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WI

WINNEBAGO INDUSTRIES INC (WGO)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 FY2025 revenue was $625.6M, down 18.0% YoY; GAAP diluted EPS was -$0.18 and adjusted diluted EPS was -$0.03 as RV volumes and mix pressured margins while Marine delivered YoY growth and margin expansion .
  • Consolidated adjusted EBITDA fell to $14.4M (from $54.1M YoY) as deleverage, higher warranty costs (including recalls), and competitive discounting weighed on RV profitability; Marine was the standout with 9.3% adjusted EBITDA margin (+110 bps YoY) .
  • FY2025 guidance: revenue $2.9–$3.2B reaffirmed; reported EPS narrowed to $2.50–$3.80 (from $2.40–$3.90) and adjusted EPS narrowed to $3.10–$4.40 (from $3.00–$4.50) with midpoints maintained; adjusted EPS guidance excludes ~$22M pretax intangible amortization .
  • Capital returns remain active: $30M of share repurchases in Q1 and a $0.34 dividend approved (42nd consecutive quarterly dividend); management expects Q2 sales to be in line with Q1 with modest profitability improvement, setting up H2 as the potential recovery catalyst as retail “green shoots” emerge .

What Went Well and What Went Wrong

What Went Well

  • Marine resilience: Net revenues up 3.6% YoY to $90.5M and adjusted EBITDA margin expanded +110 bps to 9.3%, supported by targeted price increases and market share gains in Barletta and Chris-Craft .
  • Inventory discipline and sequential OpEx control: SG&A declined 4.6% sequentially, and management emphasized disciplined production, targeted incentives, and cost containment across units .
  • Product innovation runway: Grand Design Lineage motorized ramp continues with Series M and upcoming Series F Super C; new affordable towable floorplans and marine product updates position the portfolio for spring selling season .

What Went Wrong

  • RV segment pressure: Towable revenues -23.2% YoY and adjusted EBITDA margin down to 5.3%; Motorhome revenues -18.7% YoY and adjusted EBITDA margin down to 1.0%, with deleverage, competitive discounting, and higher warranty (including recall costs) cited .
  • Consolidated profitability compressed: Gross margin fell 290 bps YoY to 12.3%; adjusted EBITDA declined 73.4% YoY to $14.4M .
  • Free cash flow negative seasonally: Q1 operating cash flow used was -$16.7M (seasonally weak Q1/Q2), and net debt/EBITDA (~3x at FY-end) remains above the targeted 0.9x–1.5x range; management anticipates improvement as seasonality and demand return .

Financial Results

Consolidated results (sequential trend, oldest → newest)

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Millions)$786.0 $720.9 $625.6
Gross Margin %15.0% 13.1% 12.3%
Operating Income (Loss) ($MM)$43.5 $(17.8) $(0.9)
Net Income ($MM)$29.0 $(29.1) $(5.2)
Diluted EPS ($)$0.96 $(1.01) $(0.18)
Adjusted EPS ($)$1.13 $0.28 $(0.03)
Adjusted EBITDA ($MM)$58.0 $28.7 $14.4
Cash from Operations ($MM)$99.4 $40.7 $(16.7)

Q1 2025 YoY context

MetricQ1 2025Q1 2024 (prior-year)
Revenue ($USD Millions)$625.6 $763.0
Gross Margin %12.3% 15.2%
Diluted EPS ($)$(0.18) $0.78
Adjusted EPS ($)$(0.03) $0.95

Segment breakdown (oldest → newest)

Segment MetricQ3 2024Q4 2024Q1 2025
Towable RV Net Revenues ($MM)$386.3 $317.0 $254.0
Towable Adjusted EBITDA ($MM)$41.9 $20.6 $13.6
Towable Adjusted EBITDA Margin %10.9% 6.5% 5.3%
Motorhome Net Revenues ($MM)$299.0 $308.0 $271.7
Motorhome Adjusted EBITDA ($MM)$13.4 $13.0 $2.7
Motorhome Adjusted EBITDA Margin %4.5% 4.2% 1.0%
Marine Net Revenues ($MM)$87.9 $80.5 $90.5
Marine Adjusted EBITDA ($MM)$8.5 $5.5 $8.4
Marine Adjusted EBITDA Margin %9.7% 6.9% 9.3%

KPIs: Unit deliveries (oldest → newest)

KPIQ3 2024Q4 2024Q1 2025
Towable RV Unit Deliveries9,263 8,183 6,616
Motorhome RV Unit Deliveries1,680 1,545 1,422
Marine Boats Unit Deliveries1,127 1,042 1,171

KPIs: Dealer inventory units (oldest → newest)

KPIQ3 2024Q4 2024Q1 2025
Towable Dealer Inventory Units18,110 15,940 15,211
Motorhome Dealer Inventory Units4,386 3,933 3,994
Marine Dealer Inventory Units3,400 2,564 3,143

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Consolidated RevenuesFY 2025$2.9B–$3.2B $2.9B–$3.2B Maintained
Reported EPSFY 2025$2.40–$3.90 $2.50–$3.80 Narrowed (midpoint maintained)
Adjusted EPSFY 2025$3.00–$4.50 $3.10–$4.40 Narrowed (midpoint maintained)
Adj. EPS guidance detailFY 2025Excludes ~$22M pretax intangible amortization Excludes ~$22M pretax intangible amortization Clarified
DividendQ1 2025$0.34/share (10% increase in Aug-2024) $0.34/share approved Dec-18, 2024 Maintained
Q2 Outlook (qualitative)Q2 2025n/aSales in line with Q1; modest profitability improvement New commentary

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 & Q4)Current Period (Q1 2025)Trend
Inventory discipline & dealer healthEmphasis on reducing aging RV inventory; cautious dealer network Dealer health impact muted; easy unit relocation; field inventory aging improved vs last year Improving inventory quality; cautious but stable dealer health
Discounting & pricingOperational efficiency challenges; higher discounts/allowances in Motorhome Very competitive discounting; expected to ease into new calendar year Pressure easing modestly in Q2
Warranty/qualityHigher warranty expense hurt margins in Q3/Q4 Warranty costs impacted Q1 (recalls); doubling down on product quality processes Addressing; sequential improvement expected
Marine share & performanceBarletta share momentum; marine destocking in Q3 Marine revenue/margin up YoY; Barletta and Chris-Craft share gains Positive; continued share gains
Product innovationWinnebago Connect; Grand Design Lineage motorized launch Series M ramp; Series F Super C debut; affordable towable floorplans Expanding lineup; ramping motorized
Macro/interest ratesRetail headwinds; visibility limited Consumer confidence improving; Fed cuts; 2025 RV wholesale 320k–350k forecast “Green shoots” emerging; H2 recovery
Regulatory (CARB)n/aCARB engagement; solutions in place; FY25 guidance reflects impact Managed risk in 2025

Management Commentary

  • “The outdoor recreation space continues to face a difficult operating environment… Our Marine segment was the standout performer… We’ve seen some recent signs that consumer confidence is beginning to pick up, and we continue to anticipate an improved demand landscape in the second half of the year.” — CEO Michael Happe .
  • “We are introducing more affordable, innovative products across our portfolio… sharpening our focus on operational efficiency, tightening our variable spend… and aligning production rates to demand, including adjustments to our workforce.” — CEO Michael Happe .
  • “We are reaffirming our fiscal year 2025 expectation for consolidated revenues in the range of $2.9 billion to $3.2 billion… adjusted EPS of $3.10 to $4.40 per diluted share… For Q2, we are expecting sales to be in line with Q1… with a modest improvement to profitability.” — CFO Bryan Hughes .

Q&A Highlights

  • Dealer health: Financial impact “muted” and units can be repurposed to other dealers; limited need to move inventory observed in Q1 .
  • Shipment share vs retail: Intentional inventory discipline; do not correlate retail share performance to shipment share at this time; aged inventory improving .
  • Q2 drivers: Sequential margin help expected from lower warranty (recalls behind), productivity gains, and easing discounting .
  • Grand Design Motorized ramp: FY25 revenue opportunity “$100M+” reaffirmed; Series F Super C ramp begins Q2 with bigger impact in H2 FY25 .
  • Motorhome margin headwinds: Deleverage (~4.5 pts), discounting (~3 pts), warranty (1–1.5 pts), startup drag <1 pt; expect accretive impact by FY25 year-end .
  • CARB: Active engagement; compliant solutions in place including for Super C; FY25 guidance incorporates CARB impact .

Estimates Context

  • Street context: An analyst noted Q1 “came in below Street numbers,” and management kept FY midpoint intact while narrowing ranges, implying a weaker H1 setup with H2 recovery potential .
  • S&P Global consensus data was unavailable at time of request due to provider limits; therefore, formal EPS/revenue consensus comparisons cannot be shown. Values retrieved from S&P Global.*
  • Implications: Near-term estimates likely to adjust for Q2 flat sales and modest margin improvement, with potential upward revisions for H2 if retail “green shoots,” discounting normalization, and motorized ramp materialize .

Key Takeaways for Investors

  • Marine strength offsets RV weakness: Barletta and Chris-Craft continue to gain share; Marine delivered YoY top-line and margin growth in Q1, supporting consolidated resilience amid RV headwinds .
  • RV margins pressured but improving path: Warranty recall costs and heavy discounting hit Q1; management expects sequential margin relief in Q2 from warranty normalization, productivity, and easing discounting .
  • Guidance credibility maintained: FY revenue range reaffirmed; EPS ranges narrowed with unchanged midpoints, signaling confidence in H2 recovery and disciplined execution .
  • Innovation-led mix shift: Expansion of Grand Design motorized (Series M and F) and affordable towable models targets consumer price sensitivity while sustaining brand value; watch ramp cadence through spring .
  • Capital allocation supportive: $30M buybacks and $0.34 dividend underscore balance sheet confidence despite seasonal cash usage; net debt/EBITDA expected to improve as volumes recover .
  • Monitor CARB/regulatory execution: Solutions in place; guidance includes impact—execution risk appears contained for 2025 .
  • Trading setup: Near-term prints may remain choppy (Q2 flat sales), but narrative could inflect into spring selling season; catalysts include easing discounting, retail improvements, and motorized ramp visibility .

Sources

  • Q1 FY2025 8-K press release and exhibits .
  • Q1 FY2025 earnings call transcript .
  • Q4 FY2024 8-K .
  • Q3 FY2024 8-K .
  • Dividend press release (Dec-18, 2024) .

S&P Global consensus disclaimer: Values retrieved from S&P Global.*