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2Q Preview: Competition Thins for Winnebago

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March 17, 2009 by   Leave a Comment

Winnebago Industries Inc., the industry’s top-selling motorhome maker, is scheduled to report fiscal second-quarter results on Thursday (March 19). The following is a summary compiled by the Associated Press of key developments and analyst opinion related to the period.

Overview: Things have gone from bad to worse for the RV industry in recent months. Facing collapsing sales and mounting debts, two of the industry’s top names, Monaco Coach Corp. and Fleetwood Industries Inc., filed for Chapter 11 bankruptcy protection within days of each other earlier this month.

RV sales have been in a state of steady decline recently, as the souring economy and deadlocked credit markets drive consumers away from showrooms. While Winnebago has fared better than some of its competitors, the Forest City, Iowa, company has been forced to slash costs to cope.

Last month, Winnebago announced a round of pay cuts for its salaried work force. President, Chairman and CEO Robert Olson took a 20% pay cut, while executive officers faced 10% pay reductions and remaining white-collar workers took 3% cuts.

By the Numbers: Wall Street analysts expect Winnebago to post a second-quarter loss of 30 cents per share, on average, for the quarter ended Feb. 28, according to Thomson Reuters.

Analyst Take: Citi Investment Research analyst Gregory Badishkanian said motorhome sales trends remain ugly. “Dealers continue to struggle as credit remains extremely tight,” he wrote in a note to investors last week.

However, Winnebago might benefit over the next 12 to 24 months following the bankruptcy filings by two rivals as the company picks up lost market share, he said.

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