Thor Industries posted the highest net sales and profits in the company’s history during the third fiscal quarter.
Demand for Thor products remains “robust,” with quarterly net sales increasing 105.7% compared with 2020’s third quarter, finishing with $3.46 billion. The year prior, that number was $1.68 billion. In North America’s RV sector alone, net sales grossed $2.5 billion.
“These results show that growth continued unabated after the initial temporary shutdown of our dealers and Thor Industries’ production lines in late March through the end of April of last year due to the pandemic,” Thor President and CEO Bob Martin said. “We have increased our production levels, often with modest capital expenditures, and intend to continue to increase production levels to address the ongoing, robust consumer and dealer demand for Thor Industries RV products, while also managing through continuing supply chain challenges.”
In the company’s North American towables segment, net sales reached $1.73 billion for 2021’s third quarter, compared with $773.4 million recorded the year prior.
“Demand for our products continues to grow at both the retail and wholesale levels,” Martin said. “While our pace of production and shipments has accelerated, demand is so high that independent dealer inventories of Thor Industries products continue to decline, while dealer sales are increasing. This increasing consumer demand has driven our order backlog to more than $14 billion at the end of the quarter and includes units that will be needed to restock depleted dealer inventories.”
Thor’s consolidated RV backlog as of April 30 was $14.32 billion, an increase of nearly 550% from April 30, 2020.
“Since a significant number of units in our backlog have already been retail sold, we currently believe the restocking cycle will extend well into calendar 2022,” said Martin.
Thompson Research Group Analyst Kathryn Thompson said in a note that dealer inventories are perhaps Thor’s most telling metric. Inventories fell 4% from the previous quarter, Thompson said, indicating “retail demand continues to outstrip supply.”
Motorized RVs in the North American sector hit $775.4 million during 2021’s third quarter, compared with last year’s $264 million total.
“Our ability to ramp up production to address the increased demand from our dealers is reflected in our record results,” Thor Senior VP and Chief Financial Officer Colleen Zuhl said. “While we reported excellent results, the supply chain continues to be a constraint for the RV industry and Thor Industries alike, limiting our ability to further increase production to meet increased levels of dealer demand.”
Zuhl noted the company is implementing various supply chain strategies to minimize stated constraints.
“We continue to see robust demand for our RVs and see no signs of demand slowing even as the economy recovers from the pandemic,” Martin said. “We are focused on strategically increasing capacity and maximizing production efficiencies to fulfill the growing demand from our dealers. Ultimately, however, the number of Thor Industries units shipped in both fiscal and calendar 2021 depends on our ability to manage through the ongoing global supply chain issues.”
Margins continued to increase, as Thor stated it benefitted from reduced sales discounts. Gross profit margins rose to 14.6% in the fiscal third quarter, up from 12.2% in 2020’s fiscal third quarter.
The manufacturer did cite rising material costs in the quarter, resulting from higher commodity prices, transportation costs and supply-chain constraints.
“These cost pressures were reflected in our third quarter gross margins, and we expect these costs to remain elevated in the near term,” Thor stated. “When necessary, we have instituted price adjustments to mitigate cost pressures.”
