Navigating Mixed Terrain: REV Group Reports Slight Sales Growth In Q1, Adjusts Forecast Amid Market Shifts

REV Group, Inc. REVG reported first-quarter fiscal 2024 slight sales growth of 0.43% year-over-year to $586 million, beating the consensus of $579.42 million. 

The increase in consolidated net sales was primarily due to higher net sales, including price realization, within the Specialty Vehicles segment, partially offset by lower net sales in the Recreational Vehicles segment.

The company, which manufactures specialty vehicles and related aftermarket parts and services, reported an Adjusted EPS of $0.25, up from $0.12 a year ago, beating the consensus of $0.15.

Gross profit soared 8.6% to $62.9 million, and the margin expanded by 81 bps to 10.7%. Adjusted EBITDA was $30.5 million compared to $21.3 million in the prior year quarter.

The company’s backlog increased to $4.24 billion at the end of the quarter, compared with $4.16 billion a year ago.

Dividend: The company declared a quarterly cash dividend of $0.05 per share of common stock, payable on April 12, 2024, to shareholders of record on March 28, 2024.

REVG’s net cash used in operating activities for the quarter stood at $(69.7) million, compared to $(6.9) million used a year ago. REV Group’s cash and equivalents totaled $87.9 million as of January 31, 2024.

REV Group had $534.1 million available under its ABL revolving credit facility as of January 31, 2024.

“We believe our first quarter’s results provide a solid foundation for delivering on our updated guidance and positions us for continued growth throughout the year,” commented REV Group President and CEO Mark Skonieczny.

2024 Outlook: REV Group expects net sales of $2.45 billion-$2.55 billion versus the consensus of $2.61 billion. 

While announcing its fourth-quarter fiscal year 2023 results, the company expected net sales of $2.6 billion-$2.7 billion. It recast the range to $2.45 billion-$2.55 billion to remove the results of Collins after the sale, as previously disclosed in the investor presentation dated January 31, 2024.

The company sees an adjusted net income of $72 million-$90 million (prior view $82 million-$99 million).

Price Action: REVG shares are trading lower by 3.81% at 19.97 on the last check on Wednesday.