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Baird: Cautious Dealers Slow June Shipments

Editor’s Note: Robert W. Baird & Co. issued a client newsletter following the June shipments report. Excerpts from the Baird newsletter follow.

Shipments flat in June. Total RV shipments were flat in June, following stronger growth in May. Modest towable shipment growth (+1%) offset weak motorhome results (-9%) in the period. Following several months of seasonal restocking at dealerships and a slower-than-expected retail recovery in early spring, dealers seem reluctant to accumulate inventory as the selling season progresses.

Total June RV shipments flat with last year. Overall shipments were flat following a stronger May (+14%). As seasonal restocking has slowed and retail growth remains modest, orders have moderated. Recall that dealers reduced inventory during the last cycle, limiting the destocking pressure if retail lags. In our recent dealer survey, dealers indicated plans for modest growth in orders for the back half of 2011.

Motorhome shipments fell 8%. Class A shipments fell 8%, while Class C shipments dropped 9%. We continue to expect shipments to moderate in the second half, as dealers seem reluctant to stock heading into winter, but note that comps become easier beginning in fall. Year-to-date motorhome shipments are up 9%.

Towable shipments up 1%. Travel trailer shipments dropped 2% while fifth-wheel shipments were up 9%. Year-to-date towable shipments are up 8%.

• SAAR. We calculate a seasonally adjusted annual rate of shipments. The SAAR of motorhome shipments decreased to 23.3K units in June, from 28.9K units in May (23.6K units were shipped in 2010). The SAAR of towable shipments fell to 243K units in June, from 253K units in May (199K units were shipped in 2010).

This summary of a Baird research report is not intended as investment advice. To participate in Baird surveys and receive research reports, contact Craig R. Kennison, CFA, at ckennison@rwbaird.com.


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