Amid reports of manufacturer shutdowns lasting the month of December and into 2023, Thor Industries released its fiscal first-quarter financial results. The manufacturer said net sales, gross profit margin and earnings were down from the 2022 fiscal first quarter, but up from the 2021 fiscal first quarter.
President and CEO Bob Martin acknowledged the challenging environment while retaining a positive long-term outlook.
“Thor has a proven track record of demonstrating resilience in economic down cycles, and we expect fiscal 2023 results to be no different,” Martin said. “Thor is built to perform in these shifting conditions, with an unparalleled track record within the industry. The current environment is challenging, but it does not diminish the widely shared, long-term optimism for the industry or for Thor. Given that long-term independent dealer sentiment and consumer interest in the RV lifestyle remains positive, we remain confident in our ability to generate long-term value for our customers and shareholders.”
Thor Industries said the current quarter’s focus is slowing manufacturing output.
“Our focus for the second fiscal quarter of 2023 is to slow our production output through reduced production rates and extended holiday shutdowns,” the company said, “to help position our independent dealers well heading into the prime selling season.”
In Thor’s provided question-and-answer document, the manufacturer said dealer towable inventory levels remain at “historical, normalized levels,” while motorized inventory is below historical stocking levels.
Given the pullback in shipments—the industry’s third-quarter RV wholesale shipments were 40% lower than second-quarter RV wholesale shipments, according to RVIA—the comments reflect a “wider-than-normal range of potential retail demand scenarios.”
Thor Industries said in the very near term, the manufacturer expects to more closely align manufacturing to match retail levels to keep inventory at or close to Oct. 31, 2022, levels.
“Historically, the industry has significantly increased dealer inventory levels during our fiscal second quarters ahead of the spring selling season,” the company said. “However, Thor companies continue to manage the business in a disciplined and prudent manner to avoid overproduction.”
Thor Industries highlighted progress in long-term growth initiatives related to automation, supply chain and the RV aftermarket.
“Airxcel has organically invested to expand its operations and will be offering a number of new products in the coming calendar year,” said Todd Woelfer, senior vice president and chief operating officer, “while a key strategic partnership with Harbinger was announced which will further our innovation efforts as we advance our eMobility strategy. We have also made significant steps towards executing our aftermarket strategy and look forward to begin realizing on that strategy this fiscal year.”
The manufacturer said supply-chain issues moderated throughout the 2022 fiscal year, although chassis supply constraints keep motorized inventory levels down. Some input costs have stabilized, Thor Industries said. Additional commodity cost relief is expected, including steel and aluminum prices, the manufacturer said.
“In regard to pricing, we are aware that average selling prices are elevated,” Thor Industries said. “As our input costs decrease, we expect to adjust wholesale shipment pricing, which should offer some relief to our dealer partners and retail customers as we move through fiscal 2023.”