Winnebago Industries posted profits in its fiscal second quarter, finishing the three months ending Feb. 25, 2023, with $52.8 million in quarterly profits. The profit total was down 42% from the fiscal second quarter of 2022.
Company Chief Financial Officer Bryan Hughes took time to address the company’s observations after two large banks failed within the past two weeks.
“Our own banking relationships are with institutions that are believed to be sound,” Hughes said. “We likewise have been monitoring the situation closely and to this point, are not aware of key suppliers or dealers that have been exposed to the bank failures, nor are we hearing of situations that would impact the availability of credit at the wholesale or retail level.”
The fiscal second quarter saw a significant dip in towable revenues, down 47% from the fiscal second quarter of 2022. However, motorized quarterly revenues fell only 3.3% from the previous year as a Mercedes-Benz recall fix was provided earlier than expected to OEMs.
“The Mercedes-Benz recall remedy was implemented earlier than we had anticipated,” Hughes said, “and the impact, therefore had a smaller impact to the second quarter than what we had anticipated and communicated at our prior earnings release.”
Although towable revenue was lower than 2022, Hughes said revenues were 36.6% higher than 2019’s fiscal second quarter and 20.8% higher than 2020’s fiscal second quarter.
“We are confident the long-tail impact of our record growth period will continue to propel Winnebago Industries for years to come,” Hughes said, “even as the environment normalizes and sets up tough year-over-year comparisons.”
Company President and CEO Mike Happe said Winnebago was working closely with dealers to maintain appropriate inventory levels and product mix. He said the amount of 2022 model year RVs still on dealers’ lots was “not unhealthy,” although the total is heavier in some places than the company would like.
Happe said Winnebago would not introduce 2024 model year RVs until late summer, although the manufacturer would start discussing 2024 models with dealers earlier.
“Our model year ’24 timing is still a little way off,” he said, “which is good because it gives us some more time to allow the dealers to focus on that model year ’22 and ’23 inventory.”
Motorized RVs increased shipments in the fiscal second quarter. Happe credited Newmar for providing a better production cadence to refill dealers lots. He said Winnebago brand Type C motorhomes have seen “some nice retail momentum,” particularly with the Ekko, View and Navion models.
“That has allowed us to ship some more inventory to the dealers behind those strong retail sales,” he said, “in order to make sure that they continue to have enough on those particular brands.”
Backlogs in towable and motorized RVs dropped significantly from levels in 2022’s fiscal second quarter. The towable backlog fell 85.1% and motorized backlog dropped 60.6%. Happe said some of the decline was attributable to dealer order cancellations.
“We had produced units that the dealers had ordered from us that they subsequently canceled,” Happe said. “When that happens and we end up with open inventory on our lots, we will work in a careful, intentional and smart way to place that in the field. … A unit has a significantly better chance of retailing when it is on a dealer lot than if it is on a manufacturer’s lot, and so in Q2, you certainly saw us deal with some of that open inventory.”
