Winnebago's (WGO) Q4 Earnings & Sales Beat Estimates, Up Y/Y

Winnebago Industries, Inc. WGO reported fourth-quarter fiscal 2021 (ended Aug 29, 2020) adjusted earnings per diluted share of $1.45, handily surpassing the Zacks Consensus Estimate of earnings of 90 cents. This outperformance can be attributed to the higher-than-anticipated revenues generated in the company’s Towable and Motorhome segments. Revenues from the Towable and Motorhome segments came in at $414 million and $301.8 million, respectively, beating the Zacks Consensus Estimate of $362 million and $295 million.

The bottom line compares favorably with the year-ago earnings of $1 per share, marking a year-over-year jump of 45%.

This recreational vehicle (RV) maker registered revenues of $737.8 million during the August-end quarter, beating the Zacks Consensus Estimate of $693 million. Moreover, the top line recorded a 39.1% year-over-year increase.

The firm reported an operating income of $68.4 million compared with the year-ago income of $44.8 million, marking a year-over-year surge of 52.8%. This was driven by the Towable segment revenue growth and the Newmar buyout.

Winnebago Industries, Inc. Price, Consensus and EPS Surprise Winnebago Industries, Inc. Price, Consensus and EPS Surprise

Winnebago Industries, Inc. price-consensus-eps-surprise-chart | Winnebago Industries, Inc. Quote

Segmental Performance

Revenues in the Towable segment for the reported quarter climbed 34.8% year-over-year to $414 million primarily on solid consumer demand for outdoor experiences, particularly in Grand Design products. Quarterly adjusted EBITDA was up 45.8% year-over-year to $61.3 million.

Moreover, backlog in the segment increased to a record $747.9 million, up a whopping 219.2%, year-over-year, reflecting skyrocketing consumer demand during the fiscal fourth quarter.

During the August-end quarter, revenues in the Motorhome segment improved 50.4% year-over-year to $301.8 million chiefly on the Newmar buyout. However, excluding the impact of the acquisition, revenues decreased 12.6% from the prior-year period, as strong class B sales were more than offset by sales declines in class A and class C.

Nonetheless, the segment recorded an EBITDA of $19.5 million, significantly up from the year-ago quarter’s EBITDA by 81.2%. This upside can be attributed to improved profitability in Winnebago’s branded business and the addition of Newmar, partially negated by the plunge in organic revenues and dismal class mix.

The segment’s backlog increased to a record $1.1 billion, skyrocketing 535.8%, year-on-year, highlighting surging consumer demand during the reported quarter.

Costs, Financials and Dividend

Selling, general and administrative expenses for the fiscal fourth quarter flared up 40.4% from the prior-year quarter to $50.5 million.

Winnebago had cash and cash equivalents of $292.5 million as of Aug 29, 2020. Long-term debt (excluding current maturities) totaled $512.6 million, significantly up from the $245.4 million recorded on Aug 31, 2019.

The firm paid a quarterly cash dividend of 12 cents per share on Sep 30 to shareholders of record as of Sep 16, 2020, which marked a 9% hike from the prior payout.

Fiscal 2020 Highlights

For the fiscal year, the company registered adjusted earnings per diluted share of $2.58 per share, down 25.2% year-over-year. Adjusted earnings per diluted share were mainly hurt by the share consideration issued in the Newmar acquisition.

Net sales for fiscal 2020 came in at $2.4 billion, up 18.6% from the prior fiscal year’s $2 billion. Revenues for Newmar, which was acquired in first-quarter fiscal 2020, came in at $388.4 million. Revenues excluding Newmar summed $2.0 billion, roughly flat year-on-year due to the impact of the pandemic and related suspension of manufacturing operations during the fiscal third quarter, and disruptions across the dealer network, supply chain, and end consumers.

Outlook for Fiscal 2021

Winnebago, the leading producer of RV in the United States, is highly optimistic about fiscal 2021 on the solid momentum of outdoor RV demand. The company will enter fiscal 2021 with a strong position in the RV market, backed by its four premier brand platforms, Winnebago, Grand Design RV, Chris-Craft and Newmar, solid operational drive, a record backlog, and the financial flexibility to sail through the prevalent economic uncertainty.

Zacks Rank & Other Stocks to Consider

Winnebago currently flaunts a Zacks Rank #1 (Strong Buy). Shares of the company have appreciated 2%, year to date, as against the industry’s fall of 8.8%.

Some other top-ranked stocks in the auto space are PACCAR Inc PCAR, LKQ Corporation LKQ and BMW AG BAMXF. All three companies flaunt a Zacks Rank of 1, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

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