THOR Industries set another record for sales and earnings in the fiscal third quarter, the company announced.
Net sales for the quarter were $4.66 billion, an increase of 34.6% as compared to the third quarter of fiscal 2021.
Net income was $348.1 million, compared to $183.3 million for the prior-year period.
Through three-quarters of the fiscal year, THOR reports sales of $6.9 billion for this year, a nearly 53 percent increase over the same period a year ago.
“I am pleased to report this quarter that THOR once again managed through an uncertain business environment to achieve record net sales and profitability across many of our brands. Our teams have done an exceptional job navigating continued supply chain and labor constraints while still fulfilling ongoing dealer and consumer demand for our products,” said Bob Martin, president and CEO. “Net sales for our fiscal third quarter increased 34.6%, net income attributable to THOR grew 89.9% and our gross margin improved by 270 basis points compared to the fiscal third quarter of 2021. Our growth and profitability is a result of our ongoing commitment to prudent operational and financial management.
“At the end of our fiscal third quarter, due to the outstanding production efforts of our team members, our independent dealer inventories of towable RV products were at more historically normal levels. Due to continued high demand for our motorized RVs and persistent global chassis supply constraints, our independent dealer inventories of motorized products were still below optimal levels. We do not expect motorized RV inventory levels to return to more historically normal levels until early in calendar 2023.
“We continue to make progress in managing and fulfilling our order backlog. In the third quarter, we decreased our backlog by more than 3% to $13.88 billion compared to the third fiscal quarter of 2021. This calendar year, we have reduced the backlog, which was $17.73 billion as of January 31, 2022, by 21.7% at the end of our third fiscal quarter on April 30, 2022. We are very pleased with our progress, and we believe that the current backlog, while still elevated, is indicative of healthy long-term demand for our RV products. As we have reported, we actively verify the backlog on an ongoing basis and will continue to do so to make sure that it is aligned with both our dealers’ inventory needs and retail demand. To be clear, the current level of our backlog remains elevated, and we continue to be focused on opportunities to lower it to more traditional levels.
“We remain disciplined in aligning production to meet current demand without overproducing and overloading our independent dealer channel. In order to align production with retail demand, we pulled back on towable production in the latter half of our fiscal third quarter. On a historical basis, we have prudently and proactively managed our production rates category-by-category based on market conditions, and we are doing so again today,” said Martin.
Added Colleen Zuhl, senior vice president and chief financial officer: “We achieved yet another quarter of record net sales and earnings despite ongoing chassis supply constraints which limited our production volumes and prevented us from meeting the market demand for motorized products in both North America and Europe which prevented us from posting an even stronger quarter. Our focus on long-term margin improvement along with lower discounts resulted in our outstanding consolidated gross profit margin of 17.3% for the fiscal third quarter, and we are confident that our core margin improvement strategies will sustainably improve our margin profile for the long run. While margin levels have been positively impacted by a low discount environment in the last couple of quarters, as the industry returns to a more normalized discounting environment, our 2025 goal of 16% consolidated gross margin is still attainable.”
“In balance with margin improvement, we are focused on stabilizing and growing market share. As an example, we have aggressively developed and introduced a comprehensive line of Class B motorhomes across our brands for delivery to our independent dealer network. We did not have any meaningful share in this segment when we started a few years ago, but according to first quarter data for calendar 2022 from Statistical Surveys, Inc., we have taken significant market share and are now the #1 RV manufacturer within the North American Class B motorhome category,” added Todd Woelfer, senior vice president and chief operating officer. “When combined with our European sales of campervans, which are European Class B equivalents, we are also the global leader in this segment – the hottest segment currently within the RV industry. It is a testament to our ability to use our scale and innovation to quickly grow in a new market segment. In addition, with this exciting news, as of the end of the quarter, we are now the market share leader in every North American RV product category in which we compete.”
“The RV industry’s calendar 2022 retail selling season has been impacted by the current macroeconomic conditions faced by consumers, and while North American industry retail towable demand is anticipated to be lower than the historically high levels of recent quarters, it remains robust as enthusiasm for the RV lifestyle continues to grow,” Woelfer added. “Motorized industry retail demand continues to outpace the industry’s ability to produce given the limitations on chassis supply. Industry retail registrations in the first calendar quarter of 2022, while below the record levels of 2021, exceeded both 2020 and 2019 registrations in both North America and Germany. We believe retail demand for the remainder of our Fiscal Year 2022 and the beginning of Fiscal 2023 will be strong, barring additional macroeconomic impacts, and we expect calendar year 2022 North American RV industry retail sales of between 460,000 and 480,000 units, which would represent one of the best years of North American RV retail sales on record.”