Winnebago Stock Climbs On Q2 Earnings Beat, But FY25 Forecast Slashed On Market Headwinds

Outdoor lifestyle product manufacturer Winnebago Industries Inc (NYSE:WGO) shares are trading higher in premarket after the second-quarter earnings.

The company reported a second-quarter sales decline of 11.8% year-on-year to $620.20 million, beating the analyst consensus estimate of $616.66 million.

The decrease in revenue was driven by a reduction in average selling price per unit related to product mix.

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Towable RV segment revenue climbed 1.2% Y/Y to $288.2 million. Motorhome RV revenue of $235.6 million decreased 30.4% Y/Y due to lower unit volume related to current market conditions. Marine segment revenue gained 17.1% to $81.7 million.

Gross profit decreased 21.1% Y/Y to $83.1 million, and gross profit margin contracted 160 basis points Y/Y to 13.4%. Adjusted EPS of 19 cents beat the consensus estimate of 13 cents.

The operating margin contracted 370 basis points to 1.3%, and operating income for the quarter plunged 78% to $7.8 million. Consolidated Adjusted EBITDA was $22.8 million, a decrease of 54.2% Y/Y.

Winnebago's cash and equivalents totaled $115.5 million as of March 1. It used $27.2 million in operations during the quarter. As of March 1, the company had a total outstanding debt of $598.7 million.

“Winnebago Industries continues to demonstrate solid performance in our strategic markets, leveraging product differentiation and sharper affordability options to maintain healthy market share in our core premium and mid-range RV segments,” said President and CEO Michael Happe.

Outlook: Winnebago reduced its FY25 revenue outlook from $2.9 billion – $3.2 billion to $2.8 billion – $3.0 billion against an estimate of $2.946 billion. The company has also lowered the FY25 adjusted EPS outlook from $3.10 – $4.40 to $2.75 – $3.75 versus an estimate of $3.19.

“Our full-year financial outlook for fiscal 2025 is updated to take into consideration the very dynamic environment and the macro-economic and sector challenges that our industry has been presented. Among these are stubborn interest rates, inconsistent consumer sentiment, and dealers that continue to push inventory levels lower, particularly in the Motorhome RV and Marine segments,” Happe said.

“While the impact of tariffs remains an active conversation with our vendors, including collaborative discussions on how best to mitigate their impact, we have included our current estimate of the net impact of tariffs in the range provided for our fiscal year 2025 outlook,” Happe added.