Winnebago Industries, Inc. (NYSE: WGO) reported financial results for the company’s first quarter of its fiscal year 2024 Wednesday.
Revenues for the fiscal 2024 first quarter ended Nov. 25, 2023, at $763.0 million, a decrease of 19.9% compared to $952.2 million for the fiscal 2023 first quarter. The results were primarily driven by lower unit sales related to market conditions, product mix, and higher discounts and allowances compared to prior year, the company said. This was partially offset by carryover price increases related to higher motorized chassis costs.
Gross profit for the fiscal 2024 first quarter was $115.8 million, a decrease of 27.8% compared to $160.4 million for the fiscal 2023 first quarter, according to Winnebago Industries. Gross profit margin decreased 160 basis points from prior year to 15.2% primarily as a result of volume deleverage and higher discounts and allowances.
Operating income was $39.1 million for the fiscal 2024 first quarter, a decrease of 54.5% compared to $85.9 million for the first quarter of last year, the company said. Fiscal 2024 first quarter net income was $25.8 million, a decrease of 57.1% compared to $60.2 million in the prior year quarter.
Reported earnings per diluted share for the fiscal 2024 first quarter was $0.78, compared to reported earnings per diluted share of $1.73 in the same period last year. Adjusted earnings per diluted share for the fiscal 2024 first quarter was $1.06, a decrease of 48.8% compared to adjusted earnings per diluted share of $2.07 in the same period last year. Consolidated adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was $54.1 million for the fiscal 2024 first quarter, a decrease of 44.2%, compared to $97.0 million last year.
“Winnebago Industries’ first quarter results underscore the resilience of our diversified portfolio and variable cost structure in navigating a sales environment influenced by challenging retail trends and intentional inventory management by dealers,” said Winnebago Industries President and CEO Michael Happe. “Our steadfast commitment across our portfolio to production discipline that aligns with market conditions, and improving operational excellence continues to deliver solid profitability. Throughout the first quarter, we maintained our focus on recent and forthcoming multiple new product releases in the towables RV segment, as well as a refreshed, entry-level Aria pontoon product in the marine segment, that address vital considerations surrounding affordability, while staying true to our reputation for outstanding quality and customer service.
“We also continued to strategically invest in critical long-term initiatives around advanced technology, digital transformation and IT capabilities,” Happe continued. “The inauguration of our new Innovation Center represents an important milestone as we strive to cultivate and integrate emerging technology innovations, enhancing the overall value proposition and experience for our customers. Our unwavering commitment to investing in the future reflects our long-term confidence in driving sustained growth, expanding market share, and providing customers with a diverse array of compelling options – all while ultimately delivering value for our shareholders.”
Towable RV
Revenues for the Towable RV segment were $330.8 million for the fiscal 2024 first quarter, down 4.8% compared to the prior year, primarily driven by a reduction in average selling price per unit related to product mix and targeted price reductions, partially offset by unit volume growth. Segment adjusted EBITDA was $33.1 million for the fiscal 2024 first quarter, down 8.8%compared to the prior year period. Adjusted EBITDA margin of 10.0% decreased 50 basis points compared to the prior year, primarily due to deleverage and new product start-up costs. Backlog for fiscal 2024 first quarter decreased to $199.8 million, a decrease of 54.0% compared to the prior year period due to continued softness in market conditions and a cautious dealer network.
Motorhome RV
Revenues for the Motorhome RV segment were $334.4 million for fiscal 2024 first quarter, down 28.0% from the prior year, primarily driven by a decline in unit volume related to market conditions and higher levels of discounts and allowances, partially offset by product mix and price increases related to higher motorized chassis costs. Segment adjusted EBITDA for fiscal 2024 first quarter was $21.3 million, down 57.6% compared to the prior year period. Adjusted EBITDA margin of 6.4% decreased 440 basis points compared to the prior year, primarily due to volume deleverage, higher discounts and allowances, and operational efficiency challenges. Backlog for fiscal 2024 first quarter decreased to $545.3 million, down 65.8% from the prior year period due to continued softness in market conditions and a cautious dealer network.
Marine
Revenues for the Marine segment were $87.3 million for fiscal 2024 first quarter, down 33.5%from the prior year, primarily driven by a decline in unit volume related to market conditions and higher discounts and allowances, partially offset by carryover price increases. Segment adjusted EBITDA for fiscal 2024 first quarter was $7.2 million, down 61.0% compared to the prior year period, and adjusted EBITDA margin was 8.2%, down 590 basis points compared to the prior year, primarily due to volume deleverage and higher discounts and allowances compared to prior year. Backlog for fiscal 2024 first quarter decreased to $140.4 million, down 55.9% from the prior year period, primarily driven by cautious dealer sentiment related to rising inventory levels.
Balance Sheet & Cash Flow
As of Nov. 25, 2023, the company had total outstanding debt of $593.1 million and working capital of $587.3 million. Cash flow used in operations was $21.4 million in the fiscal 2024 first quarter.
“Despite continued pressure from macro headwinds, the outdoor recreation market is largely performing in-line with near-term expectations and Winnebago Industries’ innovation engine continues to develop and deliver products that anticipate and exceed the expectations of discerning customers across the outdoor lifestyle market,” Happe said. “We expect our consistent focus on bringing the highest quality and most innovative products to the market at a variety of price points, will position Winnebago Industries to grow our market share and outperform expectations as the market recovers and levels of consumer confidence rise. We remain optimistic that the current cycle of RV dealer destocking is approaching its conclusion, and that market conditions in both retail and wholesale could begin to see improvement in mid to late calendar year 2024.
“Going forward, we will remain nimble and intentional as we prudently monitor and adapt in response to shifting market conditions, with a focus on profitability, maintaining competitiveness, further securing a preferred market position for our esteemed premium brands and making strategic investments to drive future growth.”