Winnebago Industries experienced a “fantastic” fiscal 2021 first quarter, the company’s CEO Michael Happe stated, with a strong start to what he expects will be a “remarkable” fiscal year.
Happe cited market share gained, an operating income that increased 256 percent, expanded gross margins and the company’s consolidated top line growing 35 percent in its quarterly financial review.
Winnebago’s VP and Chief Financial Officer Bryan Hughes noted a 10.9 percent unit market share in North America, up 0.8 percent. The findings represent a yearly comparison on a trailing three-month basis that runs through October.
“In our fiscal 2021, we believe industry retail will grow in the mid-single digits,” Happe said, according to an analyst conference call transcript provided by Seeking Alpha. “And while industry wholesale shipments will grow approximately 30 percent, note that our fiscal industry wholesale shipment projection considers and aligns with the RVIA calendar year 2021 industry forecast of approximately 20-plus percent.”
Winnebago supports the RVIA’s forecast, Happe said, although he said the company believes it could be increasingly conservative as retail trends continue at heightened levels and the supply chain raises output.
As of October 2020, the company’s consolidated RV market share was 12 percent. That was up 1.2 percent from a year earlier, with organic growth totaling 0.7 percent of the total, Happe said.
“Drivers of this continued growth includes our towable segment, driven by our Grand Design RV fifth wheel and travel trailer products, our extensive Class B Winnebago-branded motorhome lineup and the Newmar Class A motorhome products,” Happe said, according to the Seeking Alpha transcript.
Retail momentum is expected to remain strong as consumers continue to purchase RVs, Happe noted.
“We feel much better about the supply chain and the ability of the supply chain to keep up with our future manufacturing forecast and production schedules,” Happe said. “So yes, our field inventory is still low. We work on that every day with our dealers to try to prioritize and make sure the product is going to the right place. But we continue to increase output to try to address that for the rest of fiscal 2021.”
The biggest issue preventing Winnebago from restocking the supply channel at preferable levels is retail activity, Happe stated.
“Our retail results in early December here are quite positive,” Happe stated. “We really can’t tell specifically how many of the orders our dealers have placed with us are pre-sold in all of our businesses. We do believe that a number of dealers have retail orders in hand and they are simply waiting for delivery of those products when they hit their lots for those consumers. I think that’s our probably biggest headwind to building back the dealer inventory is ultimately trying to get that wholesale shipment number to keep exceeding retail at a consistent clip.”
Dealers continue to see strong traffic, he added, even as winter settles in. Happe noted the company’s desire to earn dealership business in a way that is profitable to them in return.
“Our teams have been working quite hard on the Winnebago towable side, to both upgrade the dealer network, but also expand into some of the open markets that that business had not yet filled with high quality dealers,” Happe stated “… So, by and large, we believe our dealer relationships are healthy across their businesses. We can always improve. They will always give us a list of things we can work on, and our teams are very, very focused on making sure that those relationships are mutually beneficial.”
