Executive Summary

Q3 2025 delivered double‑digit top-line growth and meaningful margin expansion: net sales rose 13% to $1.036B, GAAP diluted EPS was $2.55, and operating margin expanded 140 bps YoY to 7.3% .
Results materially exceeded Wall Street consensus: Adjusted EPS of $1.97 vs $1.44 consensus (+36.8%) and revenue of $1.036B vs $964M consensus (+7.5%); beats were driven by RV OEM share gains, higher-content mix, cost actions, and tariff mitigation . Consensus values marked with “*” sourced from S&P Global.
Guidance improved: 2025 North American RV wholesale shipment range raised to 340K–350K (from 320K–350K), October sales projected at ~$380M (+15% YoY), and 2026 operating margin targeted at 7%–8%; CapEx tightened to $45–$55M (from $50–$70M) .
Stock reaction catalysts: strong beat on EPS/revenue, visible operating leverage, clearer 2025/2026 shipment trajectories, and continued portfolio optimization/M&A (Bigfoot Leveling tuck‑in) supporting aftermarket and adjacent markets .

What Went Well and What Went Wrong

What Went Well

RV OEM net sales rose 11% to ~$470M, supported by higher‑content fifth wheels and market share gains; towable content per unit increased 6% YoY to $5,431 and motorized content rose 2% to $3,839 .
Adjacent Industries OEM net sales climbed 22% to ~$320M, with ~$41.9M contribution from acquisitions (Freedman Seating and Trans/Air); synergies tracking ahead, and Bigfoot Leveling acquired in October to expand hydraulic leveling offerings .
Operational initiatives delivered margin expansion: operating margin reached 7.3% (+140 bps YoY), tariff mitigation, sourcing, productivity, and footprint optimization contributed; adjusted EBITDA rose 24% to ~$106M (10.2% margin) .

Management quotes:

“Operating margins improved 140 basis points year over year to 7.3%... a direct result of disciplined cost management... and productivity initiatives.” — Jason Lippert .
“Adjusted EBITDA grew 24% to $106 million... GAAP net income... $2.55 per diluted share.” — Lillian Etzkorn .
“Our top five product innovations now projected at $225 million annualized sales run rate.” — Investor presentation .

What Went Wrong

Aftermarket margin contracted 90 bps YoY to 12.9% on higher material (tariffs, steel, aluminum), freight costs, and investments in capacity/distribution; automotive aftermarket volumes were lower .
European RV market softness and seasonal Q4 headwinds (light aftermarket/international) temper near‑term growth; marine expected to remain slow for balance of 2025 .
Mix pressure from single‑axle trailers remains an overhang (albeit easing); management expects normalization rather than a return to historical lows .

Financial Results

Headline Performance vs prior quarters and consensus

Metric	Q1 2025	Q2 2025	Q3 2025	Q3 2025 Consensus*
Revenue ($USD Billions)	$1.046*	$1.107	$1.036	$0.964*
GAAP Diluted EPS ($)	$1.94	$2.29	$2.55	—
Adjusted EPS ($)	$2.19	$2.39	$1.97	$1.44*
Operating Margin %	7.8%	7.9%	7.3%	—
Adjusted EBITDA ($USD Millions)	$111	$121.3	$105.9	—

Notes: Q1 revenue marked “” sourced from S&P Global. Consensus values marked “” sourced from S&P Global.

Margin detail

Metric	Q1 2025	Q2 2025	Q3 2025
Gross Margin %	24.08% *	24.39%	24.37%*
EBIT Margin %	7.78%*	7.93%*	7.28%*
Net Income Margin %	4.73%*	5.21%*	6.03%*
Adjusted EBITDA Margin %	10.7%	11.0%	10.2%

Values marked “*” (gross, EBIT, net income margins) retrieved from S&P Global.

Segment breakdown (YoY)

Segment Net Sales ($USD Millions)	Q3 2024	Q3 2025
RV OEM – Travel trailers & fifth-wheels	$369.2	$412.5
RV OEM – Motorhomes	$52.8	$57.6
Adjacent Industries OEMs	$262.4	$319.9
Total OEM Segment	$684.5	$790.0
Aftermarket Segment	$231.0	$246.5
Total Net Sales	$915.5	$1,036.5

KPIs and segment profitability

KPI / Profitability	Q3 2024	Q3 2025
Towable content per unit ($)	$5,147	$5,431
Motorized content per unit ($)	$3,768	$3,839
OEM Segment Operating Margin %	3.2%	5.5%
Aftermarket Operating Margin %	13.9%	12.9%
Adjusted EBITDA ($USD Millions)	$85.2	$105.9

Non‑GAAP reconciliations provided in exhibits .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
North American RV wholesale shipments	FY 2025	320K–350K	340K–350K	Raised
North American RV wholesale shipments	FY 2026	—	345K–360K	New
Operating margin improvement vs 2024	FY 2025	+85 bps target	On track +85 bps	Maintained
Operating profit margin	FY 2026	—	7%–8%	New
CapEx	FY 2025	$50–$70M	$45–$55M	Lowered
Depreciation & Amortization	FY 2025	$115–$125M	$115–$125M	Maintained
Annual tax rate	FY 2025	25%–27%	25%–27%	Maintained
October consolidated net sales	Oct 2025	—	~$380M (+15% YoY)	New
Dividend	Quarterly	$1.15/share	$1.15/share	Maintained

Earnings Call Themes & Trends

Topic	Q1 2025 (5/6)	Q2 2025 (8/5)	Q3 2025 (10/30)	Trend
Tariffs/Mitigation	Multi‑pronged mitigation, reduce China to ~10% by YE25; pricing pass‑throughs possible	Estimated impact rose with China at 30%; mitigation via sourcing, pricing, vendor support	“Effectively mitigated” in Q3; materials sourcing and pricing helped margins	Improving mitigation; impact stabilizing
Mix shift (single‑axle)	Elevated single‑axle mix; expect normalization	Single‑axle peaked ~24%, easing to ~20%	At ~19% in Q3; expect normalization not full reversion	Easing mix pressure
Innovation/content growth	Chill Cube, ABS, TCS, windows driving share/content	Innovations at ~$100M run rate	Innovations at ~$225M run rate; 3%–5% organic content growth target	Accelerating
Marine market	Soft; inventory rebalancing	Weakness to continue	Continued slowness for balance of 2025	Persistent headwind
Dealer inventories/restocking	Cautious restock; gradual rise expected	Caution persists; seasonality implies softer H2	Inventories low; some restocking ahead of spring	Improving sentiment
M&A/portfolio actions	Freedman & Trans/Air acquisitions; bus exposure	Freedman adds ~$125M; integration costs near term	Bigfoot Leveling acquired; exploring ~$75M divestitures in 2026	Active portfolio management
Aftermarket/service	Growth; Camping World partnership; training ecosystem momentum	Aftermarket up 4%; sequential margin expansion; investment in capacity	Aftermarket up 7%; training and new 600K sq ft DC; auto aftermarket softer	Structurally strengthening despite near‑term mix headwinds

Management Commentary

“We delivered an exceptionally strong quarter with sales growth of 13% to more than $1 billion, along with solid margin improvement... driven by double‑digit gains across our RV and adjacent businesses.” — Jason Lippert .
“Consolidated operating profit during the third quarter was $75 million or 7.3%... driven by reduced costs from material sourcing strategies and increased North American RV sales volume... higher content fifth wheel units.” — Lillian Etzkorn .
“CapEx for the year is now expected to land between $45 million and $55 million, better than our prior range of $50 million to $70 million.” — Jason Lippert .
“We expect October net sales of approximately $380 million, up 15% from prior year... and mid‑teens YoY growth for the full fourth quarter.” — Lillian Etzkorn .

Q&A Highlights

Tariff impact and mitigation: Management emphasized successful mitigation via sourcing, vendor negotiations, and targeted pricing; aluminum rising offset by steel declines; expect predictability in tariffs into next year .
Mix and margin: Single‑axle trailer mix eased to ~19%; richer fifth‑wheel mix supports content/margins; Q4 operating margin expansion YoY similar to Q3 levels despite seasonality .
Outlook and segmentation: RV expected to remain strong into Q4; aftermarket/international seasonally lighter; marine outlook remains cautious; bus market durable .
Portfolio actions: Gains from facility consolidations; potential real estate proceeds; 8–10 consolidations planned in 2026; exploring ~$75M lower‑margin divestitures .
Competitive dynamics: Automotive aftermarket competitor uncertainty (First Brands) presents share capture opportunity for CURT and trailering components .

Estimates Context

Metric	Q3 2025 Consensus*	Q3 2025 Actual	Surprise
Adjusted EPS ($)	$1.44*	$1.97	+$0.53 (+36.8%)
Revenue ($USD Millions)	$963.8*	$1,036.5	+$72.7 (+7.5%)

Consensus counts: 9 estimates for EPS and revenue*. Values with “*” retrieved from S&P Global. Actuals per 8‑K exhibits .
Implication: Material beats on both top and bottom lines should drive upward estimate revisions for Q4 and FY26 margins, supported by higher content mix, cost actions, and stronger RV OEM demand .

Key Takeaways for Investors

Strong beat and operating leverage: Q3 revenue/Adjusted EPS handily beat consensus with 140 bps YoY margin expansion; productivity and sourcing actions are sticking .
Mix normalization tailwind: Single‑axle share retreat supports content per unit and margins; fifth‑wheel mix strength evident across brands .
Innovation flywheel: Top five innovations at ~$225M run rate, reinforcing 3%–5% organic content growth target into 2026 .
Guidance visibility improved: 2025 shipments raised, October sales +15% YoY, and 2026 margin target 7%–8%; CapEx trimmed to $45–$55M .
Portfolio optimization: Facility consolidations (five in 2025) with ~$5M run‑rate savings; potential ~$75M divestitures of dilutive revenues in 2026 .
Aftermarket resilience with strategic investments: Despite margin mix headwinds, expanded service footprint and distribution (new 600K sq ft DC) position segment for durable growth .
Near‑term watch items: Seasonally lighter Q4 aftermarket/international, marine softness, and commodity/tariff dynamics; management indicates mitigation plans continue to offset cost pressures .

Values retrieved from S&P Global where marked with “*”.

LCI INDUSTRIES (LCII)·Q3 2025 Earnings Summary