The board of directors of Thor Industries, Inc. authorized the repurchase of up to $250 million of the company’s stock. The repurchase authorization will expire Dec. 21, 2024.
Bob Martin, Thor Industries president and CEO, said the company’s earnings growth enabled the buyback authorization.
“We believe there is a material misalignment between our value and our stock price,” Martin said. “Given our favorable outlook on the industry and in our business, there is no better investment opportunity for Thor than its own shares at the current market price. Our business has historically generated strong cash flow, and as we continue to implement our balanced, long-term capital allocation plan, share buybacks are an additional, important tool for us to enhance shareholder value.”
Thor’s shares began 2021 at $93.80 a share, rising as high as $152.20 before settling below $100 a share in December.
Martin said the company intends to incorporate share repurchases into its permanent capital allocation strategy, including paying down acquisition-related debt.
Thor Senior Vice President and CFO Colleen Zuhl said the company invested $129 million into capital expenditures during fiscal year 2021. The expenditures are designed to grow the business and drive future efficiencies and margin expansion.
“We also returned $91 million in capital to our shareholders through dividend payments in the fiscal year,” Zuhl said. “As we contemplate future share repurchases, we will evaluate the potential investment as we would an investment in organic growth or acquisition: choosing the option that has the potential to generate the best return on invested capital. Given the current stock price, we believe Thor shares represent the best risk-adjusted returns for our cash.”
