Winnebago Industries, Inc. Q3 FY2025 earnings call

Management Statement and Operational Highlights

• Resilience in Market: Team navigating challenging market environment, focusing on strategic priorities to enhance long-term value. Fiscal Q3 performance consistent with preliminary results, with soft market conditions affecting RV margins.
• Winnebago Motorhome Strategy: Installed new leadership, taking steps to lower field inventory, improve working capital, align production to demand, reduce expenses, and refresh product line for margin recapture starting fiscal 2026. Conducting comprehensive capacity utilization, supply chain, and organizational structure reviews for efficiency.
• New Product Launches: Newmar entered Compact Class C with Freedom Aire; Grand Design Motorhomes launched VT Class B and Lineage series; Winnebago Towables launched Thrive; Chris-Craft Catalina 31 rolled out; Barletta 2026 lineup includes helm redesigns and new color options.
• Market Share Gains: Gained share in Motorhomes (Class A gas/diesel, Class C) and Marine (Barletta increased aluminum pontoon share to 9.2% trailing 12 months through April).

Segment Performance

• Towable RV: Net revenues lower due to product mix shift (new Grand Design Transcend series travel trailers), unit volume increased 2.5%. Adjusted EBITDA margin declined due to higher warranty experience and deleverage, partially offset by operational efficiencies. Revenue contribution: Impacted by product mix shift.
• Motorhome RV: Net revenues down due to lower unit volume, partially offset by product mix. Adjusted EBITDA margin decreased due to higher discounts, allowances, and operational inefficiencies. Total Motorhome volume declined 14.8%. Revenue contribution: Affected by market conditions and Winnebago-branded Motorhome transitions.
• Marine: Net revenues increased 15% due to higher unit volume and targeted price increases. Segment adjusted EBITDA margin increased but offset by product mix and higher warranty expense. Revenue contribution: Driven by higher volume in the Marine segment.

Guidance

• Fiscal 2025 adjusted EPS guidance reduced to $1.20-$1.70 per diluted share, consolidated revenue forecast $2.7B-$2.8B.
• Q4: Motorhome sales up vs last year, EBITDA challenged by Winnebago brand turnaround; Towable sales flat to slightly down, profitability improved vs prior year; Marine shows continued growth, profitability improved vs last year.
• Tariff impact: Anticipate modest price increases of low to mid-single digit to offset tariff exposure in fiscal 2025; potential net risk of $0.50-$0.75 of diluted EPS for fiscal 2026 if tariffs not mitigated.

Risks

• Macroeconomic Uncertainty: Continued soft RV activity due to economic headwinds and higher borrowing costs.
• Inventory Management: Motorhome segment still requires destocking; dealer inventory levels need careful management.
• Tariff Exposure: Unmitigated tariff risk with potential impact on profitability, especially if supply chain mitigation efforts are insufficient.

Q: Tristan Thomas-Martin of BMO Capital Markets asked about Newmar's success and porting changes to Winnebago Motorized brand.

A: Mike Happe said Newmar is performing well with a strong product line, Class A diesel share growth, expanded Super C lineup, and good dealer inventory management, and Winnebago is looking to apply similar disciplined and product-focused strategies.