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LCI INDUSTRIES (LCII)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 topline modestly beat and EPS (adjusted) edged past consensus: revenue $1.107B vs S&P Global consensus $1.072B; adjusted EPS $2.39 vs $2.29; EBITDA was roughly in line/slight miss ($121.3M vs $119.4M est.). Mix and one-time separation costs compressed YoY margins, though EBITDA margin expanded sequentially to 11.0% (+40 bps q/q) . Revenue/EPS/EBITDA estimates marked with * come from S&P Global.
  • OEM strength (share gains, fifth-wheel mix, tariff-related pricing) and acquisitions offset marine and European RV softness; Aftermarket grew 4% but margins contracted on mix and investments .
  • Management reaffirmed its 2025 RV wholesale shipment forecast (320k–350k), guided Q3 revenue up ~5% y/y with EBIT margins similar to 2024, and highlighted July sales +5% y/y; marine expected to remain soft .
  • Capital deployment remained active: $1.15 dividend paid in Q2 and declared again on Aug 15; $38M buybacks in Q2 and another ~$62M post-quarter; liquidity remains strong with $192M cash and $595M revolver availability .
  • Stock reaction catalysts: tariff mitigation progress (reducing China exposure to ~10% target), steady margin resilience, and accretive bus-market acquisitions (Freedman, Trans/Air) sustaining diversification amid marine softness .

What Went Well and What Went Wrong

  • What Went Well

    • Share gains and mix: RV OEM sales +3% y/y to $503.3M on market share gains, fifth‑wheel mix and targeted tariff pricing actions; Adjacent Industries +10% on acquisitions . “We delivered strong second quarter results… fueled share gains across key categories and generated 5% sales growth… EBITDA margin of 11%, a sequential expansion of 40 bps” (CEO) .
    • Tariff mitigation: Higher material and freight costs “fully mitigated” through sourcing strategies and targeted price increases, supporting profitability despite headwinds .
    • Strong cash/returns: $192M cash, $595M revolver availability; $67M returned to shareholders YTD through 8/1 (dividends + buybacks) .

  • What Went Wrong

    • Margin pressure y/y: Operating margin 7.9% (–70 bps y/y) on executive separation costs and less favorable product mix; Aftermarket margin 13.5% (–200 bps y/y) on mix and growth investments .
    • Marine softness and Europe RV headwinds: Marine expected to remain soft through 2025; European RV volume down; automotive aftermarket volumes pressured .
    • Tariffs raised baseline pressure: Management quantified ~290 bps 2025 potential margin impact pre‑mitigation, up from prior assumptions; mitigation focuses on resourcing and selective pricing, but reported margins will mathmatically compress as tariff dollars are mitigated without layering margin on top .

Financial Results

Quarterly results trend (oldest → newest)

MetricQ4 2024Q1 2025Q2 2025
Revenue ($B)$0.803 $1.046 $1.107
GAAP Diluted EPS$0.37 $1.94 $2.29
Adjusted EPSN/A$2.19 $2.39
Operating Margin %N/A7.8% 7.9%
Adjusted EBITDA ($M)$45.8 $110.9 $121.3
Adjusted EBITDA Margin %5.7% 10.6% 11.0%

Q2 2025 actual vs S&P Global consensus

MetricConsensus*ActualBeat/Miss
Revenue ($B)$1.0729*$1.1073 Beat
Adjusted EPS ($)$2.29*$2.39 Beat
EBITDA ($M)$119.4*$118.1 Slight miss

Segment sales and profitability

SegmentQ2 2024 Sales ($M)Q2 2025 Sales ($M)YoYQ2 2024 Op Profit ($M)Q2 2025 Op Profit ($M)Margin Q2 2024Margin Q2 2025
RV OEMs (Towables + MH)$489.97 $503.30 +3%————
• Towables$426.35 $441.93 +3.7%————
• Motorhomes$63.62 $61.37 –3.5%————
Adjacent Industries OEMs$306.16 $336.26 +9.8%————
Total OEM Segment$796.12 $839.56 +5.5%$50.56 $51.68 6.4% 6.2%
Aftermarket$258.42 $267.69 +3.6%$40.04 $36.12 15.5% 13.5%
Consolidated$1,054.54 $1,107.25 +5.0%$90.60 $87.80 8.6% 7.9%

KPIs and balance sheet

KPIQ4 2024Q1 2025Q2 2025
Towable Content per Unit ($)$5,097 (LTM) $5,164 (LTM) $5,234 (LTM)
Motorhome Content per Unit ($)$3,742 (LTM) $3,750 (LTM) $3,793 (LTM)
Days Sales Outstanding (LTM)29.9 29.2 29.6
Inventory Turns (LTM)4.0 4.1 4.2
Cash & Equivalents ($M)$165.8 $231.2 $191.9
Revolver Availability ($M)$452.5 $595.3 $595.3
Net Debt / Adj. EBITDA (TTM)2.1x 1.9x 2.1x
Free Cash Flow ($M)—$33.7 (Q1) $133.2 (YTD)
July Sales y/y——+5%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
NA RV Wholesale ShipmentsFY 2025320k–350k (Q1) 320k–350k reaffirmed Maintained
Q3 RevenueQ3 2025—~+5% y/y (incl. acquisitions) Introduced (up)
Q3 EBIT MarginsQ3 2025—Similar to 2024 levels Introduced (flat)
Marine Outlook2H 2025Improve back-half (Q1) Expect continued slowness through 2025 Lowered
CapexFY 2025$50–$70M $50–$70M Maintained
D&AFY 2025$115–$125M $115–$125M Maintained
Stock‑based CompFY 2025$18–$23M $18–$23M Maintained
Annual Tax RateFY 202525%–27% 25%–27% Maintained
Overhead/G&A ImprovementFY 2025+85 bps vs 2024 On track; offsets by tariff math Maintained (nuanced)
DividendOngoing$1.15 declared in Feb $1.15 declared Aug 15, payable Sept 12 Maintained

Earnings Call Themes & Trends

TopicQ4 2024 (Prior-2)Q1 2025 (Prior-1)Q2 2025 (Current)Trend
Tariffs & MitigationHighlighted savings and ops improvements; no explicit 2025 tariff impact quantified .Estimated ~180 bps 2025 margin impact (20% CN/10% ROW) pre‑mitigation; plan: diversify sourcing, vendor cost share, pass‑through .Potential ~290 bps 2025 margin impact as CN tariff assumed 30%; $15.4M tariff expense in Q2 mitigated; China exposure target ~10% by 2025 .Headwind ↑; mitigation scaling
Product InnovationTouring Coil Suspension, ABS, Chill Cube, windows driving content .Appliances/AC strength; towable content +3% y/y .Continued adoption; $100M run-rate from new launches; aftermarket AC unit strength .Positive, sustaining share
RV Mix & ContentSingle-axle shift pressured content .Towable content +3% y/y; single-axle elevated .Single‑axle down to ~20% in Q2; content LTM up; OEM share gains .Mix improving modestly
Marine MarketWeakness, inventory rebalancing .Softness expected to improve in 2H .Softness to persist through 2025 .Weaker than prior
Bus/TransportationNoted diversification .Acquired Trans/Air & Freedman; ~$200M annualized .Early integration success; entering heavy-duty bus seating .Expanding adjacency
Capital AllocationDividend increased to $1.15 .Refinanced converts/credit; buybacks initiated .$128M YTD repurchases through 8/1; ample liquidity .Ongoing returns

Management Commentary

  • “Our tariff mitigation strategy of diversifying our supply chain… enabled us to minimize the impact of pricing to our customers as well as support profitability in the second quarter” — Jason Lippert, CEO .
  • “We’re making strong progress toward our goal of reducing China exposure to 10% by 2025… diversifying our supply chain into more strategically favorable regions… bringing some products back to the U.S.” — CEO .
  • “Excluding separation expenses, OEM margin improved 10 bps y/y… we offset ~$15M in tariff and freight impacts through supply chain diversification, vendor support and pricing” — CFO .
  • “For Q3 we expect overall revenue to be up ~5% y/y… and EBIT margins to be similar to 2024 levels” — CFO .

Q&A Highlights

  • Tariffs: Impact rose from ~180 bps to ~290 bps due to China tariff rate assumption (20% → 30%); mitigation targets dollar cost, implying margin % compression math; pricing pass‑through selective and product/“good‑better‑best” strategies in place .
  • Mix normalization: Single‑axle mix trending down toward ~20% from ~24–25%, supportive of content and margins over time; weekly tracking shows sub‑20% recently .
  • Acquisitions contribution: July +5% y/y sales, with ~3–4% from acquisitions; integration costs to weigh modestly near term .
  • Outlook cadence: Seasonality implies softer 4Q; marine to remain soft; RV retail stabilizing; wholesale likely tracks retail near term .

Estimates Context

  • Q2 2025 vs consensus (S&P Global): revenue $1.1073B vs $1.0729B*, adjusted EPS $2.39 vs $2.29*, EBITDA $118.1M vs $119.4M*. Company reported GAAP EPS $2.29 and adjusted EPS $2.39; consensus appears aligned to adjusted basis . Values marked with * retrieved from S&P Global.
  • Forward estimates likely fine‑tune: management’s Q3 “~+5% y/y revenue” and “EBIT margins similar to 2024” suggest modest upward revenue adjustments and largely unchanged margin/EPS expectations near term, with marine softness a counterweight . Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Resilient quarter: modest top‑line beat, sequential margin expansion to 11% EBITDA despite tariff/mix headwinds; OEM share gains and pricing actions effective .
  • Tariff overhang manageable: ~290 bps pre‑mitigation impact is being offset via sourcing/vendor support/pricing; reported margin percent can compress mathematically even as dollars are mitigated .
  • Mix turning: single‑axle mix easing supports content/margins; Aftermarket margins should improve as mix/investment cycle normalizes .
  • Diversification adds durability: bus acquisitions (Freedman/TransAir) broaden end‑markets less tied to consumer cycles; early integration progressing .
  • H2 setup: Q3 revenue +~5% y/y with stable EBIT margins implies steady execution; watch marine softness and tariff policy path for volatility .
  • Capital returns and balance sheet strength (cash + revolver) remain supportive of buybacks/dividends and opportunistic M&A .
  • Trading lens: The narrative centers on sustained mitigation and share gains vs tariff/marine headwinds; catalysts include improved mix, aftermarket margin recovery, and visibility on tariff rates.

Notes: All quantitative figures sourced from company filings/press materials; consensus estimates marked with * are retrieved from S&P Global.

Citations:

  • Q2 2025 8-K and exhibits:
  • Q2 2025 press release:
  • Q2 2025 call transcript:
  • Q1 2025 8-K and call:
  • Q4 2024 press release:
  • Dividend press release (Aug 15):