Forest City, Iowa-based Winnebago Industries released its third-quarter earnings on Wednesday, and as expected the company’s numbers were affected by what it called an “unprecedented series of events related to the COVID-19 pandemic.”
Not only did the company have to suspend its manufacturing operations, but it said the impact was felt across its dealer network, the supply chain and consumers.
Winnebago reported revenue in the third quarter of $402.5 million, a 24 percent drop from the $529 million of a year ago.
Revenues for Newmar, which Winnebago acquired in the first quarter of fiscal 2020, were $88 million. Removing Newmar, Winnebago’s revenues totaled $314.5 million, a decrease of more than 40 percent compared with the third quarter of fiscal 2019.
The company suffered a net loss in the quarter of $12.4 million, compared with net income of $36.2 million a year ago.
In response to the COVID-19 pandemic, which affected businesses around the globe but brought almost every industry in the U.S. to a standstill starting in March, Winnebago says it took “immediate and decisive actions to keep employees safe, control costs and maintain its financial strength and flexibility. The company’s financial position remains strong primarily due to its variable cost structure, entering the crisis with a very healthy cash balance, and ample additional capacity under its revolving credit facility if needed.”
President and CEO Michael Happe said of the earnings report, “Our third fiscal quarter was a uniquely challenging time for Winnebago Industries, as it spanned the most intense portion of the unexpected COVID-19 pandemic in the U.S. While the pandemic has significantly changed how we conduct business on a day-to-day basis, I couldn’t be prouder of how our teams have worked collaboratively to respond to this tremendous test.
“We would like to especially recognize and thank the first responders, health care professionals, and public health officials across the country and specifically in the communities in which we have a physical presence.
“As we ramp up operations across our portfolio, I have been inspired by the efforts our team members have put forth to ensure our manufacturing, warehouse, service, office, and remote environments are as safe as possible. Despite the COVID-19 disruption and ongoing related obstacles, we have not lost our focus on quality, innovation and customer service. We have grown market share, strengthened dealer and supplier relationships, and maintained key investments in initiatives critical to our future.”
Towables: Revenues were $189 million, down more than 45 percent from the previous year, primarily due to the suspension in manufacturing and the corresponding disruption to consumer buying patterns.
Motorhomes: Revenues for motorhomes increased 27 percent to $204 million, driven by the year-over-year impact of Newmar, which Winnebago acquired in November 2019. “Underlying demand for the Class B product line-up, including the Revel, Travato, Boldt, and Solis models remains strong despite the impact from the pandemic,” the company said, adding that it has a unit share of 45 percent of the North American Class B market.
“As we look ahead to the final quarter of fiscal 2020, we are optimistic about the slope of our company’s and industry’s recovery path due to the strong demand rebound we witnessed in May and the positive trends we are seeing continue this summer,” Happe said. “Retail and wholesale demand for outdoor recreation products are both recovering and headed in a strong upward direction as the COVID-19 pandemic has impacted travelers’ views toward how they desire to spend their leisure time experiencing nature and the outdoors. As states navigate the reopening of their communities, people are increasingly looking toward RVing and boating as ways to socially distance in a safe and memorable way.”