Amid economic challenges, Winnebago Industries continues to push forward as revealed in the company’s second-quarter earnings call.
Revenues decreased by 18.8% compared with the 2023 second quarter due to lower product sales and shipments.
High interest rates created an uncertain environment and chassis costs have negatively impacted the motorized segment.
Throughout these challenges, Winnebago President and CEO Michael Happe said, “We performed in line with our expectations during the second quarter of fiscal 2024 and demonstrated resilient profitability.”
Among the company’s growth areas is its supplier negotiations on material pricing. Happe said the company expects to gain pricing benefits from suppliers as it grows.
“Believe me, as we continue to organically and inorganically create scale in this company,” he said, “we will expect that the benefits of that will come from our suppliers as well.”
Happe said the company currently has great relationships with its suppliers, even if it has less leverage to lower prices compared with its two largest competitors.
The manufacturer is charging ahead with Grand Design motorized plans.
Happe said that the segment’s timing remains on track. The section’s plans have been in the works since at least November 2022, he said.
Happe said he anticipated Grand Design motorized deliveries by the end of the 2024 fiscal year, which occurs in August. The majority of the Grand Design motorized segment is expected to deliver between the 2025 and 2027 fiscal years.
Happe said, “We anticipate that Grand Design motorized will also be a financially acceptable and good contributor to that segment yield going forward as well.”
Winnebago said its North American RV market share regressed over the last year and a half. The company’s market share currently is 11.4%.
Happe said, “We actually feel that we fared pretty well considering that we have been in a dramatic environment in terms of, first, hyperinflation and now an affordability challenge within the RV industry.”
According to Happe, while the manufacturer is unsatisfied with the market share, he said the performance is reasonable given the industry environment and Winnebago’s position as a premium-priced manufacturer.
He said within the next three years, Winnebago expects to grow its market share to 13%.
During the quarter, Winnebago focused on dealer inventory. Winnebago Senior Vice President and Chief Financial Officer Bryan Hughes said the manufacturer is introducing incentives to move products off dealer lots. According to Hughes, the company is operating off a unit-by-unit approach.
Happe said at the end of February, Winnebago and Grand Design brands’ model 2023 inventory was around 23% and 24%. The brands’ 2024 inventory was around 75%. Newmar’s model year 2023 inventory was around 23% while 2024 inventory was between 70% and 75%.
Winnebago holds a positive outlook toward the future.
Happe said, “As we move beyond the near-term market dynamics, we remain confident in our ability to grow our business, capture market share and substantially increase our profitability and free cash flow.”
