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RV maker Winnebago rallies after fiscal 2Q profit beats estimates

The maker of recreational vehicles posted earnings of $0.68 per diluted share, which beat the $0.59 average estimate of analysts

A Winnebago on the road
The RV company says it outpaced the industry and widened margins

Winnebago Industries Inc (NYSE:WGO) rose Monday after reporting second-quarter earnings that beat the consensus of Wall Street analysts.

For the three months ended February 23,  the maker of recreational vehicles posted earnings of $0.68 per diluted share on revenue of $432.69 million, which was down 7.6% from a year earlier. The average forecast of analysts was for earnings of $0.59 on revenue of $461.92 million.

Shares of Winnebago were up 3.1% to $30 in Monday’s pre-market trading.

READ: Winnebago's fiscal 1Q sales growth drives earnings beat

Gross profit margin increased 1 percentage point during the quarter. A boost from revenue mix, pricing and motorhome segment operational improvements was partly offset by inflationary cost pressures and heightened dealer incentives, the Forest City, Iowa, company said.

“Although company sales decreased modestly, we continued to materially outpace the industry and expand our year-over-year margins, primarily due to the improved product vitality and profitability of our motorhome segment and the continued strength and momentum of our Towables segment,” CEO Michael Happe said in a statement.

Revenue for the motorhome segment was $164.7 million, down 17.3% from a year earlier, driven primarily by a decrease in Class A and Class C unit sales and partially offset by an increase in Class B unit sales.

Towable segment

The towable segment posted revenue of $250.7 million for the second quarter, down 5.9% from the prior year, driven by dealer network efforts to reduce inventory levels and partially offset by pricing. The company said it had “very strong” shipments in the prior year.

As of February 23, the company had total outstanding debt of $276.9 million and working capital of $175.3 million. The debt-to-equity ratio decreased to 48.5% from 54.5% as of August 25, 2018, and the ratio of net debt to adjusted  earnings before interest, taxes, depreciation and amortization was 1.6 times at the end of the quarter.

Contact Dennis Fitzgerald at [email protected]

Quick facts: Winnebago Industries

Price: 41.3 USD

NYSE:WGO
Market: NYSE
Market Cap: $1.31 billion
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