Recreational Vehicle Maker Thor's European Sales Hit By Dip, Cautions On Macro Outlook

Thor Industries, Inc. THO shares are trading higher on Wednesday after the company reported third-quarter EPS of $2.53 beating the street consensus of $1.83.

Quarterly sales of $2.89 billion, up 3.3% year over year (Y/Y), outpaced the analyst consensus estimate of $2.48 billion.

Gross profit margin in the quarter under review expanded by 20 basis points year over year to 15.3%.

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Adjusted EBITDA increased 7.9% Y/Y to $254.8 million in the quarter.

North American Towable Recreational Vehicle (RV) net sales increased 9.1% Y/Y, while North American Motorized RV net sales rose 3.1% Y/Y in the quarter.

North American Towable RV net sales benefitted from 5.5% higher unit shipments and a 3.6% increase in net price per unit.

Gross profit margin improved 200 basis points to 14.9%, attributed to higher sales, less discounting, better warranty costs, and ongoing savings.

North American Motorized RV net sales increased due to a 10.9% rise in unit shipments (partly from promotions), though a 7.8% decrease in net price per unit (due to product mix shift and higher discounting) partially offset this.

Gross profit margin fell to 10.5% from 11.1%, primarily owing to increased sales discounting.

As of April 30, the order backlog for North American Towable RV stood at $634.3 million (-14.4%) and North American Motorized RV came in at $883.7 million (-4.5%).

European RV net sales decreased 5.1% Y/Y for the quarter, led by a 12.2% decrease in unit shipments, which was offset in part by a 7.1% Y/Y increase in the overall net price per unit. 

European RV net sales fell due to a 12.2% drop in unit shipments, partially offset by a 7.1% increase in net price per unit. The price increase included a 6.8% rise from product mix and pricing changes, plus a 0.3% benefit from foreign currency exchange rates.

European RV gross profit margin contracted 130 basis points to 16.2% on increased sales discounting.

As of April 30, the order backlog for European RV came in at $1.34 billion (-30.6%).

The company exited the quarter with cash and cash equivalents worth $508.3 million, with net inventories worth $1.35 billion. Long-term debt (net) at the end of the quarter stood at $1.01 billion.

Todd Woelfer, senior VP and COO, said, ”As we anticipated and messaged at the beginning of our fiscal year, our North American Motorized and European segments have both seen year-over-year declines in gross margin but still achieved resilient results considering the challenging environments facing those segments.”

”While our consolidated margin this quarter was unfavorably impacted by actions we took to deepen our partnerships with key dealers, strategically, deepening these key relationships is vital to our long-term market position and these decisions favorably position THOR for the future as we look ahead,”

Thor Industries reaffirmed its FY25 EPS guidance of $3.30 to $4.00 compared to analyst estimates of $3.59.

The company also maintained its FY25 sales guidance at $9.00 billion to $9.50 billion versus the analyst estimate of $9.25 billion.

Bob Martin, president and CEO, added, ”Our financial guidance assumed a stronger second half of our fiscal year, and our fiscal third quarter performance reflects the value of our strategies in the currently difficult market.”

”We expect the fourth quarter of our fiscal 2025 and the first quarter of our fiscal 2026 to be challenging. The current economic uncertainty has led to downward pressure on consumer confidence and has negatively impacted retail pull-through. We believe that upon the resolution of this uncertainty, we will see improved consumer confidence and the return of a strong retail environment,” he added.

Year-to-date, the stock has declined around 11%. The short float for Thor Industries is 18.33%, according to data from Benzinga Pro.

Price Action: THO shares are trading higher by 3.44% to $85.25 at last check Wednesday.

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