28 September 2022
28 September 2022, Comments Comments Off on THOR Industries achieves record fourth quarter and year end results
THOR Industries achieves record fourth quarter and year end results

THOR Industries, Inc. has announced record financial results for its fourth quarter and year ended July 31, 2022. Net sales for the fourth quarter were $3.82 billion (+6.4%) and for the fiscal year 2022 totalled $16.31 billion (+32.4%).

“Our fourth quarter results capped off a record-breaking fiscal year for THOR Industries. Our financial results were supported by outstanding performance across our portfolio of leading brands. For fiscal 2022, net sales eclipsed the $16 billion mark and net income attributable to THOR exceeded $1 billion for the first time in the Company’s history,” said Bob Martin, President and CEO of THOR Industries.

“Responding to record post-pandemic demand that accelerated a secular shift in our market since the middle of 2020, our teams did a remarkable job of navigating labor and supply chain constraints to deliver record unit shipments in fiscal 2022 in order to meet strong end demand and restock dealer inventory. At July 31, 2022, North American independent dealer inventory levels of most towable products were fully restocked while independent dealer inventories of motorized and European products remained below optimal levels.

“During the fiscal fourth quarter, and consistent with our previously announced expectations, we experienced a softening in towable order activity due to successful dealer restocking of towable units combined with lower consumer confidence and macroeconomic uncertainty, which adversely impacted end consumer demand. In response to these conditions, our teams proactively reduced production levels of towable products to keep dealer inventory levels balanced and we remain disciplined in aligning wholesale production with retail demand. Despite the near-term macroeconomic uncertainty, our variable cost structure and the experienced leadership across our enterprise enabled us to successfully manage through the changing market conditions, and our fourth quarter results demonstrate that success,” said Martin.

Fourth-Quarter Financial Results

Consolidated net sales were $3.82 billion in the fourth quarter of fiscal 2022, compared to $3.59 billion in the fourth quarter of fiscal 2021. The increase in consolidated net sales was largely impacted by the increase in the average sales price of our units, partially offset by a decrease in units sold. The addition of Airxcel, acquired in September 2021, accounted for $129.6 million of the increase in net sales for the fourth quarter of fiscal 2022, net of intercompany sales.

Consolidated gross profit margin increased 90 basis points to 17.5% for the fourth quarter of fiscal 2022, from 16.6% in the corresponding period a year ago driven by margin-focused operational improvements and management’s continued discipline to maintain a low discount environment.

Net income attributable to THOR Industries and diluted earnings per share for the fourth quarter of fiscal 2022 were $280.9 million and $5.15, respectively, compared to $230.3 million and $4.12, respectively, for the prior-year period.

Fiscal Year 2022 Financial Results

Net sales for fiscal year 2022 were $16.31 billion compared to $12.32 billion for fiscal year 2021, an increase of 32.4%. The increase in consolidated net sales is primarily due to the increase in product demand, selling price increases to offset known and anticipated material cost increases, and the impact of acquisitions. The addition of Airxcel, acquired in September 2021, accounted for $501.1 million of the $3.99 billion increase in net sales, or 4.1% of the 32.4% increase. In addition, the acquisition of the Tiffin Group, acquired on December 18, 2020, accounted for $505.5 million of the $3.99 billion increase, or 4.1% of the 32.4% increase, as fiscal 2022 includes twelve months of operations compared to six and one-half months in fiscal 2021.

Net income attributable to THOR in fiscal year 2022 was $1.14 billion, or $20.59 per diluted share, compared to net income attributable to THOR of $659.9 million, or $11.85 per diluted share, in fiscal year 2021.

The Company’s annual effective income tax rate for fiscal 2022 was 22.0% compared with 21.8% for fiscal 2021. The primary reason for the increase relates to the jurisdictional mix of foreign and domestic pretax income between the comparable periods.

Net cash provided by operating activities for fiscal 2022 was $990.3 million compared to $526.5 million in fiscal 2021. The increase in net cash provided by operating activities for fiscal 2022 was driven by an increase in net income, partially offset by higher working capital levels, which were impacted by an increase in inventory, including ongoing supply constraints causing work in process and other inventory categories to increase. The Company leveraged its strong net cash from operations to deploy capital in a disciplined and balanced approach, utilizing cash generated to reinvest in the business, pay its regular dividend, reduce its debt obligations, repurchase shares of its common stock and fund strategic acquisitions.

Segment Results

North American Towable RVs

($ in thousands)Three Months Ended July 31, % Fiscal Years Ended July 31, %
  2022  2021 Change  2022  2021 Change
Net Sales$1,795,886 $1,730,601 3.8  $8,661,945 $6,221,928 39.2 
Gross Profit$273,136 $308,928 (11.6) $1,512,298 $1,020,908 48.1 
Gross Profit Margin % 15.2  17.9    17.5  16.4   
Income Before Income Taxes$181,662 $202,212 (10.2) $1,050,536 $658,964 59.4 
 As of July 31, %
($ in thousands) 2022  2021 Change 
Order Backlog$        2,571,009         $        9,284,229                 (72.3)

North American Motorized RVs

($ in thousands)Three Months Ended July 31, % Fiscal Years Ended July 31, %
  2022  2021 Change  2022  2021 Change
Net Sales$1,024,768 $823,148 24.5  $3,979,647 $2,669,391 49.1 
Gross Profit$184,146 $106,247 73.3  $654,052 $345,755 89.2 
Gross Profit Margin % 18.0  12.9     16.4  13.0   
Income Before Income Taxes$127,376 $62,289 104.5  $436,604 $202,057 116.1 
 As of July 31, %
($ in thousands) 2022  2021 Change 
Order Backlog$        3,436,629         $        4,014,738                 (14.4)

European RVs

($ in thousands)Three Months Ended July 31, % Fiscal Years Ended July 31, %
  2022  2021 Change  2022  2021 Change
Net Sales$806,724 $969,888 (16.8) $2,887,453 $3,200,079 (9.8)
Gross Profit$152,569 $153,678 (0.7) $409,987 $440,855 (7.0)
Gross Profit Margin % 18.9  15.8    14.2  13.8  
Income Before Income Taxes$74,868 $67,873 10.3  $87,116 $116,576 (25.3)
 As of July 31, %
($ in thousands) 2022  2021 Change 
Order Backlog$        2,753,602         $        3,559,097                 (22.6)

Management Commentary

“During the fourth quarter of fiscal 2022, we delivered solid results despite reduced production volumes for North American towable products and ongoing chassis supply constraints which continued to constrain motorized production volumes. We achieved yet another quarter of year-over-year net sales and earnings growth in addition to delivering consolidated gross profit margin of 17.5%. These results demonstrate strong operational execution and the resiliency of our business model, which enables THOR to outperform across the economic cycle,” said Todd Woelfer, Senior Vice President and Chief Operating Officer.

“Within our North American Towables segment, we were proactive in dialing back towable production in the fourth quarter to align with softening demand through the reduction of daily production rates, the shortening of production schedules and the temporary consolidation of certain production facilities. We continued to maintain consistent controls on our cost structure and improve labor efficiencies to partially offset the current competitive pricing environment for towable products. Within our North American Motorized segment, a focus on product introductions allowed us to approach 50% market share for the first six months of calendar 2022. In fact, we have gained market share in both our North America Towables and North American Motorized segments in calendar 2022 and now hold market share leading positions in every North American RV product category in which we participate. Lastly, within our European segment, despite net sales being down due to continued chassis supply challenges by 16.8% on a reported basis and down 4.4% on a constant currency basis, we undertook strong pricing actions to help offset material cost pressures and drive gross margin improvement in the quarter. As an enterprise, our performance continues to match our strategic focus of core improvement and continues to outperform expectations,” continued Woelfer.

“Our record fiscal year operating results generated cash flow from operations of $990.3 million in fiscal 2022, which provided us funding to reinvest into the business, further strengthen our balance sheet through debt paydowns, and return capital to shareholders through dividends and share repurchases. During fiscal 2022, we continued to reduce our overall debt with principal payments of $332.9 million on our Term Loan and repurchased $165.1 million of our common stock. In June 2022, the Board of Directors approved an additional authorization for share repurchases and as a result, as of July 31, 2022, the remaining amount of the common stock that may be repurchased under the Company’s buyback program is $533.2 million,” said Colleen Zuhl, Senior Vice President and Chief Financial Officer.

“Our balance sheet remains in excellent condition, as we ended the year with total liquidity of $1.19 billion, including cash and cash equivalents of $311.6 million and $874.0 million available under our ABL. We believe our strong liquidity and strong cash generation profile will allow us to operate from a position of financial strength going forward as we navigate near-term market dynamics,” added Zuhl.


“As we enter our fiscal 2023, there remains a level of uncertainty in respect to near-term economic growth and consumer demand. While we navigate this volatility, our experienced operating management teams and proven business model give us a distinct advantage in an ever-changing market. We remain confident in the resiliency of our business model based on our past performance over previous economic cycles, the strength and experience of our management teams, and our discipline to remain focused on what we can control. Within our North American Towables segment, we are focused on assisting our independent dealers in maintaining appropriate inventory levels of THOR products. In advance of Dealer Open House, our operating teams proactively adjusted production to ensure wholesale shipments were appropriately aligned with retail sales in order to position dealers’ inventories favorably as they enter the new model year. Within our North American Motorized and European segments, dealer inventory levels remain near historically low levels, and the need to restock channel inventory will serve as a tailwind in fiscal 2023. We also remain committed to providing new and innovative products across the portfolio, and we are excited to hear the feedback from our dealer partners coming out of this year’s Dealer Open House,” continued Martin.

“While we successfully manage through the short-term economic uncertainties, we continue to manage the business for the long term. We continue to pursue and build out our automation, innovation and aftermarket strategies in order to remove industry friction points and enhance the RV lifestyle and experience for the end consumer. Our continued focus on making the RV lifestyle attractive to consumers provides a foundation for the long-term growth trajectory of the RV industry. Our long-term focus, combined with our size and scale as the global pure-play leader in the RV industry, positions THOR to outperform the industry in fiscal 2023 and beyond,” added Martin.

Fiscal 2023 Guidance

Going forward, THOR plans to begin providing annual guidance. Due to the concurrent timing of our annual Dealer Open House and year-end earnings release, the Company will provide its annual guidance for the full-year fiscal 2023 following the conclusion of the Dealer Open House and in conjunction with our first quarter fiscal 2023 earnings release.

Supplemental Earnings Release Materials

THOR Industries has provided a comprehensive question and answer document, as well as a PowerPoint presentation, relating to its quarterly results and other topics.

To view these materials, go to http://ir.thorindustries.com

About THOR Industries, Inc.

THOR Industries is the sole owner of operating companies which, combined, represent the world’s largest manufacturer of recreational vehicles.

For more information on the Company and its products, please go to www.thorindustries.com.