Plant Shutdowns Cut into Lippert’s Profit
OEMs shut down plants in December to try and get inventory on dealer lots back to “normal,” and that negatively affected the RV supplier’s fourth quarter earnings.
In announcing its preliminary fourth quarter results, Lippert said its net sales for the quarter will likely reach $890,000 to $900,000, and loss per diluted share in the range of .62 to .73 cents.
“During the fourth quarter, RV OEMs made larger-than-anticipated adjustments to production levels by taking a collective month of production down in order to normalize inventories as retail demand slowed, which had an adverse impact on our results. In response, we moved quickly to align our operations and manufacturing costs to current market conditions in order to support profitability in 2023, and as a result, we incurred severance-related and inventory reserve costs in the fourth quarter,” said Jason Lippert, president and CEO. “Despite these near-term impacts, we believe that our core RV demographics remain strong, and that RV dealer inventories are starting to come down. We anticipate RV OEM production to return to run rates more consistent with 2019 levels in the back half of 2023.
“The non-RV related parts of our business where we have been successfully driving diversification are proving more resilient, and we anticipate a rebound in aftermarket as parts supply improves across the industry. Additionally, our teams continue to drive new innovative products to support future growth. In the interim, our experienced leadership team is taking prudent action, adjusting our cost structure while executing on our proven diversification strategy to minimize the impact of softened RV demand, drive sustainable growth and generate long-term shareholder value.”