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Category: Stock Market and Darden Restaurants
Date: 24 December 2019 Stock Price: $53.27 We take a look at the 1st quarter earnings release of their 2020 fiscal year of Winnebago Industries, a manufacturer of outdoor lifestyle products used primarily in leisure travel and outdoor recreation activities.
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About Winnebago
Winnebago Industries, Inc. is a leading U.S. manufacturer of outdoor lifestyle products under the Winnebago, Newmar, Grand Design, and Chris-Craft brands, which are used primarily in leisure travel and outdoor recreation activities. The Company builds quality motorhomes, travel trailers, fifth wheel products, and boats. Winnebago Industries has multiple facilities in Iowa, Indiana, Oregon, Minnesota, and Florida. The Company's common stock is listed on the New York Stock Exchange and trades under the symbol WGO
Overview of Winnebago's 1st quarter 2020 earnings report
The data below refers to the latest quarter unless specified otherwise:
- Net revenues: $548.458 million (up from $493.648 million from the same quarter of the previous year)
- Net revenues increased by 11.1% over the last 12 months
- Cost of goods sold: $509.845 million (up from $422.625 million for the same quarter of the previous year)
- Cost of goods sold increased by 20.6% over the last 12 months
- Some margin pressure for the group as net revenues grew at a pace a lot slower than that of the cost of the goods sold
- Net income: $14.068 million (down from $22.161 million for the same quarter of the previous year)
- Net income per share: $0.44 (down from $0,70 for the same quarter of the previous year)
- Net income per share: $0.44 (down from $0,70 for the same quarter of the previous year)
- Diluted shares in issue: 32.267 million (up from 31.814 million for the same quarter of the previous year)
- Cash and cash equivalents: $101.328 million
- Cash and cash equivalents per share: $3.15
- Cash and cash equivalents makes up 5.9% of Winnebago's market capital
- Cash and cash equivalents makes up 6.5% of Winnebago's total assets
- Inventories: $263.333 million
- Inventories makes up 16.9% of Winnebago's total assets
- Stockholders equity in Winnebago: $785.609 million
- Stockholders equity per share: $24.34
- Winnebago's is trading at 2.18 times its stockholders equity per share which is well outside the expected range of between 2 and 4 times that most firms tend to trade at.
- Cash generated from operations: $79.033 million
- Cash generated from operations per share: $2.44
Winnebago's management commentary on their 1st quarter 2020 earnings
FOREST CITY, Iowa, Dec. 20, 2019 (GLOBE NEWSWIRE) -- Winnebago Industries, Inc. (NYSE:WGO), a leading outdoor lifestyle product manufacturer, today reported financial results for the Company's first quarter Fiscal 2020.
President and Chief Executive Officer Michael Happe commented, “We delivered strong consolidated results for the first quarter of Fiscal 2020 as we continued to make progress in transforming Winnebago Industries into a premier outdoor lifestyle company. Overall revenue growth remains strong, driven by vibrant Class B sales in our Motorhome segment and another stellar quarter from Grand Design in the Towable segment. These businesses are driving significant market share gains in the RV industry. Our RV retail market share is now 10.8% on a trailing three month basis through October, up 1.7 share points over the prior year period and exceeding our 2020 goal of 10% we established in November, 2017. Our results included approximately three weeks of contribution from the recently acquired Newmar business, the foremost luxury motorhome manufacturer in North America. We are extremely focused on the integration of the Newmar business and ensuring a smooth transition for Newmar's employees, dealers, and end-customers. Our continued growth reflects our competitive position in the RV industry and the resilience of our diversified portfolio, which has positioned us well to deliver solid results despite prevailing industry headwinds. As we look ahead to the balance of Fiscal 2020, we remain focused on authentically differentiating ourselves from the competition around quality, customer service and innovation. I want to thank all of our Winnebago Industries employees for their hard work during the quarter and for their unwavering commitment to our ambitious goal of transforming Winnebago Industries into a stronger enterprise. I also want to welcome the Newmar employees to the Winnebago Industries family and thank them for their hard work now and into the future as the integration process ramps up.”
President and Chief Executive Officer Michael Happe commented, “We delivered strong consolidated results for the first quarter of Fiscal 2020 as we continued to make progress in transforming Winnebago Industries into a premier outdoor lifestyle company. Overall revenue growth remains strong, driven by vibrant Class B sales in our Motorhome segment and another stellar quarter from Grand Design in the Towable segment. These businesses are driving significant market share gains in the RV industry. Our RV retail market share is now 10.8% on a trailing three month basis through October, up 1.7 share points over the prior year period and exceeding our 2020 goal of 10% we established in November, 2017. Our results included approximately three weeks of contribution from the recently acquired Newmar business, the foremost luxury motorhome manufacturer in North America. We are extremely focused on the integration of the Newmar business and ensuring a smooth transition for Newmar's employees, dealers, and end-customers. Our continued growth reflects our competitive position in the RV industry and the resilience of our diversified portfolio, which has positioned us well to deliver solid results despite prevailing industry headwinds. As we look ahead to the balance of Fiscal 2020, we remain focused on authentically differentiating ourselves from the competition around quality, customer service and innovation. I want to thank all of our Winnebago Industries employees for their hard work during the quarter and for their unwavering commitment to our ambitious goal of transforming Winnebago Industries into a stronger enterprise. I also want to welcome the Newmar employees to the Winnebago Industries family and thank them for their hard work now and into the future as the integration process ramps up.”
Balance Sheet and Cash Flow
As of November 30, 2019, the Company had total outstanding debt of $463.5 million ($560.0 million of debt, net of convertible note discount of $84.0 million, and debt issuance costs of $12.5 million) and working capital of $297.8 million. Cash flow from operations was $79.0 million in the first quarter of Fiscal 2020, reflecting a strong increase of 45.9%, or $24.9 million, from the same period in Fiscal 2019.
Quarterly Cash Dividend
On December 18, 2019, the Company’s board of directors approved a quarterly cash dividend of $0.11 per share payable on January 29, 2020, to common stockholders of record at the close of business on January 15, 2020.
Mr. Happe continued, “We are eager to build upon the tremendous progress we’ve made towards enhancing our position as a leader in premium outdoor lifestyle solutions. The acquisition of Newmar is pivotal in increasing our competitiveness and we are excited about the accretion Newmar brings to our portfolio - culturally, strategically and financially. We enter Fiscal 2020 with a stronger business that now includes four of the most iconic brands in the outdoor lifestyle arena - Winnebago, Grand Design, Newmar, and Chris-Craft. The benefits of having an expanded and more diversified product portfolio have translated to more consistent earnings results and are driving incremental growth and market share expansion in our business. We continue to monitor the health of the RV and marine channels and the confidence of consumers. By keeping our teams focused on delivering against our golden threads - superior quality, valued innovation, outstanding customer service - we are confident that Winnebago Industries will continue to outperform the marketplace and maximize value for our shareholders and customers in fiscal year 2020.”
As of November 30, 2019, the Company had total outstanding debt of $463.5 million ($560.0 million of debt, net of convertible note discount of $84.0 million, and debt issuance costs of $12.5 million) and working capital of $297.8 million. Cash flow from operations was $79.0 million in the first quarter of Fiscal 2020, reflecting a strong increase of 45.9%, or $24.9 million, from the same period in Fiscal 2019.
Quarterly Cash Dividend
On December 18, 2019, the Company’s board of directors approved a quarterly cash dividend of $0.11 per share payable on January 29, 2020, to common stockholders of record at the close of business on January 15, 2020.
Mr. Happe continued, “We are eager to build upon the tremendous progress we’ve made towards enhancing our position as a leader in premium outdoor lifestyle solutions. The acquisition of Newmar is pivotal in increasing our competitiveness and we are excited about the accretion Newmar brings to our portfolio - culturally, strategically and financially. We enter Fiscal 2020 with a stronger business that now includes four of the most iconic brands in the outdoor lifestyle arena - Winnebago, Grand Design, Newmar, and Chris-Craft. The benefits of having an expanded and more diversified product portfolio have translated to more consistent earnings results and are driving incremental growth and market share expansion in our business. We continue to monitor the health of the RV and marine channels and the confidence of consumers. By keeping our teams focused on delivering against our golden threads - superior quality, valued innovation, outstanding customer service - we are confident that Winnebago Industries will continue to outperform the marketplace and maximize value for our shareholders and customers in fiscal year 2020.”
Winnebago (NYSE:DRI) stock price history
The image below, obtained from Google, shows the stock price history of Winnebago (NYSE: WGO) over the last 5 years. And it has been a very good time for Winnebago stockholders. 5 years ago the stock of Winnebago was trading around $23.20 and its currently trading at $53.27. That's a very strong 129.6% return over the last 5 years.
The stock of Winnebago is trading at very close to its 52 week high of $53.97 and is fas away from its 52 week low of $21.47. This to us is a clear indication that the short term sentiment and momentum of Winnebago is very positive at this point in time.
The stock of Winnebago is trading at very close to its 52 week high of $53.97 and is fas away from its 52 week low of $21.47. This to us is a clear indication that the short term sentiment and momentum of Winnebago is very positive at this point in time.
Recent coverage of Winnebago
The extract below covers the latest earnings report of Winnebago as obtained from Zacks.com
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on December 20, 2019, Winnebago reported EPS of $0.73 versus consensus estimate of $0.7 while it beat the consensus revenue estimate by 10.94%. For the current fiscal year, Winnebago is expected to post earnings of $4.57 per share on $2.64 billion in revenues. This represents a 33.14% change in EPS on a 33% change in revenues. For the next fiscal year, the company is expected to earn $5.03 per share on $2.82 billion in revenues. This represents a year-over-year change of 9.83% and 6.89%, respectively.
Valuation Metrics
Winnebago may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself. On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Read the full article here
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on December 20, 2019, Winnebago reported EPS of $0.73 versus consensus estimate of $0.7 while it beat the consensus revenue estimate by 10.94%. For the current fiscal year, Winnebago is expected to post earnings of $4.57 per share on $2.64 billion in revenues. This represents a 33.14% change in EPS on a 33% change in revenues. For the next fiscal year, the company is expected to earn $5.03 per share on $2.82 billion in revenues. This represents a year-over-year change of 9.83% and 6.89%, respectively.
Valuation Metrics
Winnebago may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself. On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Read the full article here
Winnebago (NYSE: WGO) latest stock valuation
So based on the earnings report of Winnebago (NYSE:WGO) what do we value Winnebago stock at? Based on the earnings reported by the group our valuation model provides a target (full value) price for Winnebago Industries at $48.30 a stock. We therefore believe the stock of Winnebago is overvalued
We usually suggest long term fundamental and value investors look to enter the stock at least 10% below our target price, which in this case is $48.30 Therefore we believe a good entry point into the stock of Winnebago would be at $43.50 or below
We expect that the stock of Winnebago Industries will pull back from its current levels to levels closer to our target price (full value price) in coming weeks and months.
We usually suggest long term fundamental and value investors look to enter the stock at least 10% below our target price, which in this case is $48.30 Therefore we believe a good entry point into the stock of Winnebago would be at $43.50 or below
We expect that the stock of Winnebago Industries will pull back from its current levels to levels closer to our target price (full value price) in coming weeks and months.
Next earnings release of Winnebago
It is expected that Winnebago will release their 2nd quarter 2020 earnings report in late March 2020