It has been about a month since the last earnings report for Thor Industries (THO). Shares have lost about 9.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Thor Industries due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Thor reported earnings of 26 cents per share for the first quarter of fiscal 2025 (ended Oct. 31, 2024), which missed the Zacks Consensus Estimate of 67 cents. The bottom line fell from 99 cents per share reported in the corresponding quarter of fiscal 2024.
The company registered revenues of $2.14 billion for the fiscal first quarter, missing the Zacks Consensus Estimate of $2.25 billion. The top line declined 14.3% year over year.
North American Towable RVs: Revenues from the segment came in at $898.8 million, down 4.9% year over year due to a decline in net price per unit. The figure, however, beat our estimate of $773.6 million.
Gross profit totaled $112.4 million, down 4.7% year over year. The pretax income totaled $46.8 million, down from $49.2 million recorded in the year-ago period, primarily due to a decrease in net sales. The unit’s total backlog was $933.1 million at the quarter's end, up from $795.8 million as of Oct. 31, 2023.
North American Motorized RVs: Revenues from the segment totaled $505.2 million, which fell 29% year over year, owing to a decrease in unit shipments and consumer demand. The figure also missed our estimate of $550.7 million.
Gross profit totaled $42.7 million, down 46.2% year over year. Consequently, pretax profit came in at $9.1 million, down 75.5% from the year-ago period. The segment’s backlog was $963.1 million, down from $1.24 billion as of Oct. 31, 2023.
European RVs: Revenues from the segment came in at $604.9 million, down 14.6% from the year-ago period due to a decline in unit shipments. The figure also missed our estimate of $785.1 million.
Gross profit of $92.6 million fell 24.6% year over year. The segment reported a pretax income of $1.2 million, lower than the year-ago pretax income of $28.8 million. The backlog of the segment was $2.04 billion, which declined from $3.33 billion recorded as of Oct. 31, 2023.
As of Oct. 31, 2024, Thor had cash and cash equivalents of $445.2 million and long-term debt of $1.04 billion. In October 2024, the company increased its dividend by 4.2% to 50 cents per share.
Thor projects its fiscal 2025 consolidated net sales in the range of $9-$9.8 billion, down from $10 billion reported in fiscal 2024. The consolidated gross profit margin is expected in the band of 14.7-15.2%, up from 14.5% reported in fiscal 2024. EPS is expected in the range of $4-$5 compared with $4.94 reported in fiscal 2024.
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -65.08% due to these changes.
At this time, Thor Industries has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Thor Industries has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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