Winnebago Industries Inc. reported sales grew 138.7 percent in the fiscal third quarter ended May 29 and said backlogs remained at record levels due to “exceptional growth” in consumer demand for pursuing the outdoor lifestyle.

“We believe the pandemic not only accelerated existing purchase intent in the recreational vehicle and marine markets these last 15 months, but we are equally convinced there has been, and will be, a meaningful expansion of interest and engagement in the outdoors that will benefit our business and industries for many years,” said Michael Happe, president and CEO, on a conference call with analysts.

He noted that 10.1 million households camped for the first time in 2020, and another estimated 4.3 million households are expected to camp for the first time in 2021. Happe stated, “More new families, more first-time buyers and more diverse customers are getting their taste of what exploring this great country via the open roads and expansive waterways is all about.”

The CEO added that while the rate of first-time buyers would likely decelerate against difficult year-ago comparisons, the “new wave of engaged enthusiasts,” especially among Millennials and younger generations embracing the outdoors, would support growth across the outdoors space going forward.

“Today’s fresh memories for youth, first-time explorers and even veteran outdoor participants will be the foundation for our industry to grow from in the decades ahead,” said Happe. “We are long and bullish on America’s outdoor recreation economy and the place in that ecosystem Winnebago Industries will hold in the future.”

Q3 Sales More Than Double
Revenues for the quarter were $960.7 million, up from $402.5 million for the fiscal 2020 period, and a sequential increase of 14.4 percent over the fiscal 2021 second quarter. Excluding the Newmar acquisition, sales were up 53 percent year-over-year.

Happe said that as of April, the company’s RV fiscal year-to-date market share is 12.5 percent, up 40 basis points for the same period last year.

Gross margins in the latest quarter improved 970 basis points year-over-year, driven primarily by operating leverage, pricing, including lower discounts and allowances, and a favorable segment mix.

Operating income came to $102.4 million compared to a loss of $8.2 million in the year-ago quarter while increasing 2.5 percent sequentially.

Net income in the latest period was $71.3 million, or $2.04 a share, against a net loss of $12.4 million, or 37 cents, a year ago. Adjusted EPS came to $2.12 against a loss of 26 cents.

Adjusted EBITDA was $109.8 million for the quarter, compared to $4.1 million in the year-ago third quarter and $108.0 million in the fiscal 2021 second quarter.

In the Towable segment, revenues reached $555.7 million, up 194.2 percent over the prior-year period and 26.5 percent sequentially, driven by heightened consumer demand for its Grand Design and Winnebago branded products. Segment adjusted EBITDA was $80.1 million, up 387.1 percent over the prior-year period and 28.5 percent over the fiscal 2021 second quarter. The earnings gains were helped by robust operating leverage and lower levels of discounting. Backlog grew 264.9 percent over the prior-year period and 26.1 percent over the fiscal 2021 second quarter due to continued strong consumer demand combined with extremely low dealer inventory levels.

In the Motorhome segment, revenues were $385.3 million, up 89.2 percent from the prior-year period, driven by continued strong consumer demand for both Winnebago and Newmar branded motorhomes. Segment Adjusted EBITDA was $37.5 million compared to a loss of $10.8 million in the same period last year and $51.0 million in the prior quarter. Backlog increased jumped 323.3 percent over the prior-year period and 20.0 percent over the prior quarter, as dealers continue to experience significant reductions in inventories due to extremely high levels of consumer demand.

In the future, Happe said Winnebago remains focused on working with suppliers to sustain strong production levels and with its dealer network to replenish its inventories in the face of record backlog.

“We continue to experience demand-driven supply chain challenges that restrain our operations from reaching full-production capacity and have been facing various waves of inflation pressure as well, in the last six months,” said Happe. “The impact of these supply-based inconsistencies is evident in some of the segment results, but our team is working closely with our supply chain partners to manage through these conditions with flexibility, nimbleness and process discipline as much as possible.”

Photos courtesy Winnebago Grand Design, Newmar