LCI Industries, parent company of Lippert, reported Q2 sales of $1 billion, a 34% drop over Q2 of last year. Its net income in the quarter was $33 million, down 78% year-over-year.
The decrease in year-over-year net sales for the second quarter of 2023 was primarily driven by decreased North American RV wholesale shipments and decreased selling prices which are indexed to select commodities, partially offset by acquisitions. Net sales from acquisitions completed in the 12 months ended June 30, 2023, contributed approximately $17.2 million in the second quarter of 2023.
“Our operational focus and consistent execution on diversification have remained the cornerstone of our performance, supporting solid results in light of significant year-over-year drops in wholesale shipments,” said Jason Lippert, LCI Industries’ president and CEO. “Execution on diversification has continued to pay off, with strength across our aftermarket, international, marine, transportation and housing markets helping partially offset softer sales in North American RV. Specifically, we saw meaningful margin expansion in our aftermarket segment for the quarter. Further, our leadership teams have been hard at work to right-size the business, implementing hundreds of continuous improvement projects, kicking off sourcing initiatives to capture lower raw material costs, and investing over $50 million in automation over the past 18 months to drive new efficiencies. These actions, combined with reduced commodity and freight expenses, have put our cost structure into better alignment, leading to another quarter of sequential margin expansion.
“We are continuing to flex operations to align capacity and labor with shifting OEM production schedules, while also supporting the areas of our business that remain strong. With significant inventory reductions year-to-date, we are generating sufficient cash to pay down debt and further strengthen our balance sheet amidst uncertain operating conditions.”
Lippert does see conditions looking better heading into the end of the year and beyond.
“The demand environment is improving, with order forecasts trending slightly upwards from the last quarter, dealer destocking beginning to slow, and older inventory clearing out as the latest models enter the market. Millions more campers hit the road this Memorial Day and Fourth of July versus 2022, and with RV trips being almost 50% cheaper versus traditional modes of vacation, we see a bright road ahead for the future of the outdoor lifestyle. Most importantly, we would like to give a heartfelt thank you to our team members for their commitment to driving our business forward and managing through a very challenging environment this quarter.”
