Winnebago takes a beating in latest financial report

These are not good times for Winnebago stockholders. The company released its fourth-quarter and year-end financial report, and in the words of one market watcher, “Investors were set to have their worst day in two years.” The market set up a profit bullseye, and the miss was huge. As Winnie’s CEO put it, “The RV industry continues to face various headwinds,” and those headwinds caused Winnebago to take a beating.

Winnebago financial report: “Gross profit” touted, bottom line tells truer tale

While the company highlighted its gross profit in the opening summary statement (gross profit of $94.2 million, representing 13.1% gross margin for the 4th quarter), the actual bottom line wasn’t so impressive. In the financial quarter ending August 31, the big RV manufacturer flipped the charts upside down. The quarter showed a net loss of $29.1 million, or $1.01 a share. The same quarter in 2023 showed a net income of $43.8 million, or $1.28 a share.

For stockholders, who had been expecting 89 cents adjusted earnings per share (based on broker consensus estimates), there was a major blow. Excluding nonrecurring items, such as the write-off of goodwill associated with its marine Chris-Craft business, adjusted earnings per share dropped to 28 cents. That missed the broker consensus estimates for earnings per share by nearly 69%—the worst “miss” in five years.

Major understatement?

In what some might describe as a major understatement, company executives discussed the disappointing report. “Winnebago Industries’ fourth quarter performance fell short of our expectations, primarily reflecting the sluggish retail demand environment and operating inefficiencies within our Winnebago branded businesses,” said Michael Happe, the company’s President and Chief Executive Officer.

“The RV industry continues to face various headwinds, including uncertain retail conditions, higher inventory carrying costs and slightly elevated inventories in the motorhome segment, leading to continued dealer hesitancy and increased promotional efforts,” Happe continued.

Winnie says motorized still “centerpiece” of company strategy

What lies ahead for Winnebago? What’s the grand plan? CEO Happe pronounced, “As evidenced by the recent launch of the Lineage Series M, Grand Design’s first motorized RV, product innovation remains a centerpiece of our long-term strategy. We are continuously evolving our offerings to strike the right balance between cutting-edge features and the growing consumer preference for affordability, highlighted by products such as the Grand Design Reflection 100 Series, the Grand Design Influence and the Winnebago Access. As we begin Fiscal 2025, our RV and marine brands are intensifying their efforts to deliver exceptional value to consumers across a range of price points.”

Perhaps Winnebago is a better RV market “weather forecaster” than it would appear. As motorhome sales continue to sink faster than a torpedoed submarine, it will be interesting to watch and see how the Grand Design Lineage series will float with recalcitrant RV buyers.

Towable versus motorized—breaking it down

Just how did the company fare, based on various products? Here’s the breakdown as shown by adjusted EBITDA. That figure translates to “earnings before interest, taxes, depreciation, and amortization.” It’s a financial metric that helps evaluate a company’s profitability and financial health. Here’s what we learn from the Winnebago financial report.

As to towables and motorhomes, for Winnebago things didn’t look too sharp, either from a quarterly or annual perspective.

In the towable segment, the 4th quarter proved a downer. EBITDA for 2024 rang in at $20.6 million, compared to $42.7 million in 2023. That proved to be 51.9% less in earnings. For the complete year, 2024 showed earnings of $122.4 million. Compare that to all of 2023, which rang in at $172.1 million. Again, a big loss, 28.9%.

For motorhomes, the quarterly report proved to be much brighter than for towables—in a relative way. Fourth-quarter 2024 EBITDA showed $13.0 million, compared to 2023’s $22.4 million, a loss of only 41.9%. But the favorable comparison to towable earnings ends there. The annual earnings on motorhome sales for 2024 were $73.7 million, compared to 2023’s $142.0 million—a comparatively huge loss of 48.1% over the year’s operations.

For the rest of the Winnebago financial report, click here.

For more Winnebago information from RVTravel.com, click here.

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