RV Stocks Take Hit on Lower Shipments News
Shares of recreational vehicle makers fell Tuesday (Aug. 28) after wholesale sales results for July showed an 8.5% decline from a year ago, according to an Associated Press report.
Avondale Partners analyst Kathryn I. Thompson said that motorhome shipments fell 10% from July 2006, reversing a gain in June. July was the twelfth consecutive month for declines in towables, but Thomson noted shipments were down 8.3%, the first month since September that the decline was below double digits.
“We continue to believe that dealer inventory levels are reaching reasonable levels, and the continued decline in wholesale shipments on a year-over-year basis reduces the inventory further,” she wrote in a note to clients, adding that retail sales have outpaced shipments for the past 10 months.
“However, this month leaves us with mixed feelings about the industry,” Thompson said. “While we are encouraged by the softening decline in towable shipments, a decline in motorhome shipments is somewhat disappointing (but not surprising given the current consumer environment).”
Craig Kennison, analyst for Robert W. Baird & Co., noted: “We expect orders to remain soft should the consumer discretionary spending environment deteriorate – an increasingly likely scenario given the tight credit environment. However, we could see some pockets of strength, such as in high-end motorhomes, should interest rates decline.”
Separately, Coachmen Industries Inc. late Monday suspended its dividend program, news which hit the Elkhart, Ind., company’s stock particularly hard Tuesday as shares fell to 52-week low of $6.67 before finishing down 62 cents at $6.86.
Other results from some of the industry’s public companies include:
Winnebago Industries Inc., down 86 cents, or 3.2%, to close at $26.36.
Thor Industries Inc., down $1.25, or 2.9%, to $41.45.
Drew Industries Inc., down $2.19, or 5.4%, to $38.06.
Fleetwood Enterprises Inc., down 26 cents to $8.84.
Monaco Coach Corp., down 48 cents, or 3.5%, to $13.15.