The Stock of Winnebago Falls After A Huge Revenue Miss Amid Weak Motor-Home Sales

Winnebago Industries Inc. experienced a decline in its stock value on Wednesday, following the release of its fiscal third-quarter financial results. The recreational-vehicle manufacturer reported a net profit for the quarter ending on May 27 of $59.1 million, or $1.71 per share, representing less than half of the previous year's earnings of $117.2 million, or $3.57 per share.

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Adjusted earnings per share, excluding nonrecurring items, also decreased from $4.13 to $2.13, although it exceeded the FactSet consensus of $1.78. Additionally, the company's revenue dropped by 38.2% to $900.8 million, which was below the projected figure of $977.1 million. This marked the end of a 15-quarter streak of surpassing revenue expectations.

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Winnebago attributed the decline in revenue to lower unit sales caused by unfavorable RV retail market conditions and increased discounts, partially offset by price increases. The company's stock, trading under the symbol WGO, experienced a 3.3% slump during morning trading, continuing a four-day losing streak that began after reaching a four-month high of $66.91 on June 13. The stock has dropped 7.2% during this period.

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Among Winnebago's business segments, Towable RV revenue saw a significant decline of 52.3% to $384.1 million, slightly below the FactSet consensus of $386.5 million. Motorhome RV revenue also fell by 27.5% to $374.4 million, significantly missing expectations of $457.7 million. Conversely, Marine revenue experienced a modest increase of 1.9% to $129 million but fell short of the projected figure of $134.8 million.

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The company's gross margin contracted from 18.7% to 16.8% as cost of sales decreased at a slower rate than revenue.

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Chief Executive Officer Michael Happe addressed the results by stating that Winnebago will proactively manage production levels across its business to align with dealer demand, seasonal retail conditions, and the company's market-share goals.

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Despite the recent decline, Winnebago's stock has performed well, with a year-to-date rally of 17.8%, outpacing the S&P 500's 13.9% increase.

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