Patrick Industries on Thursday forecast 2023 industry projections showing retail demand outpacing wholesale RV shipments.
In announcing fourth-quarter financial results, Patrick Chief Financial Officer Jake Petkovich said the company expected 2023 retail sales to be in a range of 360,000 to 380,000 RVs. Patrick expects 2023 wholesale RV shipments to range between 325,000 and 350,000 RVs.
Petkovich said the company heard from dealers that inventory, measured by weeks on hand, still appears healthy.
“It still feels like, at least from an anecdotal perspective and our connectivity with the dealer networks, that there is a desire to continue to rebalance the types of units they have,” Petkovich said, “from maybe the lower-end travel trailers to the higher-end fifth wheels and motorized, where there is a little more velocity these days.”
Petkovich said the company heard from dealers at the recent Tampa SuperShow that dealers may have more 2022 models than they would like to have at the start of the year.
“We think about where retail has been, and we use that as the starting place,” Petkovich said. “If you think about this from second half 2021 to second half 2022, or fourth quarter to fourth quarter, we are down about 20%. That guides where we are for at least the very base of building the models that we use for these analytics.”
Patrick President Jeff Rodino said the company estimated dealers had 19 weeks to 21 weeks of RV inventory on hand. Petkovich said that inventory level—which is down from pre-2020 historical norms of 26-30 weeks—was a level at which dealers’ rebalancing activity would take place.
“We have talked a lot about … this desire to achieve the one-to-one retail wholesale kind of equilibrium and velocity,” Petkovich said. “We have seen a couple of months where retail exceeds wholesale. We have seen months over the past two quarters where wholesale has exceeded retail. I think that is principally how that pendulum is going to swing. When we put that together in that philosophy with the analytics as we look at them today and as we assess third and fourth quarter, certainly acknowledging some of the shutdown activity around the holidays that we saw in the Thanksgiving and Christmas, we arrive at those numbers.”
Although manufacturers extended shutdowns following the holidays, Rodino said Patrick has not heard of OEMs entirely shuttering brands.
“I do not know that they have shuttered brands because that is a little bit different than actually slowing production and taking, kind of days and weeks off,” Rodino said in response to a question about brands being shuttered. “We continue to see that through the holiday shutdown, some may be a little bit longer extended than we have seen in the past. However, the manufacturers are starting to come back online and have over the last several weeks.”
Rodino said Patrick does expect some manufacturing production shifts will continue.
“I will tell you that we still see the three-day weeks and the occasional week off,” he said, “but, ultimately, we are seeing a similar activity that we saw at pre-holiday production levels.”
