Winnebago Industries (NYSE:WGO) shares went into reverse on Wednesday after the recreational vehicle (RV)-maker reported a sharper-than-expected drop in profits for the fiscal first quarter which ended on November 25, 2023,
Its adjusted earnings per share decreased by 48.8% from the year-ago quarter to $1.06, missing estimates of $1.20.
Revenue fell 19.9% year over year from $952.2 million to $763 million. This was ahead of the analyst expectation of $727.6 million.
Winnebago attributed the decline in revenue to market conditions, product mix and higher discounts compared to the previous year, partially offset by carryover price increases related to higher motorized chassis costs.
“Winnebago Industries (NYSE:WGO)’ first quarter results underscore the resilience of our diversified portfolio and variable cost structure in navigating a sales environment influenced by challenging retail trends and intentional inventory management by dealers,” the company’s CEO Michael Happe said in a statement.
“We remain optimistic that the current cycle of RV dealer destocking is approaching its conclusion, and that market conditions in both retail and wholesale could begin to see improvement in mid to late calendar year 2024.”
Winnebago shares traded 4.9% lower at US$71.49 shortly after Wednesday’s opening bell.