Winnebago Industries (WGO) 24 Mar 212021 Q2 Earnings call transcript

Thank you for standing by and welcome to the Second Quarter 2021 Winnebago Industries Earnings Conference Call. I will now hand the conference over to Steve Stuber, Vice President of Investor Relations.

Thank you, operator. Good morning, everyone and thank you for joining us today to discuss Winnebago Industries' fiscal 2021 second quarter earnings results. I'm joined on the call today by Michael Happe, President and Chief Executive Officer; and Bryan Hughes, Senior Vice President and Chief Financial Officer. broadcast of our available the website today. being and at on is later replay a call call live website on investor.wgo.net our This will be our our to posted website earlier and The issued our second morning. release results was with -- news with second this quarter and quarter

company ever related posted quarter industry way a to and our earnings second compilation to as of we have quarterly serve efficient Additionally, slides and an context provide results our our first supplement, that should trends. understand

beyond Before to statements we Industries a in our CEO, to you results factors made many I the and forward-looking Mike? to to be securities remind during operations factors, turn company's of that and of differ involve are our Winnebago filings, number you under call statements. to over considered statements its risks I'd now Happe. are regarding which laws. a like With start, inherently SEC like cautions identified you which of that these The forward-looking statements materially are uncertain cause today's certain conference control, and encourage read. These President company could actual may Michael call in number would the from that, I

good and on morning Steve, you, today's Thank everyone to call.

your As and for always, join Winnebago in appreciate we taking us. genuinely Industries interest the time to

very great health wish you. pandemic, for much As we we the to continue of navigate each

offer our solid an interesting conclude quarter these Then financial our and start of our but Now, Bryan times often, and morning's Hughes, I to are detail. will dynamic this Q&A some overview results we will stated with second session. with a closing more have in will it thoughts very performance, will company. exciting it discuss call specifically for we I turning over before who

Industries gross XX%, We line and continue These Winnebago reflection operating we sales results. by deliver our in quarter pleased who with financial after top grew share XXX team, to do. net outstanding time basis are year-over-year and increased margins values extraordinary operational Industries especially a XXX%. are leading income a by expanded to our that another points of delivered they On basis, all while very outcomes Winnebago of the time,

greatest are teammates customers, are organization one we our creating truly for end partners, together asset tremendous very and communities Our enterprise focused value shareholders. and channel on our as

key deliver with do; commitment employees with and valued portfolio outdoor to and Industries our to of strong and leading continued win-win is impressive execution consumer portfolio operate excellence service in our Newmar our exceptional partnership a and one, products. Winnebago addition lastly, Winnebago our second, Design to create outdoor ongoing successful mentality premium In Winnebago and other we Industries' growth Grand agility, drivers: their attributable Chris-Craft; to of sustain and Number network, quality three demand for dealer innovation leading and everything brands,

undoubtedly via four-plus performance. acquisitions active a last fiscal truly year-over-year total represents have we year XXXX While been two years, quarter in organic comparison in the

was included to care. relentless The and we focus the XXXX portfolio. tremendous our luxury lineup in later, line appeal growing in Newmar's quarter Newmar's was quarter its full second on continue which quality year Motorhome world-class the and fiscal of year One customer craftsmanship, product first of nurture

company now positioned years portfolio of are brands Our at complete full collective enterprise second RV our a XXXX line results here fiscal compete vigorously and strong, in in place ahead. organic validate premium quarter is in of the year to strategy the RV

be our of results Differentiation is sustained can shared effect financial our value always distinct cause a you service and drive with that being the and strategic golden That today. and premium brands, and goal. and is all Now, performance. linkage of quality, there financial market threads our between innovation and strong are will strong

actions brands, ability quarters. our but our through premium in took input our related demand for inflation also numbers will constantly the navigate well. the as the environments, our take cost expected that reflects surging to component We ensure Additionally, and is and is cost team's display on to to challenging pricing availability, both coming

also ability Our strength industry our to at and to quarter levels continued performance products with sell profitability our to across of seen and the attractive continues discounting low the RV margins reinforce contributed in brand excellence, end consumers. our and driver of to our continuous operational strong et as cetera, and dealers strategic quarter second productivity, commitment in performance importantly, resulted was enterprise-wide sourcing, a improvement, profitability. And significant

of As increase XXX margin represents of basis a second last XX.X% our gross versus quarter points an year. result, consolidated

leverage about We maximizing current operational assets. our from return are the passionate and driving within business the

to Our manufacturing allows and peak robust executing supply we fiscal quickly half backlog levels at as fully order XXXX processes inventories RV dealer chain continues working shift made for confirm of are year to to and production serve of profitability increasingly an replenish in partners. in our well capital Winnebago-branded as us the possible the back terms against businesses build as in The our management. to running dealer order daily

chain production, supply supply our constantly particularly can. Class While as in challenges with A impact partners manage to best our work we demand-driven will any future regularly Motorhomes we disruptions

maintaining across year-over-year production from appreciative component sourcing be as transition results also we we and inherent increases into potential in challenges. That that is potential, QX that restrained But revenue an daily to was remains demonstrate manufacturing supply volume Our assisting full our X. Quarter figures network gratefulness eight context. given opportunity quarter constraints two lost net to for we hitting in continue almost the are due easily incredible portfolio. availability sales

The performance at for appetite XXXX dealers, our products both demand third from was second our year retail but our as consumer driver quarter consumers. end especially strong wholesale fiscal sustained, with of major

as in has and in certain our first results XXXX retail a uptick company's of and any calendar SSI the we three the pre-pandemic And in categories. industry. actually We season. sustained macroeconomic health continued to wholesale history. are challenging conditions, periods of seasonality seeing and execute large-scale incomplete during are next weeks and demand flattening expand strength retail. we the and X not often a the a XXXX. turn see of RV months an in reach significant through of our comparisons just comping to ago. decline health which early into The during Throughout versus succeeded retail in retail a in the spring of a quarter pandemic barometer Winnebago year somewhat wholesale disruption shown have outdoor selling experiencing our industry retail XXXX have and ability strong March as period are two of product difficult we'll numbers to marketplace and Industries lagging marine our even May over normal have three we resilience in is In other crisis effectively Currently, March momentum at period the proven our intense

implications Winnebago portfolio we customer entrants our significant this now, that retail capture are winter summer. The to they long as similar our friends performance are demand experiences calendar to securing and and the Industries that intent Welcoming to extraordinary business underscoring our have the typically January well strong lifestyle were the slower as February November Our new XXXX seeing through months need on consumers product on sales our December allows and presently even the and with lifetime value has outdoor opportunity term. provides. excited over the undercurrent about brands to family meaningful

a gravitate as on tend average cultivating to Motorhomes By of over-time models. buyers are upgrade and threads well into we products when service, pipeline Winnebago X-year and consumers First-time our Towables quality they X staying lifestyle. families both value breadth of golden of of to within grow broad the olds Industries premium towards as to innovation delivering every as the for growing

months overdue want racial XX the COVID-XX that the been Before marked pandemic live just the over has year caused an for the since have and on we everything terms been been it reckoning widespread turning unity deeply changed of to over virus, US. one inequality. Bryan, a grief in call deadly The divided by to the about just by nation call and how fact in heartbreak acknowledge a there's in we past

grow our persevere has resources, made a valued responsibility Chief Financial infrastructure we Industries' to to corporate continue have commitment and business we live to priority our communities advance I company As our work the play. efforts which Hughes. overview, in the to and that ensure Industries enhance and it also Bryan that over partner stakeholders With Winnebago be Winnebago initial call Officer and a will to turn the and

Thanks Mike morning everyone. and good

compared a Second consumer which quarter to $XXX.X is increase consolidated $XXX.X Mike Winnebago driven XXXX the by strong XX% as of for period brands. million great Industries' demand fiscal were revenues for noted an record million

Newmar speaking will for to included Newmar our in As quarter, longer it relates quarterly as were to organic fiscal fully no results. versus sales reported be we XXXX our operations second

leverage significant pricing, actions $XX.X EBITDA XXXX. The the result last segment. diluted per compared As of initiatives; fiscal Adjusted period compared by was same to were very share diluted to fiscal period. in profit reminder, compared favorable Motorhome adjusted second both pricing $X.XX $X.XX for XXX our which segment. XXXX. and quarter the XXX earnings to share basis in per productivity basis was Similar per in We year. were achieved expansion strong X.X% the is XXXX mix. to margin a is a operating margin increases growth, the by diluted XXX XX.X% to earnings while profitability quarter were period in earnings Gross quarter Newmar Motorhome and EBITDA performance the likewise fiscal for for QX reported productivity $X.XX initiatives, and year of of a Reported per basis increase record to and record the of earnings adjusted approximating margin compared adjusted driven to XXXX XX.X%, the in increased increase of increased points EBITDA unit $XXX share our same second another fiscal to an notably reported million last XXX% points of of XXX share the million in strong at XXX% discounts Adjusted quarter this in most an allowances; including driven points segment lower diluted XXX%.

over three-month basis favorable increase year. period period. basis to elevated a North Towables. million XXX continues leverage. I'll as up Segment unit XX.X% and points, was was of Towables quarter, segment performance XX.X% the increased starting market over with due to portfolio. Towable the XX.X% driven grow, Winnebago the Adjusted the share second to XXXX across up Industries operating by EBITDA for of segment towable over Revenues primarily $XX.X through the year adjusted trailing margin points an million on XX or demand consumer Now basis of $XXX.X for turn prior pricing prior same American EBITDA the share the were year, XX% last January our

the prior as Class very businesses challenged strong were Motorhome retail rolling period market impact by business operating up for the turn to pronounced through unit. were share XX.X%, year, increased dollars business, robust also to business sales more up let's of XXX% evidenced B Compared initiatives our to this our transition and of leverage. XX%. driven XXX as market $XX business in Adjusted to Motorhome EBITDA prior the revenues millions due supplier margin over $XXX.X C relative from that be We dynamics to lean In segment. by in the be that business past issues year, continues while Winnebago-branded share pricing quarter, market segment the to year-to-date. XX.X% other is focus and million, as estimate our Class improvements EBITDA pricing ongoing Class C other year. specialized commensurate a dealer last several last the January including to prior have increased XXXX. build by more serves be the to with basis on Segment supply second to B same Class RV are was unit Class a years, quarter Newmar revenue adjusted in our addition year QX to pursued model of in the points our driven Next, actions order to Similar the sales several of to our well operating continues up and unit were XX.X%, from efficiency Motorhome ensure the products up million, high-end unit the through quarter base to the second products. tens XX.X% B our by over that operational our three-month

segment. may by that While pricing we remain and sustained inflationary continued impact chain competition to anticipate continue of of pressures improvements equation, supply this well as net another we our quarter in our conscious to are challenges, margin as encouraged

level a the to X% sustained notably stated we to expect EBITDA of for yield to delivered the As this we have segment we've past several previously, above in achieve profitability continue years. that is X%

and our see leadership in strategic meaningful pleased focus segment. progress improvement to are our restoring this We on against Motorhome

area the $XXX the million. for continue to we due ABL Total leverage in the Continuing was X.X in now $XXX supply to the X.X cash Working lower debt-to-adjusted sheet. of of end liquidity, further of lower to fiscal from million. expect the times, increasing quarters. million delivery to of trend Now the including flow driven from half range both slightly elevated turning ratio, a and is and continued excess balance improvements this is net strong our to first capital which by times, our coming the but Cash is untapped XXXX. now decline QX, net chain EBITDA balance remained healthy now operations due our of generation X.X to debt inconsistent EBITDA towards targeted in $XX.X

rate XXXX higher discrete effective February items the year, period XX.X% for year first for favorable fiscal pre-tax tax primarily current and year-over-year XX.X% ended the last income in consistent same Our to months, increased six credits XXXX. due over R&D from to XX,

approximate in year, expect full our may discrete the sorry, the the and tax discrete occur that all of – XX.X% I'm currently from to remainder XX%, including results rate or those year. to items For excluding year-to-date we all

strong those through ratio our in shareholders. past, organic returning a growth, strategic Our capital position, communicated within to range our to expansion our managing to in remain allocation portfolio businesses our and liquidity consistent maintaining leverage executing priorities targeted the drive M&A, cash with investing

financials. quarterly second the my of concludes share $X.XX of quarter, on dividend back Board share we dividend cash will call $X.XX the April per That paid per provide During closing to turn comments. I a that, XXXX. a of and quarterly with review on payable XXXX just XX, of our our to January approved Mike Directors some now And XX,

much, very Bryan. Thanks

we to call Industries' industry approximately in retail Before fiscal retail support. versus and performance with steps field of to industry our forecast we summer. XXXX; three open our over bounce and on Please on touch Industry four exceed One, topics: XXXX, the XX%. taking midpoint the of thoughts inventory plus the Quarter comparisons to three, we forecast length questions, wholesale retail RV be RV that replenishment intention probable want cycle efficiently we considers expand estimates for March are year will single-digits, note upper It through at our I and two, wholesale Association May progress the will mid- industry Winnebago for capacity; units more fiscal priorities. of RV believe of Winnebago our of aligns that environment XXX,XXX XX%, in long-term important industry grow given our on June to especially retail But which quarter the approximately due our and the corporate three, in the recent calendar a Industries a fiscal last record XX% pace XXXX period will see September which back XXXX, year that comparison for retail responsibility shipment for is organization, challenging the projection company, should RV August to breaking is In retail shipments grow through industry August to same or XXXX. to XXXX, industry industry. wholesale industry our always strong, through RV while

three year is XX% field product inventory continue Winnebago field levels to XX% most to here lower the or RV show and marine inventory category, Our on reports than brand Depending anywhere ago lower. Industries' in in field recent between early businesses. inventory a quarter low the

field at days many, dealers to that run regularly to a months the desire rate. than we we fiscal targeted future to disruption pursuing own this will for to it opportunities. within most well more businesses projects turn turn retail severe of our that that capacity developments position to retail future company, entire replenishment actively health the reaching through our the have our organization to due higher unexpected performance which many, wholesale the will a are share in are is anticipate support year normal gain status. replenish of visit executing expansion a many of that operations several or they level pre-pandemic market inventory, and our drive there unless industry's in with take To macroeconomic their or have While from our XXXX We many

increase while active Some investments Winnebago infrastructure. not unit or here underway. footage will or in are physical overhead, expansion necessitate organic has other require RV a and do capacity Industries marine and square the of Each expansion addition in efforts projects business

Physical of gradually support with to long-standing that sustainability in of equitable demonstrative tagline, National are brand Winnebago career enhance create our are enable in Initiatives long-term the these a initiative ways communities each the meaningful month but with business. enterprise new Earlier color Great Outdoors, and parks. Industries to show Be more opportunities by like our share we these assembly that meaningful our vertical portfolio. our outdoor and national product connecting only with existing not up waste benefit these competitive space Park not us this of Foundation, expanding quarter. of women currently the new extensions, mix invested constructing XXXX is and year well lines We capital and new details improve shifting will manufacturing reduce output adding productivity lean reasons. being and along initiatives and online facility, likely assembly of across figures in results existing are line our capacity, within and financial lines into buildings, will lines today for our standing rates, continue Multiple fiscal spaces our each funding partnership investments and should of eight outdoor announced enthusiasts active buildings,

responsible also internally to external we pursuing on are initiatives, focused governance. In addition social

and Directors. as building market of Winnebago along company. announced our outdoor Industries Both experience inclusive and path of and experiences We to active innovation. have that guidance Jacqueline Kevin profitable Woods to more continues Winnebago strong valued extensive transformational help and their that two forward differentiated members progress and professional lifestyle last look Jacqueline in and are focused. the Just of to sets growth Bryant a continue appointment will competitive, high bring diverse performing new Kevin Board teams strategically week into deep input its Industries we skill

and opportunities core That consumers. advancing operations the facilitate Thank dynamics values with families products the remains to today our and time the fiscal for and appeal to forward are you market created questions. favorable by staying strategy, Industries committed on on Looking of healthy. and the half XXXX, innovating our and capitalizing operator second our communities, concludes of over prepared our turn you and executing Winnebago to the to of unique this morning. our safe our I will now remarks back to your line taking we your sustain hope

first question Our Thank comes you. from CL Stember Scott King. [Operator Instructions] with

Good on question, morning taking quarter. congrats a guys. and Thanks my for great

Thanks Good Scott. morning.

into particular of talk into that Class Thanks. we to not how on maybe how timeline the it. you but was And talked doing Maybe revenue It about the motorized on just in the that's can Winnebago-branded, core takes could remedied. if that to And it, A related get then little we just retail? if they're maybe in business you about long dig more? all a can shortfall dig most sounds last the I know side? as Newmar, quarter that bit

our business. As we shipment morning, not day. the is the in to active every Class chain optimized made remarks, say the That's the are constraints in of correct the chain to in Good that situation of Newmar, most Newmar A affecting prepared but definitely they're most happening you That are sense Mike. is supply comments Scott. supply performance are Yeah. affecting an Newmar Class in exclusively the This on constraints business. Specific

we continued we During and categories. to little to that's with days. component dealers manage work Winnebago-branded They Newmar they we earnings standpoint. definitely the that next performing well from brand Class are it weighted also our is are field a Winnebago those call to longer important most introduced by a business brand several where towards to our to retail, within today. last appears pleased take bit consumer going share Specific that we But the the strong are results the we strong retail specifically had performance has It motorized recently, the have but probably of our to of segment several is more resolve have products here get also foreshadowed under at had the i.e. suppliers hoped to the different in this results B inventory market seeing that positive. innovative in demand. through generate Newmar than at some retail is -- constraints the are continues The performing inherently XX Solis

our results we launch and Order on seeing Class EKKO. excited EKKO three retail for our move strong will been Class very from to consumers the shipment impact that which in and the months that improvements. are introduced start product, We other to generation we three, positive quarter very believe the in because of quarter more the dealers C now. about several strongly in continue has new And been the C direction has of and product a anticipate ultimately, our we'll EKKO

obviously we're us XX.X% this range. past, being seeing think about And level was low- above the and eye regarding way digits then low comments talk this is let's to sustainable about of it. right most that I with the your of popping expected. than profitability, mid-teen now motorized to mid-single Got way you in talk more staying the how about When

is this Scott, Yes Bryan.

B percentage our is referring you're because helping margin. there. of looking improvements what not a or the initiatives. standpoint also percentage big notable; As as that's a looking from of when things you're strong product dollar to there a Mix, call from a impact, operating it we the improvement a from in when certainly leverage are the productivity standpoint mix But there at Class driving pricing We instances impact improvement, There's a growth. our the lean couple driver growth several cited the talked at profitability: in I'm the is margin right? about

things this historical we versus several the often We profitability we for you've years, that are X% So, the here. to X%. in the contributing question sustainability that X% many fair X% get. to it. to been that comment the we've that level have The is had historically made expect margin and that improvements know around And seen so we of us notable you that

We operating margin out basis improvement in range. that XXX XXX also from pointed leverage the to point that is

So, think about of Mike we're certainly giving product line as a the we've line We of cited drivers noted that improvements the good and just here. the factor the of sustainable product improvements some go-forward are contributing feel some health terms also that the of clues will also be a But to productivity margin. them that and here. to our these we're in seeing of couple several

of where between while that et So, improvement the pricing we're some as margin sustainability coming product making guidance productivity to and and a we provide the provide improvements breakdown comments don't it's mix, and cetera hopefully, that from.

in jump the I'll it. queue. Thank That helpful. Got very was back to you.

Thanks Scott.

Our Wycklendt Alice next comes with Baird. question from

thanks taking questions. for Gentlemen, my

how cost coming expected cost in expect bit pass ability mentioned it of the You -- call Can you in that from a on? you your increases and more inflation manage briefly about in those the on the to that input talk quarters. any to detail

do through space industries feel to our a building pressures closely we pressures. across has a inflation that rumblings by either QX. affects Those of certainly we work commodities manner. price through is standpoint or product we've supplier might the we've very manage were inflationary This a seeing the our differentiator those one the those again. us. We suppliers. can been the in relationships us across manner. in that extent jump freeze from There's are year-to-date a with be. work supports inflationary morning. Good identify results with We you Yes. some our good pressures, to your about and built To We're in I'll proactive in certainly said, meaningful The certainly important it that QX many pressures. of with that supply relationship component commodity that that industry and with offset to in to in do we Mike to believe our like address that south this ideally, inflationary partners can anything accelerated market network that the some done Bryan we that the where them not helps line All strategic situations feel and intend further.

And greater so we we use we any do to inflation of pricing necessary going clear, year-to-date. -- that we But we've in coming the will we're where sure do in to be that what quarters. kind see expect the experienced to make pressures to quarters coming offset expect compared

period? ensure Great. issues then you're are with through quality components just And maintained and That's doing pace dealing supply the the helpful. that this of of between to are rapid some chain growth, what standards the Winnebago brands

Alice. you, is This Mike. Thank Yes.

did two on result if sure hard would an just two we working have partners. have and And believe the I we from have support stay a demand. wrong, from able just harder to quarter forecast And been our that astounding absolutely no than to in teams. that's suppliers the a our supplier way morning. because output is two not message year as than ahead OEMs I'm more I increase we make want been this The to there a comment without of believe but Steve in ago. the I accomplish our wholesale supply balanced units and correct market me quarter chain the XX% if we shipped quarter First to in in tremendous

our potential in regard. So, the constraints are from really that still us real are preventing but they reaching

is distinct and in has quality Really, question own an businesses quality. then, Product important was Supplier about your aspect specifically around lot think their processes of that. in of quality we And So businesses. we dimensions. assembly many post what a and within important. product do our inspections their Each do Certainly, ship-out operations design our in is also of you areas. teams quality assembly.

support enterprise is have an there quality team business that quality to also desired. as the We teams

give suppliers we several within the early our into with talking have contact of our that seeing it's question, of warranty processes on It's products us And regularly. and inherent while on to close part concern. operations, and is very service an that actively because our a signs comes in every our keeping facilities, warning been certainly if a our is something working early to don't processes dealer team indicator, have been has we something inspect but high-quality, also have teams with we're and part basis. regular great DNA about Our assembly that

for me. Mike. Great. all Thanks, That's

you. Thank

with Gerrick is BMO Our next from Capital. question Johnson

guys. Great. Thank you. Good morning,

Good morning.

had around, on of chassis. availability obviously a can chassis can't business. but a without build question I mean, both sides I you on worked be components the

So how look? does that

morning, Gerrick. environment nothing very been availability Chassis has is Good In perfect. this steady.

manage with but Our problems up keep hard time you, availability tell are with motorized with the we time. team chassis chassis I to pleased also would brands. suppliers our increasing how have from Winnebago, generally, demand, But within does both to certain the they worked Newmar

of chips us. chatter many, industry will them with the There many advance demand being of been are Our globe. by manufacturers materials, supply and the a the you chassis. longer what sort chain so and chassis the we our in we subsystems shortage might lead our on constraints in forecasts understand provide of believe bill chassis semiconductor the affected actual component as and auto give can long-range components have to what be they our imagine, months around in has been lot businesses work some versus those around to more based And time of related

that manufacturers particular because seen daily of specific chassis We pretty impact our significant But been to begin event in affect to date a with platforms. see contact have issue. it's our that Gerrick, are But not we chassis, the they that reliable. in topic chassis to the

one Okay. may. Great. if more just And you. Thank I

that price the increases about talking and demand. You're cover inputs strong

So, you about on basis, implementing what like-for-like a increases can talk pricing? on kind of you're

the that about innovative It the really been some we and display with When is market regimes. are product been the power to pricing pricing able hopefully motorized know quarter habit which will, many maybe and of been business out, Gerrick. indications a differentiated EKKO. you of and bringing previous consumers to not varies that with using those this Winnebago of like the almost resonates bring in across was tied and that cost, we've new we've – that market exclusively design product coming Revel, to here our the The and to products to products to all talked innovative those we've have past recently market differentiated pricing board

little So are teams year what adjust of we Bryan's pricing I discussing standard are probably agile months teams table in commodity a more or single will bit XX year to because low be from And believe changes for a begin businesses that model some needed, a the months. put they number are strategies X rise that price of transition are and comments risks model as but we pricing is se probably increase, next towards see our as we XXXX, XXXX, can't digits. the somewhere it probably you of will will higher give if inflation into other are is what as the average. a on starting But that, be lifted tell are and inflation going those we or couple component I away here, that and businesses year usually you were higher in turning some to that planning our that per see inflationary than model XXXX.

you, Thank Great. Mike. Okay.

you. Thank

Mike comes next with Securities. from Truist Swartz question Our

Good morning. Hey, guys.

think rate earnings maybe guidance, at Just kind I question is I out you're there $X.XX not earnings quarters sustainable of know, around, quarter, higher-level views and giving there's there's I that takes, look the that maybe in a until of question. but some us when and but to in should the a over the in know, kind backlog through the your coming around a we down? just come second walk of factoring starts puts really that be just we that?

Yeah.

I Mike, morning. first all, of good think

be results first and fair the We are quarters seeing it would trend say that, seen you've stronger XXXX, past quarters, the business. in very fiscal you're in profitability several pleased in a sustained the with to towards I two the especially think here

we've me would a morning stronger continue challenges noted chain be themes a give this think to that present. guidance. The of bit to I couple supply you make nervous

not Class the we for your for tell two. example. A mix. potentially inability that as Class potential you product to one. in margin from always products would segment, Class Bryan related Inflationary is ship the you ability level as supply And chain to to lag I then product gross a you B profitable about talked motorized So have inherently are price a cost an there's our business desire, as and to us, almost example, that pressures exclusively look as one A the products, yield impact between that's to probably if constraints is standpoint. benefiting our And at that. performance

at quarters, a see so alike. And believe, sustainable. impact may still shifts two that trend begins in next assembly you is constraints on aren't as environment three that A They business mix we've back right are come just is enough believe are due as seeing But there. the two no the we Class you some to profitability Mike to a with hopefully identically less that talked, I dynamic But now. quarters to

– with what so can guess we that's I this morning. share And you that's

give retail pandemic. changes year? if a the Maybe sense last helpful. any very that. us first if market in buyers you're that lot then maybe selling profile, younger just getting seeing selling of changes were what any demand standpoint, And into Thank versus the what's That's time a from the since in in is you of maybe consumer the seeing talk you're that for mix,

product level, our as from is there noted is shopping tell for And overall both on on last to families the towable going I remarks a week. the that side RVs from to the two, the actually trend as those specifically I'm prepared business. I are for of you, number level while pull a And you motorized I would be out we've say that that, One the two diversity more themes I standpoint. consumer retail from won't Yes, certainly both at And something at mentioned we families well. our And is, be continue and side. in to standpoint mix share a seeing report the present. and very towards smaller retail products, momentum consumer with continues positive will it

Class and trailers travel certainly continue to Class C B be and so And hot.

the in we shifts are And March we inconsistent are variants with state fact, actually on lot excited restrictions from dramatic our sort leisure the or last of last country of bells we again. not first-time are in be as or fall the also lifestyle XXXX terms using of XX, across seeing conditions of lockdown of continue hearing Mike, about So consumers. the those product no again first-time dilution products about XXXX. from the And yet in because of their categories from is pandemic present, a dealers and buyers to summer, in the alarm inconsistently real high options believe buyers

real changes. So no

a Great. Okay. Thanks lot.

you. Thank

comes Brett Our with question from KeyBanc. next Andress

Hey, unit? still good wait out a that morning. curious, and you retail mean presales I the there? break seen put report what Is Mike, with again. you're seeing if for to consumers' could in you recently shifts that propensity deposits. or down I'm have money any

are the I approach months units The dealer that Brett, that is of percentage do based low pre-sold by yet some of their products inventory present. retail winter strategy in consumers good field. varies who delivered sold saw on as well, or believe for that are how morning. the and be the level dealers. to brand still still over they or line We actual with marketplaces. of have behavior by And own to you candidly getting in That – definitely

behavior. So that we seeing are

The in is other credit encouraged consumer with by been our lenders speaking that we've retail stable. remains very thing financing

couple commented a that even bit them have a as has late. fact, In it strengthened little of here of

or credit consumer decline in financing. – we no And are seeing wholesale so on either side the

of cash of right they're They credit the now. strong fact using very that not lines – because levels, the the high their utilized are a they've banking have in dealers inventory as In percentage flow past.

a the and be to a delivered favorable now the come qualify for do able And buy do conditions them want the are to consumers very who or in on be so put later, unit that's and right unit down for that. a to to lot either deposit

up, little a a follow-up And the that. of you that so my demand production to Got then But do or color. it. trying is to or more apologize inventory just think That's bit has enough I helpful hypothetical Winnebago demand how your industry fourth things holds could I'm fiscal for up there? positively quarter, comp sense. that frame makes in is retail if capacity if if look,

we period at that some comments those fashion numbers same question aggressively comping in the was our And understand of inferred strong in September may I a challenge. the in through – anticipate XXXX the we December the fourth very really definitely XXXX positive that be Yes. period and against retail. will a in have

and inventory numbers. last I to back think point, lower I'd vary the go at And year? year by this will brand your we that category. by do levels than have and look to have

depleted. did year levels inventory pretty levels. on ago why crashing the field really I was the inventory part strong a think got we That reason of retail

my the as for against. XXXX But conditions a the we start that foreseeable we comp It just and year wholesale through in not we're enough to shipments means very five will numbers to think hopefully months get believe that numbers that's around in is the to fourth we're consumer I next take why fiscal strong confidence levels. state retreat. so back have signaling those that the half back start up three depend quarter condition said, see numbers. at be would run telling a we see the or four, future strong comps year. But wise the as the we business this mean it for pretty that. ago we'll increasing in four the we're And our retail a unusual year of conditions conditions And are against gut wholesale levels and comp dealer shipment will candidly up believe year on change record going struggling favorable of is field also virus from inventory and to of see Those to calendar normalized me favorable that believe, industry and months. I those But to you the retail probably probably comps the inventory then all and of to are you're going retail that in will other

Thank Appreciate All you. right. it.

Thank you.

Research. with from Wolfe next Our comes Wightman question Fred

Mike, Hey, to dig guys, into morning. the I just updated fiscal wanted year. outlook retail good for the

retail compares into these what strong performance the that Is you've of and high from to to that optimistic more date? ahead to digits down be is outlook? tougher Are to that some take seems through mid of, good. early that you commentary the I seen that helpful some actually encompassed high your as really SSI single up everything reflective get outlook, mid It'd sort March, mean of directionally everything single-digit Given on outlook? to you conservatism in look there baked road? still Is improved

estimate the year, credit happen Steve but year-to-date the is Yeah, comment months performance to year in absolutely. towards And lot the we fiscal leadership but company. models the through out August. by a within I by those six today side this next betting for product of as of by that that higher his would what you trending fiscal person our I'll models, our retail gave future. the Steve brand, for give a we our not is today, be we I we've of And had our If forecasting maintains of several reflective and forecast March the I with here, will years that Stuber run you month, this year, into and just probably tell morning. by think studied think internal

now. mid rolling the spring here. as digits. further? high right climb the see probably gets We'll said we digits Could as single summer a So that in trend even the get and to That's high single

We or So conservative. to be too pessimistic. I too optimistic don't certainly want hope it's

our towards down year. for fiscal it the retail relatively So we side would try that of the to but higher I lean middle, play always the forecast rest of

the balance just the on on helpful. And leverage then today. Super sheet Perfect.

basically You target. at guys are of low end the your

some of have a investing capacity you cash. are do You expansion amount in, to of guys but fair you on touched access the efforts that

and end you You mean look of you, through be there you range forward aggressive outlook Any could think helpful. that the is high guys in something again? might you backdrop get? would can how explore that strong exceeded color to I given walk So sort you that have, past. of, that have the the

This is take Yeah. that Bryan. I'll one.

capital is opportunities my that. mentioned part an grow certainly I strategy evaluate in our will we is it the important strategic do and to portfolio to of allocation those comments, As certainly

that I represents are. would a think our right we deal what X.X If as less that at said countercyclical meaningfully. to have the we our as cyclical X.X, to historically allowing risk really spike going don't it we much flexibility lower We the evaluate We'll it to that allocation pursuing haven't opportunity that speaking it time. feel right ratio spike to still the leverage much capital to adjusted right for opportunities that's ourselves strategic as is that there continue is the and even or know in specific that changed aggressively We're we opportunity a for fit environment, But X.X opportunities we our a deal. as as to now might are even for consider strategy. special good above X.X opportunity. that that for

Thanks Great. guys.

Thank you.

Jefferies. with Bret Jordan from question comes next Our

driven and maybe portion and on allowances? and break the was what discounts pricing We pricing product quarter the you by been morning questions it, this I on might out had This is Bret. a for Mark Jordan of are lower the in innovation by able but and missed to what have few have driven may mix improvement

in do to as the the disclose not necessary are cite discounts lower of also that to dealers, that detail. product. pricing move that both the but We We Certainly and of level our equation meaningful to way. part a then story margin and allowances it -- favorable Yeah. was

top quarter. the both our story So contributing line, are as in to margin as well our

to maybe they maybe cycle, five-year expect right be? might are typical Do earlier customers how the impact small buyers these recent current Okay. question And trade-up general. the maybe as thoughts And three these and I sticky on might guess vaccine we trade-in to follow-up how I demand? mean, now? to a units have maybe any see buyers buyers rollout surge on in on the should maybe you in enter to first-time larger

Yeah.

as that think outdoor has which And quote initiated a was how a versus is release changed do going about be that belief of press that lot believe actually and to a with possessions this gauge the family RV life their in believe spend believe solely power and time that also really both leisure talked popularity families of has quality sports, to already in morning future. of But pandemic in recently secular you And there, invest in of I of that the consumer like time our more we had marine, we have acceleration priorities categories it. growing we in or their what reinforced of desire friends we the they reevaluating our an happiness. name individuals they'd terms experiences will forward.

so are many in the demand for combined for reasons see in in with to and the we of those expansion use And the traveling case this, marine of those our lifestyle, combinations good that seeing bit the research products RV being of that, products. example even a third-party camping, and the lot from that of the we sustained, believe, the lifestyle, consumer Pontoons a outdoors terms and is country, really sources leading popularity interest in in a validates especially, is and

certainly understand a industry future. times. consumer realities the in demand We again, optimistic for the about So, operating and foreseeable very we cyclical are in dynamic of conditions

believe But to will sentiments those consumer believe popularity monitor do So will are. that we we increase. we continue always that what

travel sort post-pandemic be of note are the products. using up if auto wheels. trailers of in We're of new that sector our also believe an they're are move this fifth adjust I of around or early platforms. upgrading, awful we point that lot that and electrification the to early. in going change, pandemic, some products, And of different just understand too we of on products too to for a cycle the the likely to timing of have terms will upgrading to most activity will terms rhythms Towables tow. products going at impacts towing of end types in will lot will There's In to that around one that to either consumers

influence all So going will of to we cycles upgrade forward. those factors combine believe

you very much. Thank Great.

Our with comes Morningstar. David next question from Whiston

issues. the Thanks. supply Good back to to chain go morning. I wanted

that know you I after but side, And mentioned. vehicles the vehicles, storms making in vehicle or not experienced As Texas a you of you spot, kind also, I'm quarters? -- I'm or know the about you there's But issue of sure the what your problem. regard, been interiors just said any has shortages any light on you chassis of will electronics few a in you interior do the do in think it's foam have impacting the you semiconductor have your curious, in any

Yes. Good morning, David.

foam we component is that, that. regarding managing We challenges interior to cushion the chemical in mentioned you and parts. products experienced And manufacturing that particular in one seat for related have a are process those

well. constraints the furniture, But manufacturing. been other have in are awnings, varied those also the seen some fiberglass are I electronics, to We've to other working managing supply and that chain We suppliers really chemicals of recently generators on are mean, as across board. they're types within to from pressure with important everything components the products.

And status is the green you saw, and pretty regular list So the chain red, basis, dynamic. dashboard a yellow, at Bryan categories of is if supply on within look constantly of, sort those health comprehensive status meaningful. the I categories component that

components is a our or foundational but don't certainly, from we those of impact winter hangover of the business as today. bit time, specifically are an It a the components and So, having long of yes, for We just believe will products it some the chemical interior well. sort external is Texas components. not have in resin-based our or did on that storms the influence, in that

indication the or over Do you relationship the it light world parity? mentioned your priority get morning, is any the get the Toyotas indication that vehicle you of all the industry do industry, serving RV Good with -- you suppliers any good Ford, earlier, gets

mean, set their in I parity. businesses. operate manufacturers of And I it dirty get priorities would each with chassis some describe the of laundry the within own won't of their of I into of separates for strategies to directly not certainly, But usually those passenger commercial/specialty each with its suppliers division that information. vehicle embedded out respect platforms another discussions their in the vehicle business. chassis chassis and the manufacturer isn't as

communication, in in engineering the as constantly to are capacity they terms and but -- allocation of capital so resources it of and And manufacturing. manufacturing appears,

a on so yes, what terms often we So, very up been demand can to, in cases, transition suppliers as seems have commercial plans many strong vehicles? technology multigenerational all from chassis starting lot the do electric, those in passenger it discussion the the is of, they're keep managing the with also be with product has So side, that to a definitely chassis manufacturers vary.

given skyrocketing all your operations if going any? shifts, percent And backlog dealerships are Okay. what about inventories RV and is at are at three talk you down, up can of

either second or in operations have often locations, our those manufacturing of across with in we number So, manufacturing processes, the vertical labor, run And assembly each shifts. Indiana in and overtime processes. David, our we have shifts, in We strategies different portfolio. our Florida versus in terms of of more Iowa,

up for lot ecosystem in other in keep second see shifts we of shifts, But that allow our to in reasons specific the business, of culture so labor terms for of County Elkhart demand. second to has do not the done area to us assembly for profile. more RV and order verticals, Specifically, parts in a labor

second now varies. business candid chain shifts of within the regularly our it a deploy we be and opportunity not steady for component supply And is add are real So It's supply right shift you our that have very anyway. pretty enough with across constraints to all businesses. to something limited second the

It's light I really from different that's helpful. the So vehicle industry. appreciate that.

that's good or say. to hear I interesting -- should So to hear

a getting on Just like me fiscal versus high slowed It XXs QX into one QX. question Stock's buybacks. tear in for been the looks on final buybacks recently.

decision how the a buy like on impact stock to do or being does you Just not your back? this tear

as our allocate price. It's view are as of is one perspective, that we've in his a earlier, to is how terms In the growth. M&A. that otherwise that other some certainly opportunities Bryan. about are referred well through organic might that all our strategically as we feeding From Dave, expansions Mike factor the consider also And priority. certainly grow stock of to the current companies their this got we portfolio to capital in mentioned it comments certainly going influencing capital. words And we talked

QX. And were navigated certainly weighed as so are also that we those factors through

is question or share of prevailing point factor. weighing the at stock factor so, take certainly your that not price the we the repurchase time. one is And to would only step in It's to that the consider appropriate whether

Thank Okay. you.

you. Thank

comes question Sean Collins Citigroup. from next Our with

Bryan and are Mark Steve morning and well. you hope guys Good

Thank you.

on is rates. My demand consumer and question interest

historically, As can financed expect would Rates And of by interest consumer material any but you. obviously rates potentially you still you RV a any is how rise are color do you this on macroeconomic loan? much an factor very estimate size how industry-wide low up impact? interesting. be Thank

question. great Yes,

certainly that we'll several carefully watch them our one are carefully. factors very not of rates tracking external Interest are control. within We

industry's always than watched. It it been The impacts of usage price purchases. the more inflation. talked gasoline we've something has As does probably

as So appetite we're are so-called environment interest and their definitely is product. to watching consumers' to potential level interest Historically a gasoline and about all connection some the hypothesizing rising experts inflationary buy gross percentages of prices rates ahead. at and prospects there those rate of impact a a on

XX, been been Now the they've low last XX historically Interest rates we've years. at almost XX-year at been XX, have levels. over a now fortunate in period

varies believe the probably not elasticity that gasoline late so believe was rates be not a prices is rising that see positive or mean dealers with interest or are a their credit unit fashion. of in uptick is We But some of to financed secured the the or on XX% early RVs we from the at credit any in demand interest different XX% percentage number of definitely union units gasoline is consumer a it rates now they to And demand retail 'XXs. necessarily based of right 'XXs interest than line context is unit. to to ultimately into often or at does withstand financed in in it from actually be the retail but that rates. strong a will The vehicles may the and the enough retail. walk in loan But consumers because hard said type price of of derailed. that pricing, in Anywhere another today or perception, consumer

payment we again are very some again healthy it's into very so said a units stable as future. there's that's in the environment to Q&A And down earlier or required or with the dealership always business the lender appears to Almost subsidized and we initially. get retail think difficult it's financing a debt our that a for But product usually mechanism, that in through think retail we see. of today our the but tailwind majority that's financed at comments

Great. of That helpful. and the insight. it's you lot sense a and Mike makes thank time for

Our James comes from Securities. Hardiman last Wedbush question with

Hey anything guide, growth to good as ball. about a given morning in starting guys. year-to-date XX% think I like like and Great quarter. probably sort the that's your just do so your easier think And if the looks retail have harping fiscal it are third we accelerate crystal for on comparisons, if But people advance to math. sounds the plus if I quarter. going And what in far of think guys retail you I in apologize

your that flat single sort As pretty high does fourth here collapse and right mid of I comparisons but it a levels. big wacky to get not guess fourth about imply I with about that quarter quarter, think like it's only in pretty seems digits XXXX

sort that putting confidence we of that XXXX right versus an year past aside, I we'll your unusual last just think these math out coming pandemic speaks the of of was once get part lot sort So as sustainability of level that of qualitatively positively what's to comp pandemic? a I given early you've year lot all the these the secular of because the it talked -- trends about a of

math. respect people we a going question lot excellent you are as to of an it's said do Yes, the and that

optimistic morning certainly trends rest are that We year. that you our fiscal even or we this of -- of terms retail hopeful offered in than are to stronger the the

that Industries retail not for the market have year retail Winnebago we recall gain we industry to share. were talking Now, continued fiscal

own James due has hands a remain all in sometimes number cases continue respect, believe when stable under ability our long more environment. of in the too It and the wasn't that industry conditions elevated the of the million to has not X.X of the strong two kind dynamic in in to to comparisons retail so here we in industry we've XX range do I But of total and that most somewhere inventory, in in math XXXX. and you performance quarter I with shipments to trying the can quarter total done the terms million healthy plus. ownership to million to believe nose now And RVs rate. the recently consumers unit XX number been running field above our become popular. of retail the the continues in macroeconomic between do and was over very the to of time the ago have face see front With one fog

are So, as being not it more but well. products more sold healthy only with are RVs that consistently consumers sticking those environments, appears in

the to on are in lot that platforms, is sure be consumers Peer-to-peer, to we the we with working different purchase the from rental teams of sharing us more ways yet but consumers want experimented direct that lifestyle. our a you'll decision is to of to in will hear experience RV, get potentially touch business months us last in one. or more tried have not XX have lot the the consumer made believe that to a that future consumers the there's that One things future allow making new model doing platforms, things lead will in generation, our of reach

comparison So, to fair I right give it's apologize a you now, but I question. can't XXXX a XXXX

the I how can year and don't that vaccines that sustainability the safety this I me retail may asked we think we time. and travel pool. that the being becoming infer about run if and because of that over out asked James bit the have let to has there's to been we're RV over questions that this a all about that couple in of there's little one we there feel -- of QX on impact -- to a There's well might I agree tailwind at numbers pile hypothesis you certainly and bearish of question wane people will as the mean all as the your think, Yes, a past

think vaccinations may safe right? place can a versus to roll travel I agree the little been it's that that as wane for what might that year. desire that maybe we of this out Some all past bit

bullish for More historical going flexibility. the flexibility think is our of versus should -- and terms outlook that people the reason our have importantly in we forward

US is adds this that's endure that with case people where often frequently will year safety working certainly long-term use virtually to expansion There's past this flexibility. all of expectation can to this forced penetration expansion this more all and that educational we been lead they households, stickiness that flexibility realize workplace has that sticky in we've more that flexibility introduced it And under where that think greater is had work flexibility employees along feel of I all will ways. this this case. going that experiences the that by more more here use this think or past reason year agree the just RVs that and the can that so near-term industry And even for that introduced flexibility place earlier the be now been referred can in has to prevail or and on a continuing and et we that And virtually Mike that even than And then the we in in environment becomes all certainly for bullishness greater will call the forward And us will work road. more cetera. it. attended flexibility case that to provides. and use use people from

add for consideration that your on So, too. I'll just

Steve, Mike,, all Perfect. color. helpful. the really That’s Bryan, thanks for

Thanks James.

questions further And you. I any in don't the Thank queue. see

You may final remarks. continue with any

for joining the of in -- to many you to you us and talking to future. thank looking We operator we Thank really we're appreciate you, time. near talking to forward And your today. very look forward again. everyone Thanks

and Have participation in today's your day. conference disconnect. may a Thank you now you wonderful for