REV Clocks 18% Revenue Growth In Q2 Amid Macro Headwinds

REV Group, Inc. REVG reported a second-quarter FY23 sales growth of 18.2% year-over-year to $681.2 million, beating the consensus of $580.46 million.

Adjusted EPS of $0.35 beat the consensus of $0.18.

The gross margin expanded by 221 bps to 12.11%. Net income for Q2 was $14.2 million, compared to a net loss of $2.3 million in the prior year quarter. Adjusted EBITDA of $41.9 million jumped 76.1% Y/Y.

The company's backlog increased to $3.85 billion at the end of the quarter, compared with $3.62 billion a year ago. It held cash and equivalents of $9 million, with net debt of $221 million.

REV Group had $305.5 million available under its ABL revolving credit facility as of April 31.

Several businesses in the F&E and commercial segments "improved their operational consistency with increased starts and completions resulting in improved net sales," REV Group CEO Mark Skonieczny said.

Dividend: REV Group declared a quarterly cash dividend in the amount of $0.05 per share of common stock, payable on July 14, 2023, to shareholders of record on June 30, 2023.

FY23 Outlook: REV Group increased its FY23 outlook. The company sees FY23 sales in the range of $2.45 billion to $2.55 billion, compared with previous guidance of $2.30 billion to $2.50 billion. The street view is at $2.41 billion.

Buyback Program: On June 1, REV Group's board of directors approved the repurchase of up to $175 million of the company's outstanding common stock, effective immediately. This new authorization replaces the previous $150 million repurchase program.

Price Action: REVG shares are trading higher by 13.45% to $13.34 in the premarket session on the last check Thursday.