LCI Industries Q1 FY2026 earnings call

• Jason mentioned the momentum built in recent quarters and current strength of performance in 2026 despite sluggishness in retail and wholesale leisure markets. • Diversification of the business has proven valuable, with a well-balanced portfolio delivering strong results. • European operations had strong quarterly results, and transportation business performed well with integration of freedom of seating and Transair climate control systems. • Ongoing investments and strong execution of teams in operational excellence, manufacturing optimization, and self-help initiatives contributed to outperformance. • Innovation remains a cornerstone, with significant increases in towable content since 2020 and recent product introductions gaining traction. • Aftermarket net sales grew 7% in a down retail environment, with customer loyalty driving outperformance. • Plans for facility optimizations, including 8 to 10 facility consolidations this year, and continued focus on G&A cost reductions.

For Q1 2026, revenue grew 4% to $1.1 billion. OEM net sales increased 4% to $853 million. RV OEM revenue declined 4% due to lower North American travel trailer and fifth wheel shipments, but adjacent industry OEM sales grew 17%, with revenue from Friedman and TransAir acquisitions being $47 million in the quarter. Aftermarket net sales grew 7% in a down retail environment. European operations delivered the strongest quarterly results since building that platform. Housing sales were flat year over year, outperforming a down market due to strength in residential windows.

• Expect RV wholesale shipments to be in the range of 315 to 330,000 units, a reduction from prior expectations. • Anticipate flat to low single digit OEM growth in the marine industry this year. • Expect full year revenue of $4.2 billion to $4.3 billion and operating profit margin in the range of 7.5% to 8%. • Tightened full-year guidance for 2026 adjusted EPS to $8.75 to $9.25, representing up to 24% annual growth at the high end. • Expect capital expenditures to be $55 million to $75 million for the year, focused on business investment and innovation.

• Factors beyond the company's control could cause actual results and events to differ materially from forward-looking statements. • Tariffs and steel, aluminum costs could impact margin if not fully offset by price increases. • Retail and wholesale leisure markets remain sluggish, which could affect revenue and performance. • Industry fundamentals could deteriorate further, impacting the company's financial results.

Q: Nathan Jones from Stifel asked about adjacent industries OEM growth strengths/weaknesses and margin performance contributors.

A: Revenue from acquisitions was $47 million in the quarter, and margin expansion was from self-help initiatives like G&A improvements and facility consolidations.

Q: Daniel Moore from CGS Securities asked about revenue guide, aftermarket momentum, and margin outlook.

A: Automotive aftermarket division revenue is mid-teens for Q2, 140 million of new product placement in RV and marine for model year change, and margin improvement expected from self-help initiatives.

Q: Joe Atabello from Raymond James asked about operating margin runway and discussions with Patrick.

A: Benefits from facility consolidations will impact P&Ls from July 2026 through July 2027, and board determined to continue as standalone.

Q: Patrick Buckley from Jefferies asked about European results drivers and Lippert Factory Service.

A: European results improved from restructuring and self-help initiatives, Lippert Factory Service is small today with growth potential.

Q: Scott Stember from Roth Capital asked about facility consolidation benefit and aftermarket trends.

A: Facility consolidation benefits seen in first quarter, automotive aftermarket trending mid-teens in Q2, and used RVs could benefit aftermarket.

Q: Tristan Thomas from BMI Capital asked about retail assumptions, unit mix, and new model year share gains.

A: Retail assumptions down mid-single digits, unit mix seen with single axle flattening and fifth wheels up, $140 million includes various products.

Q: Brandon Rowley from Loop Capital asked about Q2 operating margin and price pushing.

A: Q2 expected to be strong, working on affordability with good, better, best products and special deals.

Q: Alice Wicklent from Baird asked about content per unit details and M&A pipeline.

A: Content per unit growth from organic innovation, mix, and price increases, M&A pipeline has tuck-in opportunities.