Why Outdoor Lifestyle Product Manufacturer Winnebago Shares Are Falling Today

Winnebago Industries, Inc. WGO reported a Q1 FY24 sales decline of 19.9% Y/Y to $763 million, beating the consensus of $723.82 million.

Revenue was impacted by lower unit sales related to market conditions, product mix, and higher discounts and allowances compared to the prior year.

Revenues for the Towable RV segment were $330.8 million in Q1, down 4.8% Y/Y, primarily driven by a reduction in average selling price per unit related to product mix and targeted price reductions.

Revenues for the Motorhome RV segment were $334.4 million, down 28.0% from the prior year, primarily driven by a decline in unit volume related to market conditions and higher levels of discounts and allowances.

Revenues for the Marine segment were $87.3 million, down 33.5% from the prior year.

Related: Winnebago Gears Up For Q1 Print; Here's A Look At Recent Price Target Changes By The Most Accurate Analysts

Gross profit for Q1 was $115.8 million, a decrease of 27.8% Y/Y. Gross profit margin decreased 160 basis points from the prior year to 15.2%, primarily due to volume deleverage and higher discounts and allowances.

Operating income was $39.1 million in Q1, a decrease of 54.5% Y/Y. Adjusted EPS of $1.06 missed the analyst consensus of $1.17.

As of November 25, 2023, the company had a total outstanding debt of $593.1 million, cash flow used in operations was $(21.4) million.

The company said it returned $50 million to shareholders through share repurchases and dividends while further investing in innovation, digital assets, and IT capabilities.

"We remain optimistic that the current cycle of RV dealer destocking is approaching its conclusion, and that market conditions in both retail and wholesale could begin to see improvement in mid to late calendar year 2024," President and Chief Executive Officer Michael Happe said.

Price Action: WGO shares are trading lower by 1.72% to $73.85 on the last check Wednesday. 

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