Executive Summary

Q3 FY2025 was a clear beat: revenue $2.89B (+3.3% YoY) and diluted EPS $2.53 (+18.8% YoY) exceeded Wall Street consensus; gross margin improved 20 bps to 15.3% . Consensus had expected $2.61B revenue and $1.80 EPS; actuals were stronger, driving the headline beat on both metrics (values retrieved from S&P Global).*
North American Towables led strength: net sales +9.1% YoY, gross margin +200 bps to 14.9%, and IBIT +42.7% YoY on mix shift toward fifth wheels and lower discounting .
Motorized showed volume growth but margin pressure; Europe remained softer on volumes and higher promotions, though pricing/mix supported resilient margins .
Guidance reaffirmed at Q3: FY2025 net sales $9.0–$9.5B, gross margin 13.8–14.5%, EPS $3.30–$4.00; management expects a challenging Q4 FY2025 and Q1 FY2026 given macro/tariff uncertainty .
Capital actions provide catalysts: $0.50 quarterly dividend declared (payable July 15) and $400M share repurchase re-authorization; buybacks resumed post window reopening (340K shares since June 6) .

What Went Well and What Went Wrong

What Went Well

North American Towables mix and margins: 200 bps margin expansion to 14.9% on reduced discounting, warranty improvements, and cost initiatives; fifth-wheel mix uplift drove unit price +3.6% .
Strong cash generation and liquidity: Q3 operating cash flow $257.7M; liquidity ~$1.49B with $508.3M cash and $985.0M revolver availability .
Strategic execution and cost actions: “Our third quarter results exceeded our expectations… further emphasis on driving down our cost profile, led to improved margins” — Bob Martin, CEO .

What Went Wrong

Motorized margin compression: gross margin fell 60 bps to 10.5% on higher discounting and mix shift to lower-priced units despite 10.9% shipment growth .
European segment softness: net sales -5.1% YoY; unit shipments -12.2%; gross margin -130 bps due to increased discounting; IBIT -40.2% YoY .
Backlog declines reflect cautious ordering: European backlog -30.6% YoY and Towables backlog -14.4% YoY as dealers remain cautious ahead of model-year change and macro/tariff developments .

Financial Results

Metric	Q3 FY2024	Q1 FY2025	Q2 FY2025	Q3 FY2025
Revenue ($USD Billions)	$2.801	$2.143	$2.018	$2.895
Diluted EPS ($USD)	$2.13	$(0.03)	$(0.01)	$2.53
Gross Profit Margin (%)	15.1%	13.1%	12.1%	15.3%
EBITDA ($USD Millions)	$232.3	$81.7	$76.3	$233.0
Adjusted EBITDA ($USD Millions)	$236.1	$107.8	$87.0	$254.8
Net Income Attributable ($USD Millions)	$114.5	$(1.8)	$(0.6)	$135.2

Segment Breakdown – Q3 FY2025 vs Q3 FY2024

Segment	Net Sales ($USD Millions)	Unit Shipments	Gross Margin (%)	Income Before Income Taxes ($USD Millions)
North American Towable	$1,168.9 vs $1,071.4	36,077 vs 34,193	14.9% vs 12.9%	$97.6 vs $68.4
North American Motorized	$666.7 vs $646.9	5,507 vs 4,964	10.5% vs 11.1%	$32.9 vs $33.2
European	$883.5 vs $931.1	13,495 vs 15,363	16.2% vs 17.5%	$46.3 vs $77.4

Key KPIs

KPI	Q3 FY2024	Q3 FY2025
Backlog – North American Towable ($USD Millions)	$741.3	$634.3
Backlog – North American Motorized ($USD Millions)	$925.8	$883.7
Backlog – European ($USD Millions)	$1,935.1	$1,343.6
North America Dealer Inventory (units)	87,900	91,800
Operating Cash Flow ($USD Millions)	$251.7	$257.7
Liquidity ($USD Billions)	n/a	~$1.49; Cash $508.3M; ABL availability $985.0M

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Consolidated Net Sales	FY2025	$9.0–$9.8B (Q1 initial)	$9.0–$9.5B (Q2 revised; Q3 reaffirmed)	Narrowed
Consolidated Gross Profit Margin	FY2025	14.7%–15.2% (Q1 initial)	13.8%–14.5% (Q2 revised; Q3 reaffirmed)	Lowered
Diluted EPS	FY2025	$4.00–$5.00 (Q1 initial)	$3.30–$4.00 (Q2 revised; Q3 reaffirmed)	Lowered
Dividend	Quarterly	$0.50 declared Oct 2024 (prior)	$0.50 declared Jun 18, 2025; payable Jul 15	Maintained
Share Repurchase Authorization	Through Jul 2027	Prior program expiring Jul 31, 2025	Re-authorized up to $400M; 340K shares repurchased since window opened Jun 6	Raised/Reauthorized

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2)	Current Period (Q3)	Trend
Dealer sentiment & consumer confidence	Cautious, watching rate cuts; expect stronger back half; inventory discipline (Q1/Q2)	Still cautious; slight May uptick in consumer confidence; expect challenging Q4 FY2025 & Q1 FY2026	Mixed; caution persists
RVIA wholesale outlook	Q2 RVIA forecast 333–367K units; THOR aligned to lower end	RVIA “most likely” ~337K; THOR aligned lower-to-most likely	Slightly downshifted
Tariffs & macro	Monitoring new tariff policies; domestic sourcing to mitigate; manageable ASP impact (Q2)	Shared-responsibility mitigation among suppliers/OEM/dealers; manageable ASP impact at current rates	Continued risk, mitigations in place
Affordability & pricing	Towable ASP down 11.1% YTD; mix to lower-cost trailers (Q2)	Actions on BOM, mix, discounting; Towable ASP down 5.6% YTD; Motorized ASP down 1.6% YTD	Ongoing focus
ACT regulation & ZEV/NZEV	Minimal impact expected; hybrid Class A plan on Harbinger chassis (Q1/Q2)	Continued preparations; credits strategy via Harbinger (NZEV)	Stable execution
Parts strategy & service	Building RV Partfinder; expand parts distribution (Q1/Q2)	Broader rollout planned at Open House Sep 2025; cycle-time reduction goal	Advancing initiatives
Europe retail & mix	Resilient demand but mainstream suppressed; ECB cuts to help (Q2)	Registrations down 9.8% in Mar Qtr; expect rate cuts to aid channel throughput; ASP +10.8% FYTD	Softer volumes; pricing resilient

Management Commentary

“Our third quarter results exceeded our expectations on both the top and bottom lines… placing further emphasis on driving down our cost profile led to improved margins.” — Bob Martin, CEO .
“Consolidated gross margin improved to 15.3%… North American Towable generated a 200 bps improvement.” — Todd Woelfer, COO .
“Liquidity of approximately $1.49 billion… generated cash from operations of approximately $257.7 million… improved operating cash flow by over $100 million YoY.” — Colleen Zuhl, CFO .
“We expect the fourth quarter of fiscal 2025 and the first quarter of fiscal 2026 to be challenging.” — Bob Martin, CEO .

Q&A Highlights

Sentiment and outlook: Dealers remain prudently cautious; confidence ticked up in May; THOR expects challenging near-term quarters and aligns to RVIA’s ~337K most-likely scenario .
Affordability actions: Managing BOM, recontenting, mix optimization; Towable ASP -5.6% FYTD and Motorized ASP -1.6% FYTD to meet consumer price points .
Backlog/Inventory: NA Towable backlog -14.4% YoY; NA Motorized -4.5%; Europe -30.6%; NA dealer inventory ~91.8K units, viewed as healthy; Europe ~23K units .
SG&A outlook: Q3 SG&A +$11.8M YoY (commissions/incentives, restructuring); FY2025 SG&A expected ~9.5% of net sales; longer-term ~8% post restructuring .
Capital allocation: $85.1M capex FYTD; $139.2M debt reduction FYTD; incremental $55M term loan paydown post Q3; repurchases reauthorized and resumed .

Estimates Context

Metric	Consensus (Q3 FY2025)*	Actual (Q3 FY2025)	Beat/Miss
Revenue ($USD Billions)	$2.614	$2.895	Beat
Primary EPS ($USD)	$1.80	$2.53	Beat

Values retrieved from S&P Global.*

Implications: Magnitude of top- and bottom-line beat, plus Towables margin expansion, supports upward bias to near-term EPS models; management’s Q4/Q1 caution and persistent Motorized/Europe margin pressures temper full-year upward revisions .

Key Takeaways for Investors

Towables strength is durable: mix shift to fifth wheels and lower discounting are expanding margins; prioritize exposure to brands with favorable mix .
Motorized remains promotional: expect margin recovery to lag until financing costs moderate and mix improves; avoid extrapolating volume gains without margin improvement .
Europe is volume-constrained but pricing resilient: watch discounting intensity and ECB rate path; ASP gains cushion margins amid lower shipments .
Cash generation and balance sheet provide flexibility: $257.7M Q3 OCF and ~$1.49B liquidity support buybacks and selective investments; monitor cadence of repurchases under $400M authorization .
Guidance reaffirmation reduces downside tail risk: ranges incorporate margin pressure; upside hinges on consumer confidence and tariff resolution .
Near-term setup: Q4 FY2025/Q1 FY2026 likely tougher; catalysts include continued Towables margin resilience, any tariff clarity, and incremental buyback activity .
Watch KPIs: backlog trend (especially Europe), dealer inventory levels, and SG&A progress toward ~8% longer-term target .

Additional Q3-Relevant Releases

Regular quarterly dividend of $0.50 per share, payable July 15, 2025 .
Share repurchase re-authorization up to $400M; >340K shares repurchased since window reopened .

THOR INDUSTRIES INC (THO)·Q3 2025 Earnings Summary