Baird: Weather, Gas Impact May Coach Sales
Editor’s Note: Robert W. Baird & Co. issued a client newsletter following the May motorhome retail sales report from Statistical Surveys Inc. Excerpts from the Baird newsletter follow.
U.S. motorhome demand down in May. Motorhome sales fell 3% in May, according to Statistical Surveys. We expect elevated gas prices, unfavorable weather and weak consumer confidence put pressure on results. With dealer inventory at appropriate levels, shipments increasingly depend on better retail results to drive the recovery.
• Motorhome retail registrations in the U.S. fell 3% in May. Class A registrations decreased 3%, while Class C registrations also fell 3%. A cold, rainy spring, likely hurt demand in the seasonally strong month. Elevated gas prices and the related effect on consumer confidence were also a headwind.
• Gas/Diesel. Class A-Gas growth (+7%) continues to support weak demand for Class A-Diesel units (-15%).
• Retail SAAR. The seasonally adjusted annual rate of motorhome retail registrations for May before revisions, fell to 19.7K units, from 23.3K units in April. In 2010, U.S. dealers sold 19.5K motorhomes.
• Dealer inventory. Motorhome dealer inventory bottomed a year ago, and in 2010 wholesale unit shipments outpaced retail sales by roughly 6%. Dealers continued to restock units in May, as shipments outpaced retail. We expect dealers to manage inventory more conservatively following the seasonally strong spring/summer selling season.
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 firstname.lastname@example.org.