Winnebago Reports Mixed Fiscal Third Quarter

Winnebago Industries (WGO) reported mixed results for its fiscal third quarter as revenue in its motorhome segment sank because a supplier problem with chassis, and the company’s chief executive said materials costs are “volatile” because of tariffs.

Revenue fell 5.9% to $528.9 million in the fiscal third quarter ended May 25, missing the consensus among analysts polled by Capital IQ for $560.8 million. Earnings rose to $1.14 a share from $1.02 a share a year earlier, although Winnebago said the result got a $0.06 a share benefit from an improved tax rate, and a $0.04-impact from a change in estimate related to R&D tax credits.

The Street was expecting earnings of $1.03 on a normalized basis, and $0.97 on a GAAP basis.

“Despite a moderate decrease in overall sales in a difficult RV wholesale market, consolidated margin continued to expand, primarily due to the strength of our dual-branded Towable segment,” said Michael Happe, the company’s chief executive. “The materials cost environment remains volatile, as newly implemented and pending tariffs start to impact cost inputs in the back half of calendar 2019.”

The company’s shares were about 3% weaker in pre-market trading on Wednesday.

Revenue in the towable segment rose about 11% to $346.8 million, while the backlog in the group fell 24% as Winnebago said it used extra capacity added in calendar 2018 and dealers continued to “normalize inventory levels.”

In the motorhome group, revenue sank 35% to $160 million as profitability in the segment, and Class B unit sales, fell because of a “temporary, but material” disruption in supplies of chassis. The class includes touring coaches and vans.

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