Shares of Winnebago Industries Inc. (WGO) were indicated down nearly 2% in premarket trading on Wednesday. The recreational vehicle maker beat fourth-quarter profit expectations but disappointed on revenue. Additionally, the company expects continuing pressure on the retail market.
Financial Performance
In the quarter ending August 26, the company’s net income declined to $43.8 million, or $1.28 per share, compared to $82.6 million, or $2.61 per share, in the same period last year. After excluding nonrecurring items, the adjusted earnings per share were $1.59, surpassing the FactSet consensus of $1.36.
However, revenue dropped significantly by 34.6% to $771.0 million, falling below the FactSet consensus of $784.3 million. While towable revenue exceeded expectations, motorhome and marine revenue missed their targets.
Challenging Retail Environment
Chief Executive Michael Happe acknowledged that the consumer market “continues to be challenged.” Happe believes that the fourth-quarter results highlight the difficulties faced in the “stubborn retail environment.” Looking ahead to fiscal 2024, Happe expects the current retail market dynamics to persist during the first half of the year. He anticipates continued pressure on the industry, compounded by dealer selectiveness in taking on additional inventory.
Stabilization in Consumer Demand
Despite these challenges, Happe remains optimistic that consumer demand will stabilize in the second half of the fiscal year.
Market Performance
Over the past three months, Winnebago Industries Inc.’s stock has experienced a decline of 12.2%. In comparison, the S&P 500 has lost 4%.
