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Analyst Firm: Shares of Winnebago Fall After Posting Weak Shipments, but Remains Good Prospect

Shares of Winnebago fell more than 12 percent yesterday (March 17) after Winnebago posted weak shipments and disappointing revenue for the second quarter, according to analyst firm Robert W. Baird.

“We expected better revenue—but emphasize that dealer sales topped our forecast, keeping dealer inventory exceptionally lean,” the analyst firm stated. “The dynamic points to better shipments in future quarters and no material change to our full-year estimates.”

Shipments fell short of the firm’s expectations of 909 versus 1,186 units, driving a surprising revenue miss in light of previous data suggesting wholesale shipments increased 26 percent for the first two months of the quarter.

As the firm predicted, retail recovery is on track. Retail improved 22 percent at 796 units sold versus Baird’s predicted 752 units. The firm cites easier credit and better consumer confidence for the improved sales, and says the trend supports the firm’s rebounding outlook for Winnebago.

Better retail and slower shipments indicates dealer inventory fell below Baird’s expectations of 2,500 units to only 2,179. Baird said dealer inventory rose only 8 percent against a 22-percent jump in retail, indicating dealers need to accelerate orders if the retail pace continues to pick up. Meanwhile, Baird expects the replenishment rate to hover near 1:1.

Backlog for the quarter finished at 957 motorhomes near the high end of the firm’s expected range of 800-1,000 units.

Given stronger retail and lean inventory, Baird said it remains confident in its earlier estimates despite rising gas prices and long-term deleveraging trends—citing it anticipates industry shipments to reach 30,000 units. However, as credit continues to ease, the firm said Winnebago could earn $1.25-$1.50 EPS and ship near 40,000 units.

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