Winnebago's profit rises, driven by rebounding RV demand
By James B. Kelleher
CHICAGO (Reuters) - Winnebago Industries Inc, the No. 1 U.S. motor-home manufacturer, reported a stronger-than-expected quarterly profit on Thursday and said its backlog continued to grow due to rebounding demand from both dealers and consumers.
The news sent its shares up more than 3 percent in mid-morning trading on the New York Stock Exchange.
The company, small but closely watched because of the view it provides on spending on big-ticket discretionary items, said its sales order backlog for its products - which range in price from about $65,000 (40,205.36 pounds) to more than $300,000 - grew for the sixth consecutive quarter, reflecting consumer and dealer optimism about the economic recovery.
During a conference call to discuss the results, Randy Potts, the company's chairman, chief executive and president, said the rebound in consumer and dealer confidence was creating "a great environment for growth" and he was upbeat about the outlook for the coming year.
Potts said that over the past three years, as the RV market has rebounded, Winnebago executives had pointedly stressed that they were "cautiously optimistic" that the recovery was sustainable.
"Based on the results of fiscal '13 and the outlook for the future, we're ready to drop 'cautiously,'" he said.
Winnebago reported a profit of $10.6 million, or 38 cents a share, for the fourth quarter that ended on August 31, compared with $40.9 million, or $1.41 a share a year earlier.
Analysts on average expected earnings of 28 cents a share, according to Thomson Reuters I/B/E/S. Excluding a year-earlier noncash tax item, Winnebago's profit more than doubled from 14 cents a share.
Sales rose 32 percent to $214.2 million, while analysts had forecast $208 million.
Winnebago is the latest RV maker to report strong growth in consumer and dealer demand for motor homes.
Last month, Elkhart, Indiana-based rival Thor Industries Inc, which makes RVs sold under the Thor, Airstream, Heartland and Dutchmen brand names, reported a 35 percent increase in fourth-quarter profit on a 19 percent increase in overall sales.
Analysts say both Thor and Winnebago have benefited from the RV industry's shakeout that followed in the wake of the economic downturn, which has left fewer manufacturers in the space and the top three accounting for nearly 80 percent of all sales.
Industry shipments to dealers, which peaked at 71,800 motor homes in 2004, tumbled to just 13,200 motorhomes in 2009, according to the Recreational Vehicle Industry Association (RVIA) trade group. That sent several manufacturers into bankruptcy.
RVIA expects manufacturers to ship 37,100 units in 2013, up 32 percent from 2012.
Potts was asked on the conference call if dealers had reported any drop-off in showroom traffic in recent weeks as a result of the uncertainty created by the 16-day government shutdown, which ended overnight.
"The answer is 'No,'" he said.
Winnebago shares gained 92 cents, or about 3.4 percent, to $28.20 on the New York Stock Exchange.
(Reporting by James B. Kelleher; Editing by Lisa Von Ahn and Maureen Bavdek)
