Winnebago Industries Inc.’s sales jumped 40.4 percent and 54.1 percent in the fiscal year ended August 28 as healthy demand for outdoor recreation coming out of the pandemic boosted its RV and boat businesses.

“The pandemic has undoubtedly catalyzed accelerated powerful demand for outdoor experiences, and we believe this secular shift already underway pre-COVID-19 will have a lasting impact as more and more new families experience the great outdoors,” said Michael Happe, president and CEO, on a conference call with analysts.

Happe noted that over 10 million households camped for the first time in 2020 and another estimated 4.3 million households are estimated to have their first camping experience in 2021. He added, “In addition to first-timers, a new wave of engaged enthusiasts, especially millennials and younger generations, are investing more of their time and income in the outdoor lifestyle. To put a finer point on this, even as we saw the easing of pandemic restrictions over the summer creating a possible return to a broader set of vacation and travel leisure options, our performance in the summer selling season was strong, setting revenue records in both our fiscal third quarter and now our fiscal fourth quarter. Our record backlog of orders continues to grow. And we are seeing rapid sell-through of inventory we provide to dealers.”

Quarterly Sales Climb 40.4 Percent
In the quarter ended August 28, revenues jumped 40.4 percent to $$1.0 billion. Sales grew 56.8 percent on an organic basis, excluding the acquisition of Newmar, against the 2019 fiscal fourth quarter. The company’s brands include Winnebago, Grand Design, Chris-Craft, Newmar, and Barletta.

The sales gains were driven by strong end-consumer demand, pricing initiatives across all segments driven by higher material and component costs, and segment and product mix.

Gross margins improved 150 basis points to 18.1 percent in the quarter, driven by fixed cost leverage, increased pricing, including lower discounts and allowances, and profitability initiatives. Operating income improved 75.4 percent to $120.0 million.

Net income vaulted 98.0 percent to $84.1 million, or $2.45. Adjusted EPS jumped 77.2 percent to $2.57, easily topping Wall Street’s consensus estimate of $1.98. Consolidated adjusted EBITDA improved 68.6 percent to $129.0 million.

In the fiscal year, revenues reached $3.6 billion, up 54.1 percent. Operating income more than tripled to $407.4 million from $113.8 million a year ago. Net income was $281.9 million, a year-over-year hike of 358.8 percent compared to $61.4 million in fiscal 2020. Adjusted EPS was $8.55 against $2.58 in the same period last year. Adjusted EBITDA was $436.1 million, an increase of 159.4 percent year over year.

Backlogs Up Triple-Digits
Among its core RV segments, Towable sales totaled $560.0 million for the fourth quarter, up 35.3 percent over the prior year, primarily driven by unit growth due to the strong end consumer demand and increased pricing across the segment. Adjusted EBITDA margin of 14.9 percent increased 10 basis points over the prior-year period and 50 basis points sequentially. Towable backlogs increased to a record $1.7 billion, up 127.9 percent over the prior year and 12.0 percent sequentially, due to continued strong consumer demand combined with extremely low levels of dealer inventory.

In the Motorhome segment, sales reached $448.9 million in the quarter, up 48.7 percent from the prior year, driven by an increase in Class B and Class A unit sales, and pricing across the segment. Segment adjusted EBITDA margin of 11.2 percent increased 480 basis points over the prior year and 150 basis points sequentially, driven by leverage and profitability initiatives. Backlog increased to a record $2.3 billion, an increase of 119.1 percent over the prior year and 5.7 percent sequentially.

At the close of August, Winnebago completed its acquisition of Barletta Pontoon Boats for $255 million in cash and shares. The company entered the boating business with its 2018 acquisition of Chris-Craft and now plans to create a new marine reporting segment. Happe called Barletta “the fastest-growing brand in the fastest-growing segment of the marine category in pontoons.”

He added, “We’re bullish on the broader recreation economy and investing to expand our reach beyond RVs, in line with our strategy to become a premier outdoor lifestyle company.”

Looking ahead, Happe said “unprecedented interest” in the company’s products and a bullish industry outlook “has provided us with a very bright outlook” for fiscal 2022. He said, “Consumer interest in the outdoors remains strong. Campground reservations are just one metric that remains robust due to more households camping and camping more frequently.”

Traffic to Winnagebo’s brand website “is as strong as ever” and dealers continue to report “steady interest in the outdoor lifestyles of RV and boating.”

Happe said as new households experience the outdoors, dealers are already seeing an upgrade cycle take place. He stated, “Yes, some new customers from 2020 are trading out of the lifestyle, which is not at all historically unusual, but our broad dealer conversations across all RV brands indicate dealers are also seeing a higher accelerated pace of users trading up, a trend that favors our premium brands as we tend to outperform the broader market when consumers upgrade.

Happe added, “Long term we believe the number of new customers who came into the outdoor lifestyle in 2021 and 2020 will bode well for the industry. And we’re particularly excited about the number of kids who experienced RVing and boating as those experiences have been proven to translate into a love of the outdoors throughout their future lifetimes.”

Photo courtesy Winnebago