Rev Group Signals Margin Growth Ahead

A stock photo of all the specialty vehicles made by Rev Group on an asphalt area with mountains in the background

Rev Group signaled the company expects margins to grow the remainder of its fiscal year in its latest financial report.

The Wisconsin-based motorhome manufacturer raised its guidance for fiscal 2021. Although it kept net sales in the same range, $2.45 billion to $2.6 billion, it drastically increased profit expectations. Previously, Rev Group expected profits to be $38 million to $52 million in fiscal 2021. Now it expects profits to be at least $52 million and as much as $68 million.

The company stated its recreation segment posted net sales of $237.9 million in the second quarter, up 19% from the same quarter in 2019. The total was up 108.7% from the second quarter of 2020 because of shutdowns during the period.

Profits in the segment totaled $21.6 million. The company attributed rising profits to increase sales volume and “strong price realizations.” Rev Group stated it lowered discounting in the segment, lowered operating expenses and improved productivity. The result was wider margins, leading to increased profits.

The company stated the improvements happened despite lingering production and supply chain disruptions.

“While we will likely continue to experience and need to actively manage through supply chain and labor constraints in the second half of the year,” REV Group Inc. President and CEO Rod Rushing said, the company’s backlog continued to grow. Company-wide, backlog totaled $2.3 billion, with a $940.5 million backlog in the recreation segment.

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