Thor Industries announces strong RV sales growth

ELKHART, Ind., Dec. 8, 2020 — THOR Industries, Inc., has announced strong growth for the first quarter of fiscal 2021, which ended October 31, 2020.

This is a press release from Thor, edited for brevity.

“We are pleased to report a solid start to our fiscal year with strong year-over-year growth across all of our major metrics, including net sales, gross margin and net income attributable to THOR. Our backlog continued to increase in the first quarter, setting a record, while dealer inventories continued to decline as many of our product shipments are going directly to fill existing end-customer orders. To address the increase in demand, we have increased production levels. Even with our higher production output and deliveries, demand and backlog for our RV products continue to grow,” said Bob Martin, President and CEO of THOR Industries.

“We are working hard to manage through temporary supply chain issues, which are currently common across the entire RV industry. We are confident that once these temporary supply chain constraints are mitigated, our shipments will increase further. We also believe it will take a number of months of production to first fill dealer presold orders before we will begin a restocking cycle to help our dealers get their inventory back to a more historically normal level,” he added.

First-Quarter Financial Results
First-quarter net sales were $2.54 billion, compared to $2.16 billion in the first quarter of fiscal 2020. This year’s first quarter net sales includes $1.39 billion for the North American Towable RV segment, $493.9 million for the North American Motorized RV segment and $602.5 million for the European RV segment.

Consolidated gross profit margin was 14.9% for the first quarter of fiscal 2021, compared to 14.3% in the corresponding period a year ago. The improved gross profit margin is primarily due to the increase in net sales, resulting in a reduction of the manufacturing overhead percentage, and favorable warranty experience trends, partially offset by higher labor costs due to the current competitive RV labor market conditions in Northern Indiana.

Net income attributable to THOR and diluted earnings per share for the first quarter of fiscal 2021 were $113.8 million and $2.05, respectively, compared to net income attributable to THOR and diluted earnings per share of $51.1 million and $0.92, respectively, in the prior-year period.

North American Towable RVs
North American Towable RV net sales were $1.39 billion for the first quarter of fiscal 2021, compared to first-quarter net sales of $1.20 billion in the prior-year period. The increase was driven primarily by an increase in unit shipments, partially offset by a change in product mix.

North American Towable RV gross profit margin was 15.8% for the first quarter of fiscal 2021, compared to 15.3% in the prior-year period. The improvement in gross profit margin for the first quarter was primarily the result of a reduction in sales discounts, which effectively lowered material costs as a percentage of net sales, and favorable warranty experience trends, partially offset by higher labor costs due to the current competitive RV labor market conditions in Northern Indiana.

North American Towable RV income before income tax for the first quarter of fiscal 2021 was $141.2 million, compared to $104.3 million in the first quarter last year, driven by the increase in North American towables net sales.

North American Towable RV backlog was $4.40 billion at October 31, 2020, an increase of $3.33 billion, or 312.1%, compared to $1.07 billion as of October 31, 2019.

North American Motorized RV net sales were $493.9 million for the first quarter of fiscal 2021, compared to $415.9 million in the prior-year period. The increase in motorized net sales for the quarter was driven primarily by higher unit sales in Class B and Class C motorhomes.

North American Motorized RV gross profit margin was 13.8% for the first quarter of fiscal 2021, compared to 10.8% in the prior-year period. The improvement in gross profit margin for the first quarter was primarily the result of a reduction in sales discounts, which effectively lowered material costs as a percentage of net sales, and favorable warranty experience trends, partially offset by higher labor costs due to the current competitive RV labor market conditions in Northern Indiana.

North American Motorized RV income before income tax for the first quarter of fiscal 2021 increased to $41.6 million compared to $21.8 million a year ago, driven by the increase in North American motorized net sales.

North American Motorized RV backlog was $2.22 billion at October 31, 2020, an increase of $1.55 billion, or 230.6%, compared to $670.0 million as of October 31, 2019.

European RV net sales were $602.5 million for the first quarter of fiscal 2021, compared to $493.0 million in the prior-year period. European net sales increased by 22.2%, driven primarily by an increase in unit shipments, an increase in the overall net price per unit due to the impact of changes in product mix, and a favorable impact from year-over-year changes in foreign currency exchange rates.

European RV gross profit margin was 12.0% of net sales for the first quarter compared to 13.1% in the prior-year period. European RV backlog was $2.31 billion as of October 31, 2020, an increase of $1.02 billion, or 78.7%, compared to $1.29 billion as of October 31, 2019.

Outlook
“Our financial results were very strong for the first quarter, despite the continued challenges we faced as a result of the pandemic. We view the current chain constraints to be temporary in nature, and expect to achieve continued growth in fiscal 2021 supported by our October 31st backlog of $8.92 billion,” said Martin.

“We believe the long-term growth potential for the RV industry remains very positive. While it is certainly true that the impact of COVID-19 has brought new buyers into our industry, both THOR, specifically, and the industry, generally, were attracting new buyers and saw strong demand independent of the pandemic. People have shown that they appreciate the long-term value proposition RVs offer – affordability, a vacation in a controlled environment, freedom, and outdoor fun. We also believe that the desire by consumers to ‘control their own destiny’ and have safer, socially distanced vacation activities has been a key factor in driving recent RV demand and will continue to be a factor for the foreseeable future.

“On December 1, 2020, the RVIA updated their most-likely forecast and now expects an increase of 18.7% in calendar 2021 shipments over their most-likely estimate for calendar 2020 shipments. We support their forecast and believe there is potential for upside to this forecast based on current industry conditions,” Martin explained.

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