Woodbury’s Take on 2013 Hershey RV Show

September 16, 2013 by · Comments Off on Woodbury’s Take on 2013 Hershey RV Show 

Chuck Woodbury

Editor’s Note: The following column was penned last week by editor Chuck Woodbury, reporting from America’s Largest RV Show in Hershey, Pa. Woodbury discusses some of the RVs that caught his eye. The show closed on Sunday. To view Woodbury’s newsletter click here.

I’m still in Hershey, Pa., at the 2013 Hershey RV Show, which is officially billed as “America’s Largest RV Show.” If you are in the area, there is still time to attend. It runs through tomorrow (Sunday). It’s a huge affair. For anyone interested in seeing what’s new for 2014, this is a piece of heaven.
Half the reason I attend the show each year is to rub elbows with my buddies — mostly other guys who write or do videos about the RV industry, and to meet up with readers of this newsletter. So far, a dozen readers have introduced themselves, and I’ve run into several authors of books we sell, which is always nice. I’m writing this on Thursday, so there is still plenty of time to explore the show and visit with friends.
I’ve explored many of the RVs on display and have been impressed with a half-dozen. I was amazed by the super-spacious Rockwood HW 296 popup trailer that includes “everything” — even a bathroom with shower. I also liked a lightweight hybrid trailer by Starcraft, the Travel STar EXP 187TB, with three canvas “pop outs” which make room for two double beds and a queen-size bed, plus all the other regular RV features. It’s so light that it can be pulled by many family cars. Lightweight trailers are the big thing this year and are popular with buyers. Depending upon who you talk with, towable RVs — trailers of all sizes and fifth-wheels — are outselling motorized RVs about 12-to-one (some people say 16-to-one).
Winnebago is debuting a new lightweight Class C motorhome with single-tire rear axle and a very interesting drop-down double bed (just push a button), with a Penistar 3.6 litre gas engine on a Ram ProMaster chassis. At 9,300 pounds, the 24-foot Trend is not suited to pulling a tow vehicle. But for a couple or family looking for an RV for camping weekends or vacations, it might be just the thing (good mileage). The MSRP is about $93,000 but it’s being sold at the show for about $79,000.
I loved a tiny trailer from Little Guy — even smaller than a Teardrop — called MyPod, that weighs a mere 500 pounds and can be pulled by virtually any vehicle, even some motorcycles. This would be a great step-up for tenters tired of sleeping on the hard ground.
I’m putting together a video showing these vehicles and others and will have it posted within a couple of weeks. But for now, I must get back to work (and to play). I’ll be home late Sunday night and hope to see you here again next week.

Motorhome Sales on a Roll – Up 29.6% in June

August 16, 2013 by · Comments Off on Motorhome Sales on a Roll – Up 29.6% in June 

Consumers like these at the Florida RV SuperShow in January are propelling motorhome sales to lofty heights in 2013.

Year-over-year motorhome registrations jumped 29.6% in June while sales for the six months increased 30.9%, according to the latest report from Statistical Surveys Inc. (SSI).

As reported by RVBUSINESS.COM, Thor Industries Inc. held the No. 1 spot in year-to-date motorhome registrations with a 25% market share followed by Winnebago Industries Inc. (18.1%), Forest River Inc. (12.8%) and Forest River’s Coachmen RV division (12.2%).

In the Class A category, June sales climbed 31.3% compared with 2012 and were up 30.3% for the six months. Thor led the sector through June, posting a 21.8% market share, edging Winnebago (20.5%). Tiffin Motorhomes Inc. was No. 3, capturing an 18% share, while Fleetwood RV Inc. garnered a 12.7% share.

Class C sales gained 27.7% for the month and 31.6% year-to-date. Thor led the category for the six months with a 28.5% market share, followed by Coachmen RV (19%), Forest River (17.9%) and Winnebago (15.5%).

Rental registrations, primarily Class C sales, gained 11% in June.

To subscribe to this or other SSI reports, contact Scott Stropkai, national RV sales manager, at (616) 281-9898 ext 128, or (616) 446-8179 (cell).

Thor Posts Record 4Q Sales; Backlog Improves

August 6, 2013 by · Comments Off on Thor Posts Record 4Q Sales; Backlog Improves 

Elkhart, Ind.-based Thor Industries Inc. Monday (Aug. 5) announced record sales as well as an improved backlog for the fourth quarter and full year ended July 31.

Sales in the fourth quarter were $1.023 billion, up 15.2% from $888.2 million in the fourth quarter last year. RV revenue was $913.2 million, representing an 18.6% rise from $769.9 million a year ago. Towable sales were up 12.6% to $745.3 million while motorhome sales enjoyed a 55.8% jump to $167.9 million.

Bus sales were $110.1 million, down 6.9% compared to $118.3 million in the fourth quarter last year primarily as a result of the sale of SJC Industries on April 30.

For the full year, revenue grew 19.6% to $3.69 billion from just over $3 billion last year. RV sales grew 22.8% to $3.241 billion from $2.640 billion, including a 15.9% increase in towable sales to $2.650 billion and a 67.1% surge in motorized sales to $591.2 million. Bus sales were $448.8 million, up 0.9% from $444.9 million last year, including the results of SJC Industries for the first nine months of fiscal 2013 and 12 months of fiscal 2012.

RV backlog on July 31 was $441.5 million, up 31.7% from last year. Towable RV backlog increased 1.7% to $228.4 million and motorized RV backlog nearly doubled to $213.1 million.

With the decision to sell the bus business, which was announced on July 31, the financial results of the bus segment will be presented as discontinued operations for all periods presented in the upcoming annual report filed with the Securities and Exchange Commission (SEC), which the company expects to file in late September.

“Thor achieved record sales for fiscal 2013 as the continuing growth of the towable RV market was enhanced by the momentum in the motorized market. We are pleased with the strong fundamentals of the entire RV market and we are excited by the growth prospects in both towable and motorized RVs as we enter our new fiscal year,” said Bob Martin, Thor president and CEO. “In September we will be showcasing our newest RV models as we connect with our dealers at our Open House in Elkhart, which we expect will set a positive tone for the upcoming year.”



RVIA’s ‘Media Buzz’ Distributing Major Stories

June 6, 2013 by · Comments Off on RVIA’s ‘Media Buzz’ Distributing Major Stories 

Each month, MediaBuzz, a service of the Recreation Vehicle Industry Association (RVIA), delivers top RV news stories in print and broadcast straight to your email inbox.

The latest “Buzz” shows in a consolidated way how much the RV manufacturing and park and campground industries have hit the media “airwaves” during recent weeks in an significant way.

To read an entire article or to watch a broadcast clip, simply click the article’s title. To keep up with RV news hits in between issues of MediaBuzz, visit RVIA’s newsroom. You can also subscribe to receive e-mail alerts via RVIA’s RSS feed by following the instructions on <>.

RV Campers On Road For Comeback (Video) <>
ABC World News
Monday, June 3, 2013
Family vacations could include mega campers made in America. David Muir and ABC News made a visit to Winnebago Industries Inc.’s Forest City, Iowa facilities. Motorhome sales growth continues to out-pace the industry.

RV Comeback Drives Hiring Boom In Indiana Town <>
NBC Nightly News and “The Daily Nightly”
Thursday, May 23, 2013
When you see an RV on the highway or in a campground, there’s a good chance it came from this area of north-central Indiana: Almost half of RVs on the road today were made in Elkhart County. As the economy recovers, sales have come roaring back, rebounding 72 percent from 2009 to 2012.

Recovery, Boomers Send RV Sales Roaring Back <>
U.S.News and World Report
Friday, May 31, 2013
RV sales have boomed during the recovery, and demographics will be on the industry’s side for years to come.

Motor Home Sales Rise In Hopeful Economic Sign <> (Money)
Monday, May 20, 2013
If you find yourself on the road this Memorial Day weekend, you might want to keep track of the recreational vehicles you see. While not exactly a surefire economic bellwether, RV sales have been coming back after a disastrous recession for the industry, and they may be another indicator of a strengthening economy.

Summer Travel Forecast: Better, But No Blowout <>
Associated Press
Friday, May 24, 2013
The hunt for inexpensive vacations is helping companies that recreational vehicles, too. Traveling by RV means families don’t need to pay for hotels and can cook most of their meals. At El Monte RV, one of the country’s largest RV rental companies, summer bookings from domestic customers are up 20 to 25 percent compared with last year.

8 Ways To Hit The Road In An RV <>
CNN Money and Fortune Magazine
Tuesday, May 21, 2013
RV’s are a $10 billion industry, with 80 manufacturers and 3,000 dealers. More baby boomers are moving into retirement, and buying an RV is one of the ways they reward themselves when they do.

Winnebago Rolls As America Rediscovers The RV (Video) <>
CNBC “Behind The Wheel”
Friday, May 31, 2013
As the summer vacation season kicks into high gear and you head out on the road, expect to see a familiar sight. Recreational vehicles and motor homes are experiencing a rebirth. That’s welcome news for Winnebago Industries, which has survived one of the roughest periods for the RV industry.

Airstream 2 Go Offers RV Rentals With Retro Flair <> (Travel)
Wednesday, May 22, 2013
Launched earlier this month, offers the first-ever rentals of the distinctive “silver bullets” that have been icons of the highway for more than 80 years. “Everybody recognizes them,” said Al Hesselbart, historian at the Recreational Vehicle Hall of Fame and Museum in Elkhart, Ind. “If it’s a bright aluminum trailer with rounded curves, it’s got to be an Airstream.”

RV Numbers Keep On Moving Up <>
Tuesday, May 28, 2013
Based on the April figures released Tuesday by the Recreation Vehicle Industry Association, wholesale shipments of all RVs were up 10.8 percent over March and were 19 percent better than April 2012. Last year was the third straight year of increased RV shipments, and April marked the 16th consecutive month of increased shipments compared with the same month a year prior.

Northeastern Arizona  <>
Phoenix Magazine
Friday, May 31, 2013
The Navajo Nation is famous for its scenery and ancient ruins. For its hotels, not so much. Why not take an RV?

Guide To RV Trailers  <> and Sunset Magazine
Friday, May 31, 2013
Summary: Should one of these be your next hotel room? Find your camper style.
Best Of The Midwest Travel Picks 2013 <>
Midwest Living
Friday, May 31, 2013
Plan your best vacation yet! 25 scenic drives.
Bring Your Home On Wheels To These RV Parks In The Hills (Video) <>The River Cities Sunday Tribune, Marble Falls, TX
Friday, May 31, 2013
Whether you plan to stay a few days or several months, RV parks offer lots of flexibility and many of the comforts of home. With the right recreational vehicle, you can experience the Highland Lakes at your own pace and with your own place.

Bret Michaels Revs Up For Debut Of RV Travel Show <>
Monday, May 27, 2013
After decades in the spotlight as a glam metal frontman, 50-year-old rocker reality star Bret Michaels is throwing a new skill into the mix — tricking out RVs and rocking the open road.

RV Sales Rolling Up From Major Downturn (Video) <>
WBIR-TV Knoxville, TN
Monday, May 27, 2013
RV sales are rolling along the road to recovery, following a big slump during the economic recession.

Camping On RV Lets You See The Nation <>
The Gazette, Colorado Spring, CO
Monday, May 20, 2013
Four years ago, Bill Turner came home from his job as a bank CFO and announced to his wife that he was tired of sitting at a desk crunching numbers. How did she feel about early retirement and full-time RVing?

Plug Into Comfort With An RV <>
The Bellingham Herald, Bellingham, WA
Wednesday, May 15, 2013
Yup, it’s all about comfortable camping, and it’s easy in Idaho where there are so many places to plug in your RV and enjoy fishing, boating and other activities. It’s fun to explore places across the state and just take your home with you whether you have a tent trailer, pickup camper, trailer or luxury motorhome. RVs sure make traveling across the state a lot easier.

RVs: Past, Present and Future (Slideshow) <> (Auto)
Tuesday, May 14, 2013
A historical look at RVs through the years.

RV Dental Clinic To Help St. Martin Students <>
KATC Lafayette, LA
Monday, May 13, 2013
St. Martin Parish students are eligible for dental care through a mobile clinic that’s scheduled to hit the roads this summer.

Schensul: Camping’s Not Just Roughing It Anymore <>
Sunday, May 12, 2013
In my recent sampling of campgrounds near the Jersey Shore, three out of four were places so full of activities and recreational possibilities that I couldn’t help but think “Club Med in the Pines.” I could see why some of the campers at these resorts were “seasonal,” setting up trailers or park model accommodations and staying the entire summer. The industry has coined a new term for the phenomenon: destination camping. As in the campground is your destination, like, say, Sandals would be in Jamaica.

RV Industry Rebounds From Recession <>, Gloucester, MA
Friday, May 10, 2013
The recreational vehicle market, hit hard by the prolonged recession, is making a strong comeback, industry officials reported Thursday in this RV capital of North America.

RV Fans Like Leaving Home Without Leaving Home Behind <>
Southern Maryland Newspapers
Friday, May 10, 2013
A weekend getaway doesn’t have to mean leaving behind the comforts of home. A whole pack of Southern Marylanders takes home on the road in recreational vehicles. For RV enthusiasts, just about any trip can become a camping trip.

Newly Opened RV Sprouts Delivers Gardening Supplies For RV Users <>
Friday, May 10, 2013
There are many joys that come with taking a Recreational Vehicle (RV) out on the open road to see the country. Healthy, inexpensive and nutritious eating isn’t usually on that list, however. Many RV enthusiasts are looking for a better option but don’t know where to turn. One new store currently celebrating its grand opening has the answer. RV Sprouts, recently established by entrepreneur James Crawford, is an Internet store that features home gardening supplies, seed starting supplies, and vegetable seeds and plants that are perfect for RV users.

RV Industry Power Breakfast Draws 400 Industry Folks Together In Elkhart <>
Elkhart Truth, IN
Thursday, May 9, 2013
Recreational vehicle manufacturers, RV suppliers, RV dealers, campground owners and area officials sat down together in the heart of the RV industry for an inaugural industry event, the RV Industry Power Breakfast.

Elkhart Hosts First RV Industry Power Breakfast <>
WSJV-TV FOX 28, Elkhart, IN
Thursday, May 9, 2013
Elkhart hosted the first RV Industry Power Breakfast at the RV Hall of Fame on Thursday. This is the first event to bring together the leadership of major RV-related companies, the Recreation Vehicle Industry Association executive staff, economic experts, and government leadership for a special conference in the RV industry Capital of the World.

Industry Push Better Than Expected Says RVIA Head <>
Elkhart Truth, IN
Thursday, May 9, 2013
With the recent growth in the industry, manufacturers and suppliers are already having a tough time keeping up. “It is better than I thought it would be, but I think they’re running into spotty shortages now. If the industry continues at the pace they’re continuing before the season’s out, there will be some difficulties in keeping up,” said Coon.

‘Fancy Nancy’ RV Tour Coming To Tulsa Bookstore Tuesday <>
Tulsa World
Monday, May 6, 2013
Robin Preiss Glasser, illustrator of the popular “Fancy Nancy” children’s series, will swing through Tulsa on her RV tour to promote the newest picture book in the series, “Fancy Nancy: Fanciest Doll in the Universe.”

Family Vacation <>
Parents’ Resource Guide
Wednesday, May 1, 2013
Spring is the perfect point to start thinking about family vacations. But with air fares and fuel prices shooting for the stars, financing a family-friendly getaway can be a colossal challenge. It’s time to put your home on wheels. Today’s Recreational Vehicles (RVs) are solving the economical and logistical challenges facing today’s active families. Available in a wide variety of shapes and sizes, RVs are easily customized to fulfill your family’s vacation dreams.

Forecast: RV Shipments to Climb 8.4% in 2013

June 3, 2013 by · Comments Off on Forecast: RV Shipments to Climb 8.4% in 2013 

Richard Curtin, forecaster for the RVIA

The recreation vehicle (RV) industry’s shipments are predicted to total 309,800 units in 2013, 8.4% above the 2012 total of 285,749.

According to a new forecast by RV industry analyst Richard Curtin, released at the Recreation Vehicle Industry Association’s (RVIA) Joint Committee Luncheon today (June 3), RV shipments are expected to rise for a fifth straight year in 2014 with wholesale production expected to reach 321,800 units, a gain of 3.9% over the projected 2013 total.

The estimated total for 2013 would be an 87% increase from the industry’s recession low in 2009. Fueled by strong consumer response to the versatility, affordability and innovative designs of new models, RV shipments through the first four months of 2013 shot up 13.3% compared to the same period in 2012. The industry has seen double digit gains in conventional travel trailers, Class A motorhomes and Class C motorhomes.

“The favorable RV outlook is based on modest gains in jobs, incomes and household wealth,” said Curtin, director of consumer surveys at the University of Michigan, during his presentation to RVIA members at the association’s annual Committee Week. “Consumer budgets have changed, but they still hold steadfast preferences for the RV lifestyle.”

Consumers have adopted a more realistic economic outlook, Curtin told the Committee Week audience. Manufacturers have responded by introducing an array of new products that will provide the same cherished RV experiences while respecting their new budget limitations.

“The RV industry will approach its next peak as the market demand for RVs continues to improve, particularly among Baby Boomers and younger buyers due to the ongoing efforts of the Go RVing campaign and the new product offerings from manufacturers,” Curtin said. “Given the modest gains expected in the financial situation of likely RV buyers, this next market peak is likely to be approached gradually.”

The RV market is expected to be bolstered over the next two years with rising home values and higher stock prices boosting the willingness and ability of new RV buyers.

“The strong appeal of the RV lifestyle underscores the iconic status of the RV in the minds of American consumers,” Curtin said. “This reflects deeply held family values, the enduring appeal of the natural environment, and people’s desire to instill in the next generation their cherished traditions.”


ASV is Emerging as Major Motorhome Player

May 20, 2013 by · Comments Off on ASV is Emerging as Major Motorhome Player 

In the wake of its announced acquisition of Navistar Inc.’s RV operations, Allied Specialty Vehicles (ASV) has begun assembling the pieces for its emergence as a major player in the motorhome segment, RVBUSINESS.COM reported.

Faced with a raft of organizational and engineering challenges, ASV has mapped out a strategy that will consolidate the building of four high-profile motorhome brands at its campus in Decatur, Ind., while also realigning its corporate structure.

“We will be manufacturing four very iconic motorhome brands – Fleetwood, Monaco, Holiday Rambler and American Coach – all with strong recognition in the marketplace, a loyal customer base and tremendous dealer networks,” noted John Draheim, president and CEO of Fleetwood RV Inc., a division of Orlando, Fla.-based ASV.

As part of the buyout, ASV purchased all of the equity interests of Navistar RV, including manufacturing operations for Navistar’s R-Vision and Holiday Rambler towable units in Harrisburg, Ore., and Navistar’s Monaco and Holiday Rambler brand motorized RVs in Wakarusa, Ind. ASV, which is owned by private equity firm American Industry Partners, has also entered into a multiyear leasing agreement for Navistar RV’s Elkhart, Ind., plant, a former Roadmaster chassis facility that houses towable operations. The sale does not include Bison Coach, Navistar’s horse trailer manufacturing business.

“Towable operations will not be impacted,” said Draheim. “The Roadmaster chassis is currently being assembled in an out-building in Wakarusa. We haven’t made a decision if we will continue to build chassis.”

Click here to read the entire story.



Baird: 25% RV Sales Bump in March Skewed

May 17, 2013 by · Comments Off on Baird: 25% RV Sales Bump in March Skewed 

Sales of Class C motorhomes to rental agencies may account for the big jump in retail motorhome sales in March.

Editor’s Note: The investment firm of Robert W. Baird & Co. issued a client newsletter after this week’s release by Statistical Surveys Inc. of the summary of retail sales of motorhomes in the month of March. Excerpts from the Baird newsletter follow.

U.S. Motorhome retail +25%. According to data from Statistical Surveys, motorhome (Class A & C) retail increased 25% in March. Class A sales improved 11% while Class C retail jumped 43%. We believe timing of rental units may be creating monthly volatility. Thor motorhome retail grew 31% through two months of the company’s fiscal Q3 (+69% in March, +1.5% in February). Thor reported Q3 preliminary sales May 2. Winnebago motorhome retail improved 1% in its first month of fiscal Q3.

Motorhome retail registrations in the U.S. increased 25% in March. Class A registrations improved 11% while Class C reported registrations rebounded to +43% growth in March after declining 1% in February. We note that the timing of rental fleet sales may be skewing March Class C data higher (after skewing it lower in February). Year-to-date Class C retail improved 27% while Class A demand improved 21%. Industry comparisons become easier in April and May before picking up in the summer.

Solid QTD results for Thor. Thor motorhome retail increased 69% in March after a stagnant February (+1.5%) – we believe the timing of rental fleet units may have contributed to the monthly volatility. Through the first two months of Thor’s fiscal Q3, the company’s U.S. motorhome demand improved 31% – a result that may dampen fears of an excessive inventory build after the weak February retail report and Thor’s solid preliminary sales report. We model Thor North American retail growth of 20% in fiscal Q3.

Winnebago. Winnebago U.S. motorhome retail increased just 1% in March. We model Winnebago North American retail growth at 20% for the May quarter. We remain comfortable with our forecast, noting the early stage of the quarter, frequent upward data revisions, and expectation for additional retail reports prior to Winnebago’s quarterly report.


Winnebago Begins Roadside Assist Program

May 13, 2013 by · Comments Off on Winnebago Begins Roadside Assist Program 

Winnebago Industries Inc. today (May 13) announced a new 24/7 Premium Roadside Assistance Program for the company’s towable RVs.

Beginning on the new 2014 Winnebago and SunnyBrook model vehicles now being introduced, Winnebago Industries Towables will provide every new towable owner with a complimentary one-year membership in the 24/7 Premium Roadside Assistance program that covers such items as lock-out service, fuel delivery and flat tire changes for their RV, according to a news release.

Backed by Coach-Net, a North American roadside assistance service provider network, even their tow vehicle is covered when towing a Winnebago or SunnyBrook travel trailer or fifth-wheel.



Report: Thor, Winnebago Outperform Industry

April 29, 2013 by · Comments Off on Report: Thor, Winnebago Outperform Industry 

Editor’s Note: Robert W. Baird & Co. issued a client newsletter after last week’s release by the Recreation Vehicle Industry Association (RVIA) of its March wholesale RV shipments report. Portions of the Baird newsletter follow.

March RV shipments up 3%. Wholesale shipments improved 3% in March, led by strong growth in motorhomes. Motorhome (Class A and C) shipments jumped 12.5% while towable (travel trailer and fifth-wheel) shipments increased 2.7%. The growth pushed March shipments to their highest levels since prior to the recession. Year-to-date, Class A and C shipments were up 25%, while travel trailer and fifth-wheel shipments were up 11%.

Towable (TT and 5W) shipments up 3%. Shipments improved 3% in the main towable categories. Travel trailer shipments increased 5%, while fifth-wheel shipments declined 3% during the month. Through March, the main towable categories were up 11% in 2013, with travel trailer shipments up 13% and fifth-wheel shipments up 4%.

Motorhome (A and C) shipments up 12.5%. Motorhome (A and C) shipments improved 12.5% in March. Class A and Class C shipments both increased 12.5% during the month. Comparisons remain relatively easy through June, before becoming more difficult during the second half of the year. So far in 2013, motorhome shipments are up 25%, with Class A shipments up 21% and Class C shipments up 30%.

Thor. March marks the second month of Thor’s fiscal Q3. We stress that shipment data for specific manufacturers is not available, so comparing Thor estimate to industry data requires certain assumptions regarding market share and shipments for the remainder of the quarter. Nonetheless, we project Thor towable shipments will increase 10% in the April quarter, which is ahead of the 3% industry shipment pace for two months of Thor’s quarter — suggesting Thor needs a combination of a strong April or share gains to achieve our estimate. We model Thor motorhome shipments up 50% versus the 22% industry pace.

Winnebago. March marks the first month of Winnebago’s fiscal Q3. Again, RVIA shipment data may differ from Winnebago data due to a number of factors. Still, we project Winnebago motorhome shipments will increase 33%, ahead of the 12.5% industry pace for the first month of Winnebegao’s quarter — but it is early.

Report: Winnebago Q2 Market Share is Growing

March 29, 2013 by · Comments Off on Report: Winnebago Q2 Market Share is Growing 

Editor’s Note: Following this week’s release of second quarter financial results by Winnebago Industries Inc., the investment firm of Robert W. Baird & Co. issued a client newsletter. Excerpts from the Baird newsletter follow. Winnebago is a leading manufacturer of motorhomes and towables and an iconic brand in the recreation vehicle market.

Raising price target to $22. Winnebago delivered another impressive quarter, highlighted by strong retail growth, a huge backlog and better profit margins. Big picture, we maintain a bullish fundamental outlook as evaporating negative equity fuels consumer spending and confident dealers restock depleted inventory. Meanwhile, Winnebago is gaining (market) share. Fundamentally, we see the potential for earnings power near $2.00, but believe shares fully reflect the opportunity and see better value elsewhere within the consumer discretionary space.

Robust recovery continues to unfold. Winnebago reported another terrific quarter. The company is taking share as consumer demand for RVs builds. Confident dealers are rebuilding depleted inventory, fueling robust orders and a strong backlog. Meanwhile, supply constraints and popular products have allowed Winnebago to capture full value on shipments (unlike the chronic discounting plaguing the towable market).

Highlights include:

  • Revenue. Revenue surged 35%, constrained somewhat by capacity limitations.
  • Retail. Implied motorhome retail jumped 23%, essentially in line with our 25% forecast.
  • Inventory. Dealer inventory remains lean, implying room for a re-stocking effect.
  • Backlog. The motorhome backlog surged 174%, more than doubling our forecast.
  • Confidence. Dealer confidence remains high, supporting more orders.
  • Margin. Reduced pressure to discount and better leverage on higher volumes are enhancing margin.
  • Earnings Per Share. EPS of $0.22 exceeded our $0.17 expectation.

Earnings power scenarios. With shares surging 110% in the last 12 months, investors clearly anticipate a robust recovery. In that context, we see the potential for Winnebago to earn $2.00 on 8,000 motorhome shipments, assuming 8% EBIT margins and a small contribution from towables – but a lot has to fall into place including a robust and sustained retail recovery, significant dealer restocking, and ongoing margin expansion. We raised our EPS estimates to $1.00 on 6,309 motorhomes (F2013) and $1.20 on 6,689 shipments (F2014).

Raised target to $22. We believe fundamentals support the rally in Winnebago shares as negative equity evaporates and dealers restock inventory – but encourage investors to weigh incremental investment against potential earnings power and alternatives in the consumer discretionary sector. History also suggests fear will return to the market (tax policy, government debt, slow economic growth, gas prices), which could create a better opportunity to add.

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