3 Must-Have Slides From Winnebago Q1 Report

Winnebago‘s (NYSE: WGO) The latest earnings report was full of good news for investors. The recreational vehicle giant showed strong sales growth, record profitability and a huge backlog throughout the quarter that ended in late November. These trends all mean a big 2022 fiscal year ahead for the company.

Management added some context to these operating metrics in a shareholder presentation, and below we take a closer look at three of the key takeaways from this report.

Image source: Getty Images.

1. Market share

The Winnebago company has come a long way in the past five years. Its share of the recreational vehicle market in 2016 was just over 3%, but thanks to a few significant acquisitions and investments in the RV and towable vehicle segments, it added around 10 percentage points to that total. . This success explains why annual sales exceed $ 4 billion today, compared to $ 1 billion in fiscal 2016.

A slide showing growing market share.

Image source: Winnebago investor presentation.

Besides a better position in the industry, this change has produced a much more stable business that spans many segments of outdoor living. Rather than simple motorhomes, Winnebago is very present in boats and towable motorhomes. Its brands, including Grand Design, Winnebago, Chris-Craft and Barletta, all focus on the premium and premium segment of the market.

2. Finances

There is also no shortage of positive developments on the financial side of the business. Annual free cash flow is over $ 200 million, compared to less than $ 100 million for fiscal 2017. Gross profit margin also just hit a record 20% of sales, too, thanks to rising prices and strong demand across the portfolio.

A slide summarizing the annual changes in cash flow, income and profit.

Image source: Winnebago investor presentation.

Of course, part of this peak in profitability is simply due to inflation. But it is still impressive that Winnebago can raise prices faster than its costs rise. These record margins are also occurring despite major supply chain challenges, suggesting more room for higher profits to come if demand does not decline.

3. Perspectives

The RV industry is expected to grow in 2022, even from last year’s peak in sales. This bodes well for the industry leader, especially as it continues to grow its market share.

The broader outlook is also bright. There was a 16% increase in the demand for camping in the United States last year, which is an expansion much faster than usual. The pandemic has put a new emphasis on outdoor recreation, which does not appear to be waning.

A slide summarizing the positive trends in RV demand.

Image source: Winnebago investor presentation.

Management is particularly excited by the millions of people who say they intend to buy an RV over the next five years. This metric includes more than two-thirds of current RV owners who want to upgrade.

Winnebago’s current order book stands at nearly $ 5 billion, which is more than its commercial footprint over the past 12 months. Of course, these orders can be canceled by resellers at any time without penalty, so they do not match actual sales.

But given the low inventory levels at dealerships and the high demand for RVs, Winnebago has a good chance of keeping its factories at full capacity until 2022, even if it increases the gross profit margin above 20%. Sales. These wins should support solid and continued returns for shareholders of the motorhome giant.

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