Higher Demand Drives Winnebago 3Q Profits
Winnebago Industries Inc. reported a 48.6% increase in net income in its fiscal third quarter, spurred by continued strong performance in motorhome operations coupled with an increase in towable sales.
Revenues for the period, ended May 31, increased 13.5% to $247.7 million versus $218.2 million for the fiscal 2013 third quarter. Net income grew 48.6% to $11.4 million while operating income rose 52.1% to $15.6 million and diluted earnings per share increased 55.6% to $0.42 from $0.27.
Revenues for the 39 weeks of fiscal 2014 increased 18.7% to $699.2 million from $588.9 million for the 40 weeks of fiscal 2013. During the period, operating income rose 57.0% to $45.6 million, net income grew 50.6% to $32.1 million, and diluted earnings per share increased 52.6% to $1.16 from $0.76.
Year-over-year, third quarter earnings growth was driven by higher motorhome unit sales, gross margin improvement, operating expense leverage, and in part a significant improvement in towables operating income. Motorhome unit growth of 17.8% was partially offset by lower motorhome average selling prices (ASP) of 4.1% as a result of product mix, leading to motorhome revenue growth of 13.6%. Additionally, third-quarter towable unit deliveries grew 2% and towable ASP increased 11.5%, contributing to towable revenue growth of 11.9% compared to the same period of last year.
Chairman, CEO and President Randy Potts commented, “Driven by strong demand for our products, we achieved the highest quarterly revenue figure since 2005, which led to substantial year-over-year profit growth in the third quarter. This was in spite of not including revenue of approximately $18 million related to certain rental units subject to repurchase option. During the quarter our team operated efficiently and effectively to successfully meet increased demand for our rental units all while maintaining deliveries with our other customers. We are very pleased with our retail growth during the quarter, which is driven by increased rental sales and increased retail consumer demand.”
Based on internally reported retail information, the company has shown a 60% increase in motorhome retail registrations in the third quarter compared to the same period last year, and a 34% year-over-year increase on a rolling 12-month basis.
“At our Dealer Days event this April, we introduced several new products and floorplans that were well received by our dealer partners,” said Potts. “As evidenced by continued strength in our dealer and retail demand, we believe we will continue to capitalize on future growth opportunities.”
To view the entire report click Q3 2014 Earnings Release.