8 December 2022
8 December 2022, Comments Comments Off on THOR Industries announces first quarter fiscal 2023 results
THOR Industries announces first quarter fiscal 2023 results

THOR Industries, Inc. has released its financial results for its first fiscal quarter ended October 31, 2022 and given its full-year fiscal 2023 net sales guidance with an estimate of between $11.5 billion to $12.5 billion.

Consolidated net sales were $3.11 billion in the first quarter of fiscal 2023, a decrease of 21.5% compared to $3.96 billion in the first quarter of fiscal 2022 but an increase of 22.5% from $2.54 billion in the same quarter of fiscal year 2021.

The Company announced full-year fiscal 2023 net sales guidance .

“Following a record fiscal 2022, the RV market has been negatively affected by macroeconomic headwinds impacting our consumers and independent dealers. Given those conditions, our teams performed exceedingly well, exhibiting the value of their experience in navigating shifting markets, delivering net sales of $3.11 billion, consolidated gross profit margin of 15.7% and net income attributable to THOR of $136.2 million,” said Bob Martin, President and CEO of THOR Industries.

“Our first quarter results reflect the flexibility and disciplined execution of our teams to respond to dynamic market conditions. We proactively adjusted production levels of towable products to balance wholesale production with the pace of softening retail sales while making continued progress in restocking inventory levels of motorized product. Aligning our production with the shifting retail environment has been, and will continue to be, key to our success in the temporary softening of our market. As we have during prior periods of unfavorable retail environments, during the quarter we took advantage of our variable cost model to bring our cost structure in line with current market conditions.

“THOR has a proven track record of demonstrating resilience in economic down cycles, and we expect fiscal 2023 results to be no different. To be sure, the retail environment is being impacted by inflation and monetary policy driving higher interest rates. THOR is built to perform in these shifting conditions, with an unparalleled track record within the industry. The current environment is challenging, but it does not diminish the widely-shared, long-term optimism for the industry or for THOR. Successful execution in today’s environment is fundamental to driving long-term returns to our shareholders. Given that long-term independent dealer sentiment and consumer interest in the RV lifestyle remains positive, we remain confident in our ability to generate long-term value for our customers and shareholders,” said Martin.

North American Towable RV net sales were down 41.2% for the first quarter of fiscal 2023 compared to the prior-year period. The decrease was driven primarily by a 52.8% decrease in unit shipments, partially offset by net selling price increases and a change in product mix.

North American Motorized RV net sales increased 21.5% the first quarter of fiscal 2023 compared to the prior-year period. The increase in motorized net sales for the quarter was driven primarily by an increase in unit shipments of 11.1% due to continuing dealer restocking of certain motorized products, and net selling price increases, partially offset by changes in product mix.

European RV net sales decreased 20.3% for the first quarter of fiscal 2023 compared to the prior-year period, driven by a 19.3% decrease in unit shipments due primarily to continuing chassis supply constraints. The decrease due to the foreign exchange rate decline of 14.4% was essentially offset by net selling price increases and product mix changes.

“Our strong first quarter performance reflects the value created by the strategic initiatives the management teams throughout THOR have implemented over a multi-year period which are dedicated to improving sustainable profitability,” said Todd Woelfer, Senior Vice President and Chief Operating Officer.

“Within our North American Towables segment, our operating teams prudently reduced production in advance of our North American Dealer Open House, held in late September 2022, to position our independent dealers’ inventory levels favorably as they entered the new model year. These actions were a key driver to our strong first quarter performance despite the macroeconomic conditions. Within our North American Motorized and European segments, ongoing pricing actions and process improvements helped offset material cost pressures as we continued to make progress in restocking dealer inventory levels. We have been more successful in restocking our North American Motorized segment than we have been in Europe where we face a higher level of ongoing chassis supply challenges. As we enter the traditionally slower winter retail season, we will remain disciplined relative to market conditions impacting each of our individual operating segments,” continued Woelfer.

“In addition to managing through the near-term environment, we continue to make progress against long-term growth initiatives related to automation, innovation, supply chain and aftermarket. Airxcel has organically invested to expand its operations and will be offering a number of new products in the coming calendar year while a key strategic partnership with Harbinger was announced which will further our innovation efforts as we advance our eMobility strategy. We have also made significant steps towards executing our aftermarket strategy and look forward to begin realizing on that strategy this fiscal year. These highlighted initiatives will not only strengthen the long-term performance and earnings power of our company, but they also demonstrate our commitment to being the global leader in the RV industry as we drive to deliver an ever-improving experience for our end consumers,” added Woelfer.

“In the first quarter of fiscal 2023, we generated cash flow from operations of $94.0 million, which allowed us to reinvest into the business, further strengthen our balance sheet and return capital to shareholders during the quarter. In October, we announced a 5% increase in our regular quarterly dividend, which marked our 13th consecutive year of increasing our dividend. In addition, we remain focused on reducing our overall debt with a paydown of $15.0 million on our asset-based credit facility and principal payments of $12.4 million on our term-loan credit facility during the quarter. Also within the quarter, we repurchased $25.4 million of our common stock, representing 338,733 shares at an average repurchase price of $75.01. Our ability to generate cash from operations, even in challenging market conditions, empowers us to continue to execute on our long-term strategies which are designed to separate THOR from its competition and drive long-term value to our shareholders,” said Colleen Zuhl, Senior Vice President and Chief Financial Officer.

“Looking ahead, we fully expect fiscal 2023 to be a dynamic and challenging operating environment given the current macroeconomic conditions and future uncertainties that exist. While we do not expect to be immune from these challenges, THOR has an unrivaled and proven track record within the RV industry of successfully managing through economic cycles and coming out of industry downturns as a stronger company. We remain confident that THOR’s proven variable cost model, most recently demonstrated at the depth of the pandemic in fiscal 2020, along with the strength and experience of our management teams, will position THOR to demonstrate its resilience once again in fiscal 2023. At the same time, our strong balance sheet and cash flow generation profile allows us to invest in our strategic growth initiatives that will drive sustainable long-term growth for the benefit of our consumers and shareholders,” added Martin.