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THOR INDUSTRIES INC (THO)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 FY2025 results were in line with management’s expectations amid continued macro headwinds: revenue $2.02B, gross margin 12.1%, and diluted EPS $(0.01) . Segment divergence persisted: Towable margins improved sharply, while Motorized and Europe contracted .
  • Guidance narrowed and lowered on margins/EPS: FY25 sales $9.0–$9.5B (from $9.0–$9.8B), gross margin 13.8%–14.5% (from 14.7%–15.2%), EPS $3.30–$4.00 (from $4.00–$5.00), reflecting tougher Motorized/Europe conditions and dealer-partner actions .
  • Cash execution remains a support: Q2 operating cash flow $30.8M; liquidity ~$1.23B (cash ~$373.8M; ABL availability ~$855M), with net debt discipline and a $0.50 quarterly dividend declared Mar 25 .
  • Strategic actions continued: brand/organizational realignment (Heartland under Jayco; certain private labels to Dutchmen) to streamline operations and improve margins and distribution leverage into a consolidating dealer base .
  • Transcript note: A full Q2 FY2025 earnings call transcript was not available; we relied on the 8-K exhibit Q&A and investor deck for themes and clarifications .

What Went Well and What Went Wrong

  • What Went Well

    • Towable recovery: NA Towable net sales +13.3% with unit shipments +27.6% and gross margin +370 bps to 11.1% on mix shift to lower-cost travel trailers plus lower discounting and cost saves .
    • Operational discipline and cash: Q2 operating cash flow $30.8M; YTD $61.6M; liquidity ~$1.23B (cash ~$373.8M; ABL ~$855M) supporting capex and debt reduction .
    • Management tone on positioning: “Our strategic approach continues to emphasize a strong margin profile while focusing on alignment of our production to match the current retail environment” — CEO Bob Martin .

  • What Went Wrong

    • Motorized under pressure: NA Motorized sales −21.8% with unit shipments −20.5% and gross margin −280 bps to 7.8% on softer demand and higher discounting .
    • Europe softer: sales −21.7%, unit shipments −27.8%, gross margin −210 bps to 13.2% as lower volumes lifted overhead as a % of sales .
    • EPS and margins vs prior year: diluted EPS fell to $(0.01) from $0.13 and consolidated gross margin slipped 20 bps YoY to 12.1% .

Financial Results

Overall KPIs vs prior periods; estimates not available from S&P Global this quarter.

MetricQ4 FY2024Q1 FY2025Q2 FY2025
Revenue ($USD Billions)$2.53 $2.14 $2.02
Gross Profit Margin %15.8% 13.1% 12.1%
Diluted EPS ($)$1.68 $(0.03) $(0.01)
EBITDA ($USD Millions)$219.0 $81.7 $76.3
Adjusted EBITDA ($USD Millions)$218.4 $107.8 $87.0

Actual vs Wall Street consensus (Q2 FY2025):

  • S&P Global consensus EPS and revenue were unavailable at time of writing due to data access limits; therefore beat/miss vs estimates cannot be determined this quarter.

Segment breakdown – Q2 FY2025

SegmentNet Sales ($USD Millions)Unit ShipmentsGross Margin %Income Before Tax ($USD Millions)
North American Towable$828.3 28,013 11.1% $28.2
North American Motorized$446.3 3,526 7.8% $4.3
European$612.5 9,442 13.2% $2.2

Key KPIs

KPIValue
Backlog – NA Towable$1,073.8M
Backlog – NA Motorized$1,124.7M
Backlog – Europe$1,644.0M
Total RV Backlog$3,842.5M
Dealer Inventory – NA Towable76,180 units (Jan 31, 2025)
Dealer Inventory – NA Motorized10,021 units (Jan 31, 2025)
Dealer Inventory – THOR NA total~86,200 units (Jan 31, 2025)
Liquidity (cash + revolver)~$1.23B (cash ~$373.8M; ABL ~$855M)
Cash from Operations – Q2 / FYTD$30.8M / $61.6M
Net Debt / TTM EBITDA1.1x
Dividend (declared Mar 25)$0.50/share

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Consolidated Net SalesFY2025$9.0B–$9.8B $9.0B–$9.5B Narrowed lower top end
Consolidated Gross Profit MarginFY202514.7%–15.2% 13.8%–14.5% Lowered
Diluted EPSFY2025$4.00–$5.00 $3.30–$4.00 Lowered
Total NA RV Industry Wholesale Shipments (internal forecast)FY2025330K–345K (implied) 325K–340K (slide) Slightly lower midpoint
DividendOngoing$0.50 per quarter (increased Oct ’24) $0.50 per quarter (Mar 25 declaration) Maintained

Management attributes the revision to higher-than-anticipated margin pressure in NA Motorized and Europe and strategic actions with dealer partners .

Earnings Call Themes & Trends

(Note: No full transcript available; themes synthesized from the Q&A exhibit and recent quarters.)

TopicPrevious Mentions (Q4 FY2024, Q1 FY2025)Current Period (Q2 FY2025)Trend
Consumer confidence & retail demandExpect seasonally cautious first half FY25; conservative stance on macro headwinds Positive trade show signals but drop in consumer confidence early 2025; cautious on timing of rebound Stabilizing but cautious
Affordability & discountingExpect discounting to remain elevated in Motorized; moderation in Towables Mix shift to lower-cost Towables helped volumes; discounting pressured Motorized margins Towables improving; Motorized pressured
TariffsNot specific in prior two; general tariff sensitivity New tariff policies may modestly impact ASPs; mitigation via domestic sourcing and supply companies Manageable headwind
Dealer inventory & production alignmentDiscipline to keep dealer lots fresh; avoid overbuild NA dealer inventory ~86.2k; mix appropriate; Europe dealer inventory steady; production aligned with retail Controlled and aligned
Regulatory – California ACTNot highlighted priorMinimal expected sales impact FY25; hybrid Class A on Harbinger chassis to qualify as NZEV; access to ACT credits Mitigation strategy in place
Brand/structural optimizationOngoing operational efficiency focus Anticipates structural/brand rationalization; Heartland integrated under Jayco; private labels to Dutchmen Accelerating optimization
Europe trendsFY24 Europe strong; restocking fading Europe volumes down; ASP up; anticipate meeting internal 2H FY25 plan Normalizing post-restock

Management Commentary

  • “Our strategic approach continues to emphasize a strong margin profile while focusing on alignment of our production to match the current retail environment.” — Bob Martin, CEO .
  • “Consolidated gross margins for Q2 FY2025 at 12.1%… Towable gross margins up 370 bps YoY; Motorized and Europe declined as anticipated.” — Todd Woelfer, COO .
  • “On January 31, 2025, we had liquidity of approximately $1.23 billion… we generated cash from operations of approximately $30.8 million (YTD $61.6 million).” — Colleen Zuhl, CFO .
  • On guidance revision: margin pressure above initial plan in NA Motorized and Europe and additional dealer-partner actions driving softer margins than originally forecast .

Q&A Highlights

  • Market outlook hinges on consumer confidence; Q2 shows dealer optimism but early-2025 confidence decline drives caution on timing of rebound .
  • Backlog dynamics: NA Towable backlog +28.4% YoY; NA Motorized +4.9%; Europe −40.1% as chassis shortages and restocking normalize .
  • Tariffs: Expect some cost/price impact, mitigated via domestic sourcing, owned supply chains, and pass-through mechanisms; not quantified given policy fluidity .
  • ACT regulation: Minimal FY25 sales impact; hybrid Class A (Harbinger chassis) strategy plus potential ACT credit access to support continuity .
  • SG&A: −$13.9M YoY in Q2 on lower legal/pro fees, deferred comp dynamics, and incentive comp; full-year SG&A expected ~9.5% of sales .

Estimates Context

  • S&P Global consensus data for Q2 FY2025 EPS and revenue was unavailable due to access limits at time of writing; we are therefore not presenting beat/miss vs estimates this quarter. We will update when S&P Global data becomes available.

Key Takeaways for Investors

  • Near-term: Narrative centers on lowered FY25 margin/EPS guidance and Motorized/Europe softness versus clear Towable margin recovery; these elements likely drive stock reactions around revisions vs expectations .
  • Mix/price strategy: Emphasis on affordability is lifting volumes in Towables while discounting pressures Motorized; watch discounting trajectory into spring/summer .
  • Cash and balance sheet: Healthy liquidity (~$1.23B) and continued debt paydown enable ongoing capex, dividend, and optionality for opportunistic M&A .
  • Structural actions: Heartland integration under Jayco and private labels consolidation aim to improve operating leverage and margins as the cycle turns .
  • Regulatory/tariff risk: Management has credible mitigation on ACT and tariffs; near-term ASP/cost impacts expected to be manageable .
  • Set-up into 2H: Management still expects stronger 2H FY25 cash generation and retail trends improving into FY2026 if consumer confidence stabilizes .
  • Monitoring list: Consumer confidence indices, Motorized demand elasticity to financing costs, Europe channel inventory normalization, and cadence of brand rationalization announcements .

Citations:

  • Q2 FY2025 press release and exhibits .
  • Q2 FY2025 8-K and Q&A exhibit .
  • Investor slides .
  • Prior quarters: Q1 FY2025 press release ; Q4 FY2024 press release .
  • Other press releases: Strategic realignment (Mar 19, 2025) ; Dividend (Mar 25, 2025) .