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Winnebago Industries, Inc. (NYSE: WGO) released its financial results for the second quarter of fiscal 2025, revealing a mixed performance across its segments. The company reported net revenues of $620.2 million, marking a decline of 11.8% from the previous year’s $703.6 million.
This decrease was primarily attributed to a reduction in the average selling price per unit due to product mix, although targeted price increases helped offset some of the decline. Gross profit also saw a decline, reaching $83.1 million, down 21.1% from $105.3 million the previous year, with a gross profit margin of 13.4%, down by 160 basis points. Despite these challenges, the Marine segment stood out with a notable performance. It achieved net revenues of $81.7 million, a 17.1% increase from the previous year.
The segment’s adjusted EBITDA also rose by 75.7% to $7.7 million, driven by operational efficiencies and targeted price increases. On the other hand, the Motorhome RV segment faced struggles, with net revenues declining by 30.4% to $235.6 million due to lower unit volume. The Towable RV segment saw a modest increase in net revenues to $288.2 million, primarily due to unit volume growth. Operating income for the quarter was $7.8 million, a significant drop from the $35.4 million reported in the same quarter last year. This decrease was influenced by higher selling, general, and administrative expenses, which rose by 8.6% to $69.7 million.
The company also reported a net loss of $0.4 million, or $0.02 per diluted share, although adjusted earnings per diluted share were $0.19. The company completed a $100 million cash tender offer to repurchase Senior Secured Notes, highlighting its commitment to strategic debt reduction and capital efficiency.
Winnebago Reports Q2 FY’25 with Slight Revenue Miss
The second quarter results fell short of expectations, with net revenues of $620.2 million coming in slightly below the anticipated $621.41 million. Adjusted earnings per diluted share were $0.19, surpassing the expected $0.1803, indicating a better-than-expected performance in terms of profitability. Despite the revenue shortfall, the company managed to exceed earnings expectations, showcasing its ability to navigate challenging market conditions.
The Towable RV segment saw a minor increase in net revenues, largely due to unit volume growth. However, the Motorhome RV segment experienced a significant decline in net revenues by 30.4%, primarily driven by lower unit volumes. This was partially offset by favorable product mix. The Marine segment, on the other hand, delivered robust growth, with net revenues increasing by 17.1% and adjusted EBITDA margin improving by 310 basis points to 9.4%. This performance was bolstered by targeted price increases and operational efficiencies.
CEO Michael Happe emphasized the company’s strategic focus on product differentiation and affordability options to maintain market share in core segments. The introduction of new products, such as Grand Design’s Class C Lineage Series M, received positive market reception, highlighting the demand for innovative motorized RVs. The company’s strategic approach aims to capitalize on market opportunities and position itself for sustainable financial performance as the market recovers.
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Winnebago Updates 2025 Fiscal Outlook
Looking ahead, Winnebago Industries updated its fiscal 2025 outlook, projecting sales between $2.8 billion and $3.0 billion. The company anticipates reported earnings per diluted share to range from $2.10 to $3.10, with adjusted earnings per share expected between $2.75 and $3.75.
CEO Michael Happe acknowledged the challenges posed by stubborn interest rates, inconsistent consumer sentiment, and dealer inventory adjustments, particularly in the Motorhome RV and Marine segments. Despite these near-term challenges, the company remains confident in the long-term demand landscape and the growing interest in outdoor lifestyles among consumers.
Happe also addressed the ongoing impact of tariffs and collaborative discussions with vendors to mitigate their effects. The company’s fiscal 2025 outlook takes into account anticipated pricing actions to offset inflationary pressures on input costs. The company’s strong balance sheet and cash flows provide the flexibility to continue investing in growth opportunities while maintaining disciplined fiscal management.
Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.
About the author
Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate on the investment team at RW Baird’s US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.
