Patrick Industries CEO Andy Nemeth and President Jeff Rodino said the RV supplier ran record volumes in the first quarter of 2022, driven by automation initiatives taken since 2020.
The executives said Patrick gained about 5.5% in organic market share compared with the first quarter of 2021 and its dealer inventory estimate tracks with inventory at the end of 2019.
“Our estimates indicate TTM (trailing 12-month) dealer inventory weeks on hand at the end of the first quarter are at 18 to 20 weeks, up seven weeks from our estimates at the end of December 2021,” Rodino said. “Inventory levels at the dealers have increased, but they are still below the historical pre-Covid average for the first quarter at 26 to 30 weeks. We estimate that dealer inventories are currently equivalent to the inventory levels we saw at the end of 2019.”
Rodino said production scheduling improved in the quarter as Patrick Industries gained better visibility into its supply chain, ran longer manufacturing runs and gained market share. He said commodities price increases continued, compared with the first quarter of 2021, because of tremendous demand.
The executives said manufacturers began adjusting production levels in April. Rodino said as May begins, the company is seeing “rightsizing” to match retail demand levels.
“We feel pretty good about the OEMs and their attentiveness to what is happening in the market and adjusting production levels appropriately,” he said.
Although retail demand has begun to soften, Nemeth attributed changes to a shift in product mix.
“When you look at the inventories that are out there, there is definitely a preponderance of lower-end towable units,” he said. “Higher end towables/motorized are in demand, heavier demand as it relates to the inventory that is available. And so, we just think there is some mix shift going on, but dealer traffic has been strong.”
Nemeth said Patrick Industries continues to see younger buyers in the market and dealers are in a “very healthy” position before the spring and summer selling season.
