Thor Industries, Inc. posted consolidated net sales of $2.35 billion in the second quarter of fiscal 2023, which ended January 31, a 39.4 percent decline compared to $3.88 billion in the second quarter of fiscal 2022 and a 14 percent decline from the $2.73 billion in revenues in the second quarter of fiscal 2021.
Consolidated gross profit margin for the second quarter was 12.1 percent of sales, a decrease of 530 basis points when compared to the second quarter of fiscal year 2022 and a 330 basis point decrease when compared to the second quarter of fiscal year 2021.
Net income attributable to Thor Industries and diluted earnings per share for the second quarter of fiscal 2023 were $27.1 million and 50 cents a share, respectively, compared to $266.6 million and $4.79 a share, respectively, for the prior-year period and $132.5 million and $2.38, respectively, for the second quarter of fiscal 2021.
North American Towable RV
North American Towable RV net sales were down 58.2 percent for the second quarter of fiscal 2023 compared to the prior-year period. The decrease was driven primarily by a 64.6 percent decrease in unit shipments, partially offset by net selling price increases and a change in product mix. The decrease in unit shipments is primarily due to a softening in current dealer and consumer demand in comparison with the unusually strong second-quarter demand in the prior-year quarter, which included independent dealers restocking their lot inventory levels.
North American Towable RV gross profit margin was 6.4 percent of sales for the second quarter of fiscal 2023, compared to 19.0 percent in the prior-year period. The decrease in gross profit margin for the second quarter was primarily driven by higher manufacturing overhead costs as a percentage of sales due to the reduction in sales and an increase in sales discounts. Warranty costs as a percentage of sales also increased.
North American Towable RV loss before income tax for the second quarter of fiscal 2023 was $7.1 million, compared to income before income tax of $275.9 million in the second quarter last year, driven by the decrease in North American Towable net sales and the decline in the gross margin percentage.
North American Motorized RV
North American Motorized RV net sales decreased 24.4 percent for the second quarter of fiscal 2023 compared to the prior-year period. The decrease was driven primarily by a 26.3 percent decrease in unit shipments, partially offset by net selling price increases and a change in product mix.
North American Motorized RV gross profit margin was 14.5 percent for the second quarter of fiscal 2023, compared to 16.0 percent in the prior-year period. The decrease in gross profit margin for the second quarter was primarily driven by an increase in overhead costs as a percentage of sales and higher warranty costs.
North American Motorized RV income before income tax for the second quarter of fiscal 2023 decreased to $61.5 million compared to $104.0 million a year ago, driven by the decrease in North American Motorized net sales.
European RV
European RV net sales decreased 10.6 percent for the second quarter of fiscal 2023 compared to the prior-year period, driven by a 15.3 percent decrease in unit shipments due primarily to continuing chassis supply constraints. The decrease due to the foreign exchange rate decline of 7.1 percent was more than offset by net selling price increases and product mix changes.
European RV gross profit margin was 14.1 percent of net sales for the second quarter compared to 12.5 percent in the prior-year period. This improvement in gross profit margin for the quarter was primarily driven by net selling price increases, product mix changes and improved warranty costs, partially offset by an increase in overhead costs as a percentage of sales.
European RV income before income tax for the second quarter of fiscal 2023 was $12.0 million, compared to net income before income tax of $9.7 million during the second quarter of fiscal 2022. The improvement in income before income taxes was primarily driven by the improvement in the gross margin percentage, partially offset by the decrease in European RV net sales.
“Our fiscal second quarter presented a challenging market environment. Against this backdrop, our financial results and actions are a testament to our ability to operate in such a dynamic and challenging environment,” said Bob Martin, president and CEO of Thor Industries. “Our resilient second quarter performance demonstrates the strength of Thor’s diverse product offering, the experience of our management teams and the success of our variable cost model. Despite the challenging quarter, Thor generated positive cash flow and maintained an already strong liquidity profile, positioning Thor to operate from a position of financial strength as we move beyond our second quarter.”
Outlook
“While macroeconomic uncertainties continue to exist in the segments and geographies we serve, we have high confidence in our operating teams, flexible business model and execution strategy. Our first half of fiscal 2023 performance reinforces our discipline to remain focused on what we can control. Looking ahead to the second half of fiscal 2023, we intend to maintain that same discipline to navigate this challenging near-term environment while positioning THOR to be an even stronger company when the market recovers,” added Martin.
Fiscal 2023 Guidance
While positive sentiment and strong underlying interest for the RV lifestyle remain undeterred, we expect near-term demand will continue to be influenced by current macroeconomic conditions. Given the impact of the softer market during our second quarter and our expectation that macroeconomic pressures will persist through the balance of our fiscal year, we are revising our full-year guidance. Our revised guidance anticipates that higher interest rates, elevated prices, and a full North American dealer inventory will result in slower product pull-through for the balance of our fiscal year. Nevertheless, our teams have consistently responded to dynamic market conditions as we aim to optimize our business to expected demand conditions. Our teams are executing at a high level, and we are well-positioned to deliver on our revised fiscal 2023 outlook.
For fiscal 2023, the company’s updated full-year guidance now includes:
- Consolidated net sales in the range of $10.5 billion to $11.5 billion (previously $11.5 billion to $12.5 billion);
- Consolidated gross profit margin in the range of 13.4 percent to 14.2 percent (previously 14.2 percent to 14.9 percent); and
- Diluted earnings per share in the range of $5.50 to $6.50 (previously $7.40 to $8.70 a share).