Higher interest rates and concerns over an economic slowdown or recession my affect consumer demand for recreational vehicles over the next few quarters, but Winnebago remains confident in long-term trends spurred by the pandemic.
"Engagement in the outdoors continues to be extremely healthy in 2023," said Mike Happe, Winnebago's chief executive, during the Eden Prairie-based company's second quarter earnings conference call.
Winnebago was expecting its second quarter financials to decline from the pandemic-driven record results that it posted a year ago. Results did decline, but they beat the revenue and earnings expectations of analysts.
Net income for the quarter ended Feb. 25 was $52.8 million, down 42% from the $91.2 million in the year ago quarter. Revenue decreased 26% to $866.7 million. Adjusted earnings per share of $1.88 decreased 40%.
Analysts were expecting adjusted EPS of $1.25 a share on revenue of $793.5 million.
Winnebago has worked on operational efficiency and to diversify its portfolio of products and brands under Happe. He pointed to those efforts — including growth of the company's boat unit — in helping the company manage through the expected decreased demand after the pandemic had created a surge of interest in RV and outdoor lifestyles.
"Winnebago Industries' second quarter results continue to demonstrate the resilience of our diversified portfolio of premium brands," Happe said in a news release. "Another strong quarter of performance in our Marine segment helped to offset a softening in consumer demand for RVs from recent cyclical highs."
The marine segment saw revenue increase 16% to $112.9 million, helped by price increases and led by growth in its Barletta aluminum pontoon boats business.
The motorhome segment held up well with revenue down 3% to $403.8 million. The biggest sales decrease was in the company's towable RV segment, with revenue down 47% to $342.5 million.
Winnebago's second quarter results benefited from price increases in early 2022, but the company said it has slowed its price hikes. Unit sales decreased across the portfolio with the exception of a 9% increase in the number of Class C motorhomes sold.
With the decreased demand consumers shopping for RVs and boats now are starting to see more promotional pricing at the dealer level when there was virtually none during the peak demand periods in 2020 and 2021.
Shares of Winnebago closed Wednesday at $57.27 a share, down 1.7%.