Thompson Research Group founding partner and CEO Kathryn Thompson said the highlight of Thor Industries’ fiscal second quarter was its improved gross margins.
Thor reported gross margins improved 2.2% in the fiscal second quarter from 2021’s fiscal second quarter. Gross margins totaled 17.4%, also up from the 16.6% in the fiscal first quarter.
Thompson called the improved margins “the surprise of the quarter given the anticipated headwinds of inflation and rising costs eventually pressuring margins.”
At current manufacturing levels, cost absorption is substantial, Thompson said. Thor’s labor efficiencies are having a material impact, she said, compared with 2021.
“(Thor) cautioned that margins could see pressure into 2022, but the call that Q1’22 may have been the peak margin quarter was premature,” she said, “as (Thor) was able to deliver another quarter of margin performance.”
The other notable performance aspect, she said, was backlogs. Towable backlogs rose 99% from the previous year with motorized backlogs up 45% year-over-year.
Thor estimated 40% to 60% of backlog orders are firm at the dealer level, with the rest representing dealer inventory orders.
“The current makeup of backlog is higher on the motorized side vs. the historical average,” Thompson said, “due to the extended lead times on motorhomes and impact from chip shortages. … Current indications are that the backlog and order intent remains as strong as ever as dealers anticipate a continued strong demand environment in 2023.”
