• Revenue: Consolidated revenue forecast reduced to a range of $2.8 billion to $3 billion from $2.9 billion to $3.2 billion.
• Gross Margin: Declined year over year due to product mix shift, but improved 110 basis points sequentially.
• Adjusted EBITDA Margin: Declined 340 basis points year over year; increased 140 basis points sequentially.
• Net Debt-to-EBITDA Ratio: Stood at 4.0 times, above the targeted range of 0.9 to 1.5 times.
• Share Repurchase: $20 million in stock repurchased with $180 million remaining under the program.
• Dividend: Quarterly dividend of $0.34 per share, marking the 43rd consecutive quarterly dividend.
• Adjusted EPS Guidance: Reduced to a range of $2.75 to $3.75 per diluted share from $3.10 to $4.40.
• Motorhome RV Segment: Revenue decreased year over year due to lower unit sales, partially offset by product mix.
• Towable RV Segment: Revenue increased modestly year over year due to higher unit volume.
• Marine Segment: Revenue increased due to unit volume, partially offset by a reduction in average selling price per unit.
• Barletta Market Share: Increased 140 basis points to 9.5% for the 12 months ended February 2025.

• Warning! GuruFocus has detected 5 Warning Signs with WGO.

Release Date: March 27, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Winnebago Industries Inc (NYSE:WGO) reported sequential profitability improvements, driven by operating, pricing, and cost improvements in the Towable and Motorhome RV segments.
• The company is leveraging innovation as a strategic differentiator, with new product launches like the Grand Design's Lineage brand and Newmar's expanded model lineup.
• Winnebago Industries Inc (NYSE:WGO) has a strong balance sheet, enabling it to fund organic growth, pursue acquisitions, and return capital to shareholders through dividends and repurchases.
• The Barletta brand increased its market share by 140 basis points to 9.5%, becoming the fastest-growing US aluminum pontoon brand in marine history.
• Winnebago Industries Inc (NYSE:WGO) is revitalizing its Winnebago Towables brand with a new pricing strategy and emerging product strategy, aiming to expand market share and drive growth.

Negative Points

• The company faces a challenging sales environment due to soft retail conditions and growing macroeconomic uncertainty.
• Winnebago Industries Inc (NYSE:WGO) reduced its fiscal 2025 adjusted EPS guidance due to reduced consumer confidence and sentiment.
• Gross margin declined year over year, primarily due to deleverage associated with a product mix shift towards more affordable models.
• The company is experiencing elevated warranty expenses in its Towable segment, impacting margins.
• Motorized RV field inventory remains elevated, with dealers being cautious about inventory levels due to retail pressure and aging stock.

Q & A Highlights

Q: How much of the EPS guidance cut is due to tariffs? A: Michael Happe, President and CEO, explained that the guidance range incorporates potential tariff impacts, which are expected to be limited for fiscal 2025 due to existing inventory and supplier negotiations.

Q: What are the expectations for retail performance in March and the start of the selling season? A: Michael Happe noted that March retail patterns are similar to February, with no significant changes. The guidance adjustment reflects a later-than-expected retail rebound and disciplined dealer inventory management.

Q: How is the relationship between OEMs and dealers evolving, and what impact does it have on Winnebago? A: Michael Happe stated that Winnebago maintains strong relationships with dealers across its RV brands and focuses on product differentiation and profitability rather than aggressive shipment strategies.

Q: What are the expectations for inventory turns and dealer inventory levels? A: Bryan Hughes, CFO, mentioned that dealers are pushing for higher efficiency, but there is no specific target for inventory turns. The focus is on ensuring dealers have the right product lineup to meet customer demand.

Q: How is Winnebago addressing the pricing strategy for its Towables business? A: Michael Happe explained that Winnebago is resetting its pricing strategy to align with market needs, focusing on product differentiation and attacking new price points and segments to expand market share.

Q: What is the impact of motorized chassis tariffs, and how is Winnebago managing it? A: Michael Happe stated that motorized chassis represent significant tariff exposure, and the company is working with suppliers to mitigate costs, potentially resourcing to US-based operations if necessary.

Q: How is Winnebago managing warranty expenses in the Towable segment? A: Bryan Hughes noted that warranty expenses are elevated due to addressing historical quality issues, but this is considered transitory. The Grand Design Towables business is experiencing higher warranty expenses due to broader quality campaigns.

Q: What are the priorities for the new SVP of Enterprise Operations from John Deere? A: Michael Happe highlighted that Steve Spike will focus on manufacturing excellence, strategic sourcing, product quality improvement, and continuous improvement activities to drive margin performance.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.