations was $99.4 million for the third quarter.
Analysis
Winnebago Industries Inc (WGO, Financial) continues to face headwinds in the outdoor lifestyle market, with declining revenues and profitability. However, the company's strategic investments in product development and market share growth, particularly in the Towable RV and Marine segments, demonstrate resilience. The return of capital to shareholders and a strong cash position are positive indicators of financial health. Moving forward, the company will need to navigate market challenges and leverage its diversified portfolio to drive growth.
Explore the complete 8-K earnings release (here) from Winnebago Industries Inc for further details.
