Thompson Advice: Buy Thor, Drew and Winnebago
Editor’s Note: The Thompson Research Group (TRG) provides periodic reports on the RV industry to its investor clients. This current report follows release on Tuesday of the November motorized retail sales figures from Statistical Surveys Inc.
November 2009 Motorhome sales decline 6.7%. This marks the first single-digit decline in retail sales in 2009. Note that November 2009’s data excludes data from Georgia and New Mexico.
- November 2009 motorhome retail sales fell 6.7% to 1,038 units.
- Class A retail sales fell 13.2% to 637 units in November. November’s 13.2% decline in retail sales is the lowest since October 2007.
- Class C retail sales increased 5.8% to 401 units in November vs. a 22.9% decrease in October. This marks the first increase in Class Cs since August 2007.
- We were very encouraged to see the additional directional improvement in motorhome retail sales. We had heard steady feedback from retailers that motorhome retail trends had started to improve, and November’s retail data is the first meaningful tangible evidence of this trend. We understand that while many manufacturers last year took anywhere from three weeks to two months time off during the holiday season, many this year took only a week off of production. Winnebago Industries reported Q1’10 earnings showing a massive 350% increase in total backlogs and a 666% increase in Class A backlogs. We will gain greater clarity on retail demand this week when we attend one of the largest retail shows in Florida, the RV SuperShow in Tampa. We reiterate our Buy on Thor Industries Inc., Drew Industries Inc. and Winnebago Industries Inc.