Winnebago Industries Q4: EPS Beat, 35% Revenue Slump, Pressured Retail Market Dynamics & More

Winnebago Industries Inc WGO reported a Q4 FY23 sales decline of 34.6% Y/Y to $771.0 million, missing the consensus of $784.33 million.

Revenue was impacted by lower unit sales related to current market conditions and, dealer efforts to reduce inventories, and higher discounts and allowances.

Towable RV segment revenue fell 30.9% Y/Y to $341.4 million due to a decline in unit volume related to retail market conditions, a cautious dealer network, and higher discounts and allowance levels.

Motorhome RV revenue was $317.7 million, down 42.8% Y/Y. Revenues for the Marine segment were $96.4 million for the fourth quarter, down 21.0% Y/Y. 

Gross profit fell 39.4% Y/Y to $127.5 million, and gross profit margin contracted 130 basis points Y/Y to 16.5% on volume deleverage and higher discounts and allowances. 

Operating income was down 53.4% Y/Y to $57.5 million in the quarter. 

Adjusted EPS of $1.59 beat the analyst consensus of $1.35.

As of August 26, 2023, Winnebago's cash and equivalents totaled $309.9 million and had a total outstanding debt of $592.4 million and a working capital of $600.7 million.

The company's increased quarterly cash dividend of $0.31 per share was paid on September 27, 2023. Additionally, WGO executed share repurchases of $30 million.

President and Chief Executive Officer Michael Happe said, "We are particularly excited about our latest product releases, especially those introductions in our Towable RV segment - the Winnebago brand Access and M-class, along with the Grand Design Reflection 100 and Influence models. These offerings exemplify the type of innovative new features that our discerning customers have grown accustomed to from our premium brands, while also addressing important concerns around affordability." 

"As we enter Fiscal 2024, we expect the continued pressure of current retail market dynamics, coupled with dealer selectiveness to take on additional inventory amidst retail challenges, through the first half of the Fiscal year. However, we anticipate that as inventory levels further normalize and consumer demand stabilizes, dealers will exhibit a growing willingness to rebuild inventories and bring in additional models as we enter the back half of Fiscal 2024."

Price Action: WGO shares are down 2.83% at $56.94 on the last check Wednesday.