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Winnebago Industries’ first quarter results underscore the strength of our unmatched portfolio of leading brands and continued demand from the end consumer for our high quality, innovative outdoor products. The momentum we are seeing across our segments allowed us to capture the full value of our products in the marketplace, while continuing to gain market share "
More About Winnebago Industries
Winnebago Industries, Inc. is a leading North American manufacturer of outdoor lifestyle products under the Winnebago, Grand Design, Chris-Craft, and Newmar 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, Minnesota and Florida. The Company's common stock is listed on the New York Stock Exchange and traded under the symbol WGO
Overview of Winnebago's 1st quarter 2021 earnings report
- Organic RV Market Share Gains Continue, Rising 110 Basis Points on a Trailing Twelve Month Basis
- Quarterly Revenues Up 34.8% Year-Over-Year, Bolstered by Strong End Consumer Demand
- First Quarter Gross Margin Expansion of 390 Basis Points
- Reported Diluted EPS of $1.70;
- Adjusted EPS of $1.69 Up 131.5% Over Prior Year
- Dividend declared: $0.12
- Stockholders equity per share: $25.75
- Record Order Backlogs and Retail Sales Momentum Validate Continued Interest in the Outdoors
Winnebago's management commentary 1st quarter 2021 earnings report
FOREST CITY, Iowa, Dec. 18, 2020 (GLOBE NEWSWIRE) -- Winnebago Industries, Inc. (NYSE: WGO), a leading outdoor lifestyle product manufacturer, today reported financial results for the Company's Fiscal 2021 first quarter.
President and Chief Executive Officer Michael Happe commented, “Winnebago Industries’ first quarter results underscore the strength of our unmatched portfolio of leading brands and continued demand from the end consumer for our high quality, innovative outdoor products. The momentum we are seeing across our segments allowed us to capture the full value of our products in the marketplace, while continuing to gain market share. Our strong profit performance – including significant margin expansion – reflects the hard work and focus of our world-class Winnebago Industries team, which has maintained a commitment to operational excellence and safely manufacturing our products with a steadfast dedication to quality. We especially remain focused on continuing to deliver for our dealer partners, working hard to replenish their inventories, while ensuring strong financial performance and flexibility for both parties during these dynamic times. Interest in the outdoors is not waning and in fact, appears to be strengthening heading into calendar year 2021, and Winnebago Industries is positioned well to maximize value for our employees, end customers, dealers, and shareholders.”
President and Chief Executive Officer Michael Happe commented, “Winnebago Industries’ first quarter results underscore the strength of our unmatched portfolio of leading brands and continued demand from the end consumer for our high quality, innovative outdoor products. The momentum we are seeing across our segments allowed us to capture the full value of our products in the marketplace, while continuing to gain market share. Our strong profit performance – including significant margin expansion – reflects the hard work and focus of our world-class Winnebago Industries team, which has maintained a commitment to operational excellence and safely manufacturing our products with a steadfast dedication to quality. We especially remain focused on continuing to deliver for our dealer partners, working hard to replenish their inventories, while ensuring strong financial performance and flexibility for both parties during these dynamic times. Interest in the outdoors is not waning and in fact, appears to be strengthening heading into calendar year 2021, and Winnebago Industries is positioned well to maximize value for our employees, end customers, dealers, and shareholders.”
Towable
Revenues for the Towable segment were $454.9 million for the first quarter, up 33.3% over the prior year, primarily driven by strong continued end consumer demand for our Grand Design and Winnebago product lines. Segment Adjusted EBITDA was $63.1 million, up 76.5% over the prior year period. Adjusted EBITDA margin of 13.9% increased 340 basis points, primarily due to lower discounts and allowances and operating leverage during the quarter. Backlog increased to 29,659 units, an increase of 313.4% over the prior year period, as dealer inventories have experienced a significant reduction amidst heightened levels of consumer retail demand since the summer of 2020.
Motorhome
Revenues for the Motorhome segment were $322.4 million for the first quarter, up 42.7% from the prior year, driven by the addition of Newmar and strong Winnebago Class B products. Excluding Newmar, segment revenues were $203.6 million, an increase of 7.0% over the prior year period. Segment Adjusted EBITDA was $30.3 million, up 225.2% from the prior year. Adjusted EBITDA margin of 9.4% increased 530 basis points driven by pricing actions, including lower discounts and allowances, productivity initiatives and operating leverage. Backlog increased to 13,217 units, an increase of 402.4% over the prior year period, as dealer inventories have experienced a significant reduction amidst heightened levels of consumer retail demand in the last six months.
Balance Sheet and Cash Flow
As of November 28, 2020, the Company had total outstanding debt of $516.5 million ($600.0 million of debt, net of convertible note discount of $70.9 million, and net of debt issuance costs of $12.5 million) and working capital of $475.0 million. Cash flow from operations was an outflow of $2.7 million in the first quarter of Fiscal 2021, as inventory levels have increased in response to very strong dealer orders and heightened backlog position.
Quarterly Cash Dividend
On December 16, 2020, the Company’s board of directors approved a quarterly cash dividend of $0.12 per share payable on January 27, 2021, to common stockholders of record at the close of business on January 13, 2021.
Mr. Happe continued, “During the first quarter we unveiled a refreshed Winnebago Industries enterprise brand, that reflects our status as a fast-growing company with a portfolio of premium outdoor brands. While proud of our iconic flagship Winnebago-brand RVs, the parent organization, Winnebago Industries, also reflects our pride in having the Grand Design, Newmar, and Chris-Craft businesses as part of our family and the aspiration that all our employees and end customers share together to “Be Great, Outdoors”. Our recently published 2020 Corporate Responsibility report reinforces our six core cultural values and outlines the actions we have taken to enhance sustainability and support the communities in which our stakeholders live, work, and play. I am exceptionally proud of our team’s efforts in not only delivering fantastic results, but also driving positive change within our organization and neighborhoods. Throughout the remainder of Fiscal Year 2021, Winnebago Industries will be focused on building upon our market momentum, and doing good in the social arena as well. We are confident that the favorable industry dynamics in the RV and marine markets and the unique appeal of our innovative products will continue to drive market share gains and strong financial results."
Revenues for the Towable segment were $454.9 million for the first quarter, up 33.3% over the prior year, primarily driven by strong continued end consumer demand for our Grand Design and Winnebago product lines. Segment Adjusted EBITDA was $63.1 million, up 76.5% over the prior year period. Adjusted EBITDA margin of 13.9% increased 340 basis points, primarily due to lower discounts and allowances and operating leverage during the quarter. Backlog increased to 29,659 units, an increase of 313.4% over the prior year period, as dealer inventories have experienced a significant reduction amidst heightened levels of consumer retail demand since the summer of 2020.
Motorhome
Revenues for the Motorhome segment were $322.4 million for the first quarter, up 42.7% from the prior year, driven by the addition of Newmar and strong Winnebago Class B products. Excluding Newmar, segment revenues were $203.6 million, an increase of 7.0% over the prior year period. Segment Adjusted EBITDA was $30.3 million, up 225.2% from the prior year. Adjusted EBITDA margin of 9.4% increased 530 basis points driven by pricing actions, including lower discounts and allowances, productivity initiatives and operating leverage. Backlog increased to 13,217 units, an increase of 402.4% over the prior year period, as dealer inventories have experienced a significant reduction amidst heightened levels of consumer retail demand in the last six months.
Balance Sheet and Cash Flow
As of November 28, 2020, the Company had total outstanding debt of $516.5 million ($600.0 million of debt, net of convertible note discount of $70.9 million, and net of debt issuance costs of $12.5 million) and working capital of $475.0 million. Cash flow from operations was an outflow of $2.7 million in the first quarter of Fiscal 2021, as inventory levels have increased in response to very strong dealer orders and heightened backlog position.
Quarterly Cash Dividend
On December 16, 2020, the Company’s board of directors approved a quarterly cash dividend of $0.12 per share payable on January 27, 2021, to common stockholders of record at the close of business on January 13, 2021.
Mr. Happe continued, “During the first quarter we unveiled a refreshed Winnebago Industries enterprise brand, that reflects our status as a fast-growing company with a portfolio of premium outdoor brands. While proud of our iconic flagship Winnebago-brand RVs, the parent organization, Winnebago Industries, also reflects our pride in having the Grand Design, Newmar, and Chris-Craft businesses as part of our family and the aspiration that all our employees and end customers share together to “Be Great, Outdoors”. Our recently published 2020 Corporate Responsibility report reinforces our six core cultural values and outlines the actions we have taken to enhance sustainability and support the communities in which our stakeholders live, work, and play. I am exceptionally proud of our team’s efforts in not only delivering fantastic results, but also driving positive change within our organization and neighborhoods. Throughout the remainder of Fiscal Year 2021, Winnebago Industries will be focused on building upon our market momentum, and doing good in the social arena as well. We are confident that the favorable industry dynamics in the RV and marine markets and the unique appeal of our innovative products will continue to drive market share gains and strong financial results."
Winnebago (WGO) stock price history over the last 5 years
The image below, obtained from Google shows the stock price history of Winnebago (WGO) for the last 5 years and it's been a pretty good time for Winnebago (WGO) stockholders over the last 5 years. 5 years ago the stock was trading at around $30 and its currently trading at $62.67. That's a very strong return of 109% provided to Winnebago (WGO) stockholders over the last 5 years.
The stock of Winnebago (WGO) is trading at a lot closer to its 52 week high than it is to its 52 week low which to us is a clear indication that the short term sentiment and momentum of Winnebago (WGO) stock is very positive at this point in time.
The stock of Winnebago (WGO) is trading at a lot closer to its 52 week high than it is to its 52 week low which to us is a clear indication that the short term sentiment and momentum of Winnebago (WGO) stock is very positive at this point in time.
Winnebago (WGO) stock vs Thor (THO) stock over the last 5 years
The image below shows the stock price history of Winnebago (WGO) and Thor (THO) over the last 5 years. Both firms are active in the manufacture and selling of recreational vehicles (RV). The summary below shows the stock price performance of these two firms over the last 5 years:
While the overall trends and performance of the two firms are fairly similar its the stock of Winnebago that has outperformed that of Thor over the last 5 years.
- Winnebago : 109%
- Thor Industries: 91.3%
While the overall trends and performance of the two firms are fairly similar its the stock of Winnebago that has outperformed that of Thor over the last 5 years.
Latest stock valuation of Winnebago (WGO)
So what is Winnebago (WGO) stock worth based on their 1st quarter 2021 earnings report? Based on their earnings report our valuation model provides a target price (full value price) for Winnebago (WGO) at $64.30 a stock.
We therefore believe the stock of Winnebago is fully valued at its current price of $62.67
We usually recommend long term fundamental or value investors look to enter a stock at least 10% below our target price (full value price), which in this case is $64.30, thus a good entry point into Winnebago would be at $57.80 or below.
We expect the stock of Winnebago to pull back from current levels in coming weeks and months to levels closer to our target price (full value price), as their stock is price is overvalued
We therefore believe the stock of Winnebago is fully valued at its current price of $62.67
We usually recommend long term fundamental or value investors look to enter a stock at least 10% below our target price (full value price), which in this case is $64.30, thus a good entry point into Winnebago would be at $57.80 or below.
We expect the stock of Winnebago to pull back from current levels in coming weeks and months to levels closer to our target price (full value price), as their stock is price is overvalued
Next earnings release of Winnebago (WGO)
It is expected that Winnebago will release their 2nd quarter 2021 earnings report in late March 2021
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