Baird: Dealers OK With Lower Inventory Levels
Editor’s Note: Robert W. Baird & Co. issued a client newsletter to investors following the April towable sales report from Statistical Surveys Inc. The following offers a summary of the results.
U.S. towable retail up in June. Dealer towable unit sales increased 2% in June, according to Statistical Surveys Inc.. The slight increase in June follows a strong increase in May, which was revised to +15% from +11%. Before adjusting for late-reporting states, U.S. towable retail is up 9% so far this year.
Towable demand up 2% in June. U.S. towable unit sales rose 2% in June and are up 9% YTD. Travel trailer registrations increased 2% (+10% YTD), while fifth-wheel sales grew just under 1% (+4% YTD).
Inventory. Results of our June RV dealer survey suggested that inventory has thinned after relatively aggressive stocking earlier in the year. Presently, we believe dealers are content with current inventory levels, and will reassess inventory needs as the September 18-19th open house approaches.
Thor. According to Statistical Surveys, Thor’s share of the combined travel trailer and fifth-wheel market has dipped to 38.1% from 39.2% through June. After adjusting for late-reporting states, we project Thor’s U.S. retail in May/June increased 7-10%, which compares to our expectation for 10% growth in May/June/July for Thor in North America. Given the unknown impact of July, Canada and late-reporting states, our expectation for 10% retail growth seems reasonable. Recall that Thor reported strong preliminary wholesale sales results for the July quarter, including an 18% increase in RV wholesale revenue and a 20% jump in the RV backlog (includes motorhome and towables).
Winnebago. According to the source, Winnebago is gaining a little share in towables after its Sunnybrook acquisition, albeit off a small base. Winnebago increased its YTD towables share from 0.6% to 0.8%. We expect the Winnebago brand to have a larger impact over time.
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.