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Baird: March Sales Faced Difficult Comparison

The investment firm of Robert W. Baird & Co. issued a client newsletter following this week’s release of retail RV sales activity in March reported by Statistical Surveys Inc. (SSI). Portions of the Baird newsletter follow.

U.S. towable retail down 1% in March. According to data from Statistical Surveys Inc., unit retail sales in major towable categories (travel trailers and fifth-wheels) decreased 1% in March, decelerating from the recent strong growth against a difficult comparison (+22%). Thor demand declined 1% in March, the second month of the company’s fiscal Q3, leaving quarter-to-date retail down 1%. Thor reported preliminary sales on May 2. Winnebago (a smaller player in the towable market) retail improved 1% in March.

March towable demand declined 1% (travel trailers and fifth-wheels). Travel trailer demand improved 1%, while fifth-wheel retail sales declined 4%. The towable market faced a difficult comparison in March (+22%), but the comparison eases in April (+2%). Data indicate that towable demand increased 9% through March.

Thor retail declines slightly. Thor U.S. travel trailer and fifth-wheel retail fell 1% in March, which represents the second month of Thor’s fiscal Q3. Weaker demand in fifth-wheels (-9%) offset growth in travel trailers (+3%). We model Thor North American retail growth of +8% in fiscal Q3, but note that the preliminary SSI data are frequently revised higher.

Winnebago. Winnebago U.S. towable retail improved 1% in March, the first month of the company’s fiscal Q3. We model Winnebago North American retail growth of +15% in fiscal Q3. Towables represent just 10% of revenue for the company, which entered the market in 2011 with under 1% share — note that given Winnebago’s small market position, even a few incremental units can lead to large swings in growth rates.

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