Patrick Industries executives said their discussions with RV dealers found lower inventory levels as the second quarter of 2023 ended.
The news brought optimism to executives’ comments Thursday to analysts while reporting second-quarter financial results.
Patrick CEO Andy Nemeth said: “We are becoming increasingly optimistic and starting to sense tailwinds building on the horizon for the RV industry. Our estimates suggest dealers have reduced unit inventories as weeks on hand even further in the second quarter from the first quarter.”
Nemeth said dealers’ mix of 2022 model year RVs has fallen from about 30% of inventory at the end of the first quarter to 10% to 15% at the end of the second quarter.
“We feel like the channel is very, very clean right now,” he said. “As we go through the next quarter in anticipation of the (Elkhart Extravaganza) show in September, we think that production will be scaled as it is and has been. … We are encouraged and optimistic as it relates to really the cleanliness of the inventories and the weeks on hand that are sitting there today. We think it is well positioned.”
Company President Jeff Rodino said Patrick’s estimates of RV dealers’ inventory declined to 16-18 weeks on hand at the end of the second quarter from 19-21 weeks on hand the previous quarter. Rodino said historical pre-pandemic inventory levels were 26-30 weeks on hand.
Second-quarter RV revenues declined 54% as wholesale RV shipments slowed. However, Patrick Industries increased its content-per-RV by 6% from the second quarter of 2022. The company said the increase was driven by market share gains.
