Thor Industries said Wednesday the company’s 2024 fiscal first quarter resulted in profits even as sales fell nearly 20% from 2023’s fiscal first quarter.
Mirroring its 2022 plans, the company said it again will reduce manufacturing rates by extending holiday shutdowns in its fiscal second quarter—running from Nov. 1 through Jan. 31—to align shipments with current retail sales.
Thor President and CEO Bob Martin said, “We are pleased with our performance to start fiscal 2024, as the fiscal first quarter played out largely as expected. As anticipated, independent dealer destocking efforts in North America and seasonally lower first-quarter production within our European segment impacted our unit shipment volumes during the quarter. Despite this, our fiscal 2024 first quarter financial performance demonstrates the collective efforts of our operating companies to prioritize profitability in a soft demand environment.”
Fiscal first-quarter sales totaled $2.5 billion. Profits totaled $53.6 million.
Todd Woelfer, Thor’s senior vice president and chief operating officer, said lower manufacturing levels in the fiscal first quarter resulted in 3,700 RVs destocked from dealer inventory.
“At the same time,” Woelfer said, “our teams continued to employ targeted promotional strategies in order to drive retail sales while also introducing our value-enhancing model year 2024 product offerings.”
In a Q&A connected to the financial results release, Thor Industries said towable RVs’ average wholesale price fell in the low double digits from the fourth quarter of fiscal 2023. Motorized RVs saw “more modest decreases” in average wholesale prices from the fourth quarter of fiscal 2023 and the first quarter of fiscal 2023.
“The current North American dealer outlook continues to be cautious,” Thor Industries said. “Given a slower retail environment in calendar 2023 and rising floorplan costs associated with higher interest rates, our independent dealers are taking a more conservative approach to inventory management entering the winter months. While we currently believe North American dealer inventory positions are, on balance, relatively healthy and fresh, dealers are still expected to remain hesitant to hold excess inventory ahead of the calendar 2024 retail show and selling season with a continued focus on rightsizing prior model year inventory levels during the seasonally slower months.”
The manufacturer also addressed a question about Airxcel’s new product releases announced in October. The company said product-line extensions and new product/brand introductions positioned Airxcel to gain business with Thor and non-Thor OEMs.
“The feedback was very positive, with daily OEM prototyping discussions taking place since the showcase,” Thor Industries said. “As a result, we are encouraged by Airxcel’s growth prospects moving forward. At the same time, we will maintain strong relationships with each of our existing key suppliers as we continue to collaborate on the development of new products, dual-source components and build a resilient industry supply chain in an effort to drive positive outcomes for our core OEM businesses.”
Martin summed up the financial results by saying Thor Industries proved able to maintain profitability in challenging economic conditions.
“Despite continued mixed economic data and uncertainty on the macroeconomic level,” Martin said, “our fiscal first quarter results demonstrate the strength of our business model and resilience of our operating companies in navigating the current environment. We continue to work closely with our independent dealer partners to monitor retail trends and adjust production accordingly to ensure channel inventory remains appropriate during the retail offseason months.”
