Shares of Winnebago Industries plunged nearly 10% on Wednesday after the recreational vehicle maker—best known for its travel campers—slashed its full-year outlook, citing persistent pressure on consumer demand from mounting macroeconomic headwinds and elevated borrowing costs. The RV industry downturn, now well entrenched, has been underway since the Federal Reserve began hiking interest rates in early 2022.
"Growing macroeconomic uncertainty led to a notable downshift in RV activity from consumers and dealers as the third quarter progressed," Winnebago CEO Michael Happe told Wall Street analysts on a call yesterday.
Happe told the analysts that "these challenges are likely to continue through the remainder of the calendar year as anticipated by the RV Industry Associations."
He said that for 2025, "We are lowering our industry forecast for wholesale RV shipments to a range of 315k to 335k units, with a midpoint of 325k units." The previous forecast was 320k to 350k units, with a median of 335k units.
The company now expects net revenue between $2.7 billion and $2.8 billion for the year, down from its previous guidance of $2.8 billion to $3 billion. This is compared with an estimate $2.76 billion (Bloomberg Consensus). The company also lowered its adjusted earnings guidance to a range of $1.20 to $1.70 per share, down from $2.75 to $3.75, compared to the estimate of $1.80.
Winnebago is one of the major players in the recreational vehicle space, which was hit hard in a multi-year downturn, mainly due to soaring interest rates during Fed Chair Powell's hiking cycle.
The takeaway for the third fiscal quarter, which ended in May, is that solid performance in the marine and motorhome segments helped offset weakness in the towables segment, although profitability and earnings declined sharply year-over-year.
Winnebago Q3 FY2025 Summary (YoY % Change)
Adjusted EPS: $0.81 (▼28% YoY) — missed estimate of $0.83
Adjusted EBITDA: $46.5M (▼20%) — beat estimate of $45.5M
Operating Income: $30.2M (▼31%) — missed estimate of $31.8M
Net Revenue: $775.1M (▼1.4%) — in line with estimate of $774.8M
Segment Breakdown:
Motorhome: $291.2M (▼2.6%) — beat est. $272.9M
Towables: $371.7M (▼3.8%) — missed est. $401.4M
Marine: $100.7M (▲15%) — beat est. $97.2M
Shares are flat in pre-market trading, but Wednesday's session was a bloodbath—with the stock puking nearly 10% to its lowest level since April 2020. The chart below overlays Winnebago's share price with the Fed's rate-hiking cycle. Note the lagging effect, followed by a sharp selloff as demand collapses under the weight of rising interest rates; in other words, demand falls off a cliff.
First takes by Wall Street analysts were mostly cautious (courtesy of Bloomberg):
CFRA (hold)
"Management's tone was understandably cautious in light of soft consumer discretionary spending and uncertainty surrounding interest rate cuts," analyst Garrett Nelson tells Bloomberg News in an email
"The big question is whether or not US RV sales have bottomed, which will determine the timing of the company's earnings recovery," he adds
Truist (buy, PT $40)
Analyst Michael Swartz says Towable RV share gains headline an "otherwise difficult" 3Q for WGO
"The cat was already out of the bag with regard to the FY3Q miss and incrementally more challenged view of the motorized business (namely, the Winnebago branded business)"
Roth (neutral, PT $37)
Analyst Scott Stember says WGO's adjusted 3Q25 EPS of $0.81 came in above his "tempered" expectations
"WGO formally lowered '25 adjusted EPS guidance to new range of $1.20-$1.70, noting that the company did not update the year when pre-releasing Q3 last month"
BMO Capital (outperform, PT $50)
Analyst Tristan Thomas-Martin says WGO's 3Q EPS of $0.81 came in just ahead of BMO's $0.76 estimate, which was recently lowered following WGO's preliminary release, but within WGO's preliminary range of $0.75 to $0.85
"Management commentary around retail demand remains cautious, and FY2025 guidance was reduced with FY4Q25 implied guidance coming in below the Street but closer to where we believe investors were"
It's a great time for anyone who didn't panic-buy an RV during the Covid boom—heavy discounting is seen at various RV retail chains as inventory builds across the market. As for bottom fishing, WGO... needs an interest rate-cutting cycle for earnings recover. Certainly a stock to add to the watch list.
