Winnebago Industries President and CEO Michael Happe said the manufacturer is keeping a close eye on production levels to avoid overbuilding.
Answering an analyst’s question about concern over repeating 2018 overbuilding levels, Happe said Winnebago will continue to match production levels with confirmed dealer orders.
“This enterprise-wide mandate at Winnebago Industries is imperative within our business model and is especially important as the industry works to replenish, but not overdrive, dealer inventory levels,” he said.
Happe and Chief Financial Officer Bryan Hughes cited ongoing supply-chain challenges in the company’s fiscal second quarter. Parts shortages in particular affected motorized products.
“We will continue to work closely with our suppliers to mitigate issues as much as possible and provide our dealer partners with quality units to replenish their inventories,” Happe said. “We anticipate industry towable inventories to recover to a new normal first and mid-2022, followed by motorized later this calendar year and for some brands into 2023, especially our Newmar brand.”
Towable replenishment is happening faster than many believed six months ago, Happe said, crediting key suppliers in the category for getting enough product to OEMs to work through backlogs.
On the motorized side, the CEO said chassis remain a challenge but portable power generators were the key second-quarter category challenging motorized manufacturing.
Winnebago was able to increase pricing in the fiscal second quarter to offset component and material inflation, Happe said.
“We began taking pricing actions ahead of inflation in the second quarter of last year,” he said. “As the spring selling season gets underway, we will continue to evaluate our pricing power as needed as a lever to offset higher materials and component costs, while still balancing and driving market share gains.”
Dealers are seeking inventory levels to generate elevated turns, Happe said, rather than historical turn times, to bring in higher profits.
“We are seeing dealers take a fresh look at their orders to OEMs,” he said. “We will take care of our own house and continue to make sure that every unit of production has either a retail customer’s name on it or a dealer customer’s name on it and continue to only make to what we believe are confirmed orders in our system. But as of this time, we think the marketplace is rational, and we will continue to see the return to a new normal of inventory can land in an appropriate manner.”
