Winnebago navigated challenges and implemented changes during its fiscal fourth quarter. The manufacturer’s executives elaborated on various market aspects that affected the company during its fourth quarter and full-year fiscal report conference call.
Winnebago President and CEO Mike Happe said retail sales are “sluggish” compared with last year. He said retail conditions remained unchanged at the end of the company’s fiscal year. Happe said gradual market improvement is expected over the next 12 to 15 months but not starting until the second quarter of 2025.
With a slow retail market, Happe said, “The focus on affordability and price points that consumers are open to engaging with our high volume, lower cost competitors innately probably have more of an advantage and an appetite to compete aggressively in those price points.”
He said the market is flooded with elevated discounts and allowances across towable and motorized segments.
Winnebago Senior Vice President and Chief Financial Officer Bryan Hughes said several operational obstacles swayed the report’s declines, including challenges in the towable division. Two towable plants were consolidated into one but Winnebago was inefficient while making the change.
According to Hughes, several towable RVs’ inventory were managed poorly, leading to write-downs, write-offs and increased sales incentives to move the inventory to consumers. The company also experienced high warranty expenses because of quality issues with the towable RVs.
While warranty issues did arise, Hughes said, “Warranty as a percentage of net revenue in our Grand Design business remains at or below our pre-2023 rates.”
Happe said the company is also satisfied with the positive response to Grand Design’s Lineage Series M motorhome. The vehicle debuted at America’s Largest RV Show and Elkhart Extravaganza last month, and orders began shipping in quarter four.
Inventory turns were down slightly, while Winnebago dealers lowered their inventory 4.5% compared with the 2023 fourth quarter.
Happe said the inventory level “underscores our focus on continuing to aggressively manage production amidst what remains a challenging macroeconomic environment.”
In the face of market obstacles, Happe outlined expectations for Winnebago leaders to boost market gains.
