Winnebago Industries (WGO) 22 Mar 232023 Q2 Earnings call transcript

Good day, and thank you for standing by. Welcome to the Fiscal 2023 Second Quarter Winnebago Industries Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded.

to of call Intelligence. Investor like Posadas, to now President Vice Relations would turn over the Ray I and Market

may begin. You

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

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

over President and our to CEO, I that, call Mike? to now would Happe. the With turn like Michael

return cover of I Winnebago we performance interest detail. our an and XXXX provide to your Thanks, the the morning. closing quarter call our pass in more Bryan Industries second your and will financial appreciate will Ray. turn our questions. results. to offer in We results before Good some overview during fiscal discuss taking and to earnings Hughes time thoughts I quarter then the to

Winnebago environment. in demonstrate a face outdoor our quarter model industry dynamic continue results business uncertainty the the macroeconomic Industries' to of unique resilience of and second

and trusted and strategic one the with a recreation focused leading time outdoor business, of been branded some for financial We the most transformation ultimate premium on cultural, world's have building the companies. objective of of

employees, balanced the financial ultimately, potential, navigate adversity. than customers and diversified more future, this And more have engines investors. do its in realize peers able most to smartly drivers and we of good A being results taking that work our volatility great can a face a and and short-term simultaneously of the invest example and prosperous is of to in of care vision produce while solid of quarter better organization continue to to grander its hopefully much

the of a As helped outdoor diversified recent quarter, by highs. evidence allowed and demand segment moderate marine continuous for benefits softening the of and challenging towable our interest improve quarter first in in including offset macro performance many continuation a of the despite And of a of versus our Marine we same portfolio, continued cyclical consumer second more the recreational dynamics vehicles strong in another the in the to general experienced sustain the cost reinforced commitment our of efforts from competitive as chain well us efficiency period to our as disciplined inconsistencies, pressure across ago and year higher to supply tremendous to double-digit inflation, segments. operations, to production margins motorhome comparisons management growth, rates

and along our engaged brands have on members and market of year, throughout of I is how with to am Winnebago we team share our manage Industries risen trends to challenge to the delivered immensely strong these proud relationships. continue employee our difficult the actively decisions daily necessary Though the premium of rest results. balance must and and customer anticipate profitability, Each fiscal

premium we our innovation are XXXX organization in evident invest capabilities the to portfolio than second The needed quarter compete simultaneously to stronger brands value and us of of allows well, effectively we future. in that the in in performance validates were and and business so in Doing XXXX. a is our industry-leading digital diverse growing

margin Ultimately, and XX.X% earnings second net in of adjusted diluted per the quarter, share $X.XX. Winnebago gross revenues, $XXX.X million achieved of Industries in consolidated

solidly levels down market record reflecting compared exceeded last again While year, the underlying historic of these to results outcomes appeal our pre-pandemic above operations our of strong products. agility remain once expectations, and external and

driven key Our second by factors. quarter results were few a

with our of to strength increasingly portfolio, outdoor resonate the lifestyle First, product population an continues premium consumers. which of diverse innovative

the in stable share brands, RV conviction have strong premium have has our even softened. which market maintained of market overall demand ongoing net We as appeal RV

share Aluminum iconic brand Chris-Craft Pontoons the of growth to market the in the fiberglass currently. demand consumers brand on category The Marine quarter. complementary Marine fastest-growing category steady the extraordinary has the making contributed in with the also achieved And boat growth, for Marine the of side, Barletta and our segment

continuously core a we investing innovation are products industry-leading to to premium develop are of today, We extremely we remains proud in our pillar strategy. suite have not content of the the still, but stand of market

continue to engine, the our consumers' the experience. fully is to latest to digital of expand in connected XX the the Marine Boat first example. owner recent the monitoring Calypso February just the Miami MyChris-Craft through Show the app, GPS, battery and CALYPSO be On The data launch as of International Chris-Craft the side, Chris-Craft customer and is builds real-time enabling at we XX enhance

showroom entry-level brand, dealers of this young, brand. giving new Barletta's pontoon reasons increased Aria commit exciting more launches and recent offering its space ultra-high-end are to to the reserve

Toy the AIM affordability increased extension it the side, XXXX popular Grand its when trailer most. Design's was Imagine momentum Pros Best On the customers they RV need offers to of named line New MAV Product RV and Hauler travel of Year

and with its Mercedes the flexibility ultimate continues modular options trailer plans for a to XxX functionality. brand new expand iconic partnership Class Wagon add Winnebago proprietary a and chassis, Adventure paint on mini hashtag B B vanlife platform product, to travel Our a of Class floor the giving launch interior Revel the consumer line

with come diesel XX launch first Chris-Craft's GTE unveiling New brand, the the Winnebago ensuring floorplan innovator technology zero when all-electric house prototype recent a the examples leading the Aire a across adds second-generation a Furthermore, latest fourth our consumer we innovation battery zero-emission system. Newmar The of luxury of all-electric emission electrification and and in remains an line lifestyle RV are lithium-ion offering developing growing the eRVX, standard Winnebago recreational accretive to boat, the industry Industries becomes brands, emerging concept outdoor are now experience. the

commitment factor our and our and appropriately conditions through planning production strategic to our respond our to quickly operations Winnebago across-the-board sustain contributing quarter our evolving Industries industry The enhance profitability sourcing cycles. our to in strong excellence capabilities is ability to next ways that variable operational philosophy results cost and in market key highly enterprise strengthen made-to-order is maintaining and and leveraging continued second consumer insights allow to shape to economic and business structure.

maintain overall We demand will increasingly inventory mix product levels and to continue environment. dynamic balanced to partners and in closely dealer appropriate with our work an

work our in to mutually also to We watch a beneficial continue address inventory manner. very precisely closely channel with aging dealers and any

of a quarter. in these to had the impact across produce our efforts margins All direct second competitive all on ability double-digit segments our

resulting as motorized a to Recall resolution other by Lastly, navigated Chassis challenges, during in to XXXX the the well supplier, lower-than-anticipated or Sprinter year quality XXXX as Mercedes-Benz supplier our of impact quarter. we component revenue constraints the model successfully second

on and challenges Winnebago of at navigating ongoing less bottom line, Though top inefficiency be risk are team going decreasing, frequency very we that to mitigate fine severity closely. depth our is outstanding We are Industries impact forward. the are presenting supply that these to and having and supply continue practice dynamic, global monitored our on although fortunate a must chains the constraints of supply be

manage management, variable ahead, will working structure Looking dealer leveraging on our highly production dynamic navigate cost and continue we with by cost and focus demand with to a a disciplined and through closely profitability our actively partners. environment

to consumers. balance also capitalize continues will our future, the capabilities, of business our of make our strong positioned on cash further to achieve and opportunities and strategic cycle our portfolio value diverse Industries on in remains and service We enterprise growth through reinforcing threads sheet our quality, innovation to premium resonate ensuring well our generation long-term goals. with to investments continue and capitalize and strengthen Winnebago creation our golden increasingly brands flow

Chief will turn our With more XXXX Officer, financial that second results fiscal quarter now summary, to Bryan Financial review in to the Hughes, our over call detail. I Bryan?

Thanks, Mike, and good morning, everyone.

of quarter million, decrease reflecting billion Second to second quarter approximately a compared XX% the were XXXX. fiscal revenues in $X.X $XXX.X of

offset are carryover by these prior As decline partially increases Mike results unit the segments. across expected from The in lapping record-high all was sales mentioned, price pandemic-driven demand year.

in Our diversify our beneficial the versus efforts prior the by in across outdoor each quarter, recreation evidenced multiple segments premium as variability growth year of proved portfolio space segment. of the this brands to

and businesses, X% produced increased XX% past comps. on were was industry. Motorhome X the portfolio-leading the towable results with result XX% the quarter. therefore, meaningfully just in the sales sales years mix The Marine sales down of relative consolidated our RV to improved down sales tougher a sales

beneficial, of quarter. was second within While towable, in the our mix margins segment and marine our double-digit all teams drove execution motorhome each demonstrated business as the disciplined EBITDA

increases by were last and XX.X% disruptions, costs, million basis margin that partially offset XXXX. volumes, supply was the Gross input second of loss for of and profit Gross higher driven but were These implemented lower price declines $XXX.X carryover profit productivity year. XX.X% from quarter material deleverage to by the were points quarter year. than XXX $XXX.X last lower decreased from during million

Operating the quarter, quarter decrease income $XXX.X a for year. second the of for was XX.X% of to $XX.X million last million compared

period. XX.X% income net than the quarter lower year prior Second million was $XX.X $XX.X the recorded million, in

per was from Reported per for prior year. decreased of period from earnings XX.X% EBITDA XX.X% $XXX.X earnings $X.XX share per to million quarter, $XX.X the Consolidated $X.XX. $X.XX in diluted Adjusted in year diluted to of share same year-over-year compared million reported quarter. adjusted diluted the share $X.XX was the decrease earnings a last

earnings for As convertible fiscal standard a the impacted the and of reminder, accounting in notes share. quarter first adopted which the accounting treatment XXXX, new per a diluted calculation our we of

the diluted adoption the face per expense share Specifically, a the earnings an of the the shares in of outstanding to statement interest and increase in reduction the income is of calculation. on impact number

such we convertible we adoption accounting call economic pronouncement equivalent Our this benefit on adjusted adjustment of the that note. an be recognize how the previously the adjustment with results EPS basis issued new we that overlay in have following when doing implemented of spread we the been to

in the consumer the starting the of XX% second I'll segment, adjusted down year. now inventories. performance dealer This declines for compared by for as our of million by volumes production normalized driven result go Towable well primarily our with segment. as prior to $XXX.X our segment to demand was the schedules due Towable were over quarter, the as Revenues impact a unit normalization of

fiscal of XXXX second up revenues up of to XX.X% into our quarter quarter to put the to XX.X% second demand performance compared context, and are second prior To by segment XXXX Towable the compared pandemic. quarter the outstanding the catalyzed the for

to growth tough We the of our and for continue even are come sets comparisons. confident to record period long-tail Industries years Winnebago propel as up the impact environment normalizes will year-over-year

as from primarily Segment higher deleverage million, the adjusted prior EBITDA compared a $XX.X year down and period, was result the allowances to of was elevated. prior when year XX.X% discounts demand and

XXX was Adjusted XX.X%, decreased down points up focused on the dealers when million, Backlog points sequentially. $XXX.X EBITDA to basis inventories. their margin XXX increasing XX.X% prior from year year-over-year, down were but

offset unit second Motorhome year of approximately product down million the period. from Turning during carryover volume recorded decline decline, revenues prior quarter million, This and X% delivered We $XXX.X slight $XXX.X mix. to the partially price our increases the favorable segment. result by was of

$XX was The impact part estimate earnings our release. than Working anticipated, at the what the we $XX we had recall. to to prior million to had now [ph] than Mercedes-Benz less earlier remains impact million implemented and capital due than expected, had elevated therefore Rather second slightly the the and anticipated communicated impact remedy smaller impact, than we a revenue. had in quarter we recall a

challenges, from second basis partially million, adjusted offset the quarter to margin XX of XXXX by a supply prior points and increases. carryover Segment XX.X%, the was deleverage, price of EBITDA productivity $XX.X year. decrease was down representing chain due from EBITDA X.X% Adjusted

though year-over-year the segment inventories replenishment to for pockets $XXX.X driven million, of Motorhome of decreased levels Backlog gradually XX.X% dealer levels, inventories. returning remain. are normalizing of appropriate opportunities to Motorhome Dealer by more

ensure they at always, meet the demand. to consumer As have appropriate continue to to the our closely we partners dealer products with need time work they

particularly were marine market share. Barletta, Finally, in $XXX.X and segment, which which the growing performance the Pontoon carryover brands, XX.X% our Marine from as its encouraged a the We Revenues second continued strong continued Aluminum let's price result outperform market for gain our up turn of increases. prior demand year by quarter. to continues category in the million, remain and the to

$XX.X was the Marine XX Adjusted last the last than EBITDA for points And year. basis same million, EBITDA year. period higher margin XX.X%, adjusted XX.X% than lower was a segment

second down were we replenish prior XX.X% the space. inventories backlogs dealer Our continue compared our as year work quarter marine to in the to of the

to will continue our marine markets our always, we monitor closely production trends As demand and accordingly. manage in

now the to Moving balance sheet.

the end times. $XXX a million debt, debt-to-EBITDA had approximately the outstanding approximately Winnebago ratio of representing Industries X.X As net of quarter, of in

healthy Our a continues capital balanced and to balance us sheet strategy. be continues our for to strength allocation support

we further business made to and making are We our investments drive improve in our progress the in strategic growth operations.

the year. we both businesses expect manufacturing are to constructing the our the completion, half fiscal and in of capacity both expansion, we online for nearing example, For come marine are back

to as reminder, the which, the returning to as of by XX% We increased remain was quarterly with of share capital payment during per the investments dividend our shareholders fiscal our for by a to XXXX. $X.XX balancing fourth committed evidenced these quarter quarter,

know all vulnerability, are I and have interest, Lastly, of recently others signs Suisse. watching most stability Silicon Signature including we following Credit of the of and banking that collapse the Bank Bank the Valley industry great shown with

we be Our the to exposed and the not institutions sound. that dealers a monitoring continue failures to evolve. the stakeholders of relationships point, nor we own closely been situation, retail and the of to of this aware hearing that likewise they remains credit This availability or impact or are have been would to situations have are impact banking with believed key will fluid that are bank to monitor at level. suppliers are key as situation wholesale the We

to call comments. provide some With to back that, you. to I back closing turn the will now Mike Mike,

Q&A remain value creation our Despite appropriate I share Thanks, closing we a will targets are achievable. confident consumer Bryan. be robust, that demand our long-term and our comments. RVs, session, of market are current brief revenue, for for In softening of anticipation robust growth profitability for the long-term opportunities in and and and

to boats experience friends and/or healthy their some adventurous RVs well-being continues rental diverse and outdoors and always RVs increasingly during emotional the old, are or in be to and Consumers, outdoors. in using Engagement extremely cases, young physical XXXX. and and boats

supplemental slides trends. contain participation updates Our those fresh on

recently interest to XXXX XXX,XXX units rates As anticipated shipments lowered many this expectations on for Industry higher mid-range calendar environment, call to their RV are and macroeconomic a the Association weakening of consumer reduction RV an response discretionary a aware, in in spending.

on about While dealer plans XX-month shipments the based XX,XXX market in dealers destock XXX,XXX are from XXX,XXX we outlook have respect the expecting impact these on currently trends in to channel end hearing are to more the our calendar business our seeing range, customers, we we are market, period. for is and to be the bit the having anticipating consumer, unit Based the over XX,XXX XXXX units to what on we a the optimistic. calendar

clear will crystal spring dealer be no have, season yet-to-be-seen of selling the friends that retail still of and and that confidence. numbers or supplier elements by of the there vitality our ball any consumer the Of ultimate summer is plethora contribute the course, determined to we nor and

investors can financial models Our our or navigate worse are sensitivity run better. that assured multiple scenarios operational anything we prepared through rest and and to into planning

in rebound achieve RV previously targets. we a As fiscal are our XXXX financial announced shipments on we counting dramatic stated, previously not have to

market achieving improve continued to and toward operational our share focused growth excellence success service superior predicated delivering to on innovation Our further primarily and on profitability. those strategy, quality, expansion the of organic execution is goals drive

augmented in our likely expanding in only believe financial but flexibility we opportunities. growth to with maintain imperative will if acquisitive opportunistic inorganic We organic platform, the possible and be those ample Our of strategic be can additions.

its share we Winnebago short-term can year ahead, quarters is baseline and own unanticipated to by has Each other market our Looking and Industries profitability are maintain positioned the our challenges. any of further confident XXXX flavor in well that business. or and be expand grow affected of fiscal

solid to wholesale consistency us. a more our revenue yield. the turn line concerned mostly macro market on the of the with The am the I than I in ability am profit available to about is ahead revenue dependent months former

of While the impact can we competency a latter directly. profitability yield is that more

We by a that lifestyle premium and portfolio of right a up shareholders strategy. have for customers to resolute diversified discipline company all the a remain delivers We and outdoor to strong operational a brands, the value lifestyle and innovation premium term. a talent, backed long commitment outdoor excellence, building financial allocation capital balanced in

the That will Thanks your Industries. the to interest to concludes questions. line Winnebago again the will over prepared our who back morning. I in your remarks operator turn now open this for call

Instructions] with Thank question first Baird. [Operator Wycklendt Our Alice comes you. from

may You proceed.

Yes, for helpful on want industry. all thanks thanks, just context gentlemen. cash Good on morning touch I the Maybe to actually. flow and the

cash You and working capital. we impacted the know year thinking in though? from the modest operations has flow in How second [ph] be first half half, that about should another recall

Thanks continue in and particular, is as the Good challenged have. pull-through. amplified by supply we well to in further challenges the due decline demand for continued we Yes, morning, working the This be chain question. capital, that other Bryan. That, to is retail course, of recall, as Alice. with inventory

so historically. what than hand, we of had And goods having course, finished end have up more on we

a what, as flow that now for half contributor would expect or would past, and we been do the we with to as Going to the expect catch that in working about to is, think forward, detractor cash we're versus then so. speak, way so right the markets working up, some it and decline net end be year it's yes, capital to unwind the seeing capital of a

it. So we're how that's thinking about

the don't did from but strong inventory of long that there What's is And Yes, the standpoint, to of it on current then environment? X,XXX the what, for level XX% increase history there – Marine an expand thanks. you gains have Do growth? quarter a helpful. share and We to still over segment, a given room right the just Or inventory drawdown? units. see market your there. have That's you data

Mike. to question brand Good to inventory field. just before Primarily, the low pertains your get brand. Yes. Alice. Barletta acknowledge This I'll in morning, is the continues [ph] the Chris-Craft that brand, And Barletta have I

have marine branded an standpoint, So dealer of manner. more smallest put our our Chris-Craft to in business to we smallest and X channel that's from really opportunity healthy while a continue into businesses inventory overall, the the a

to transition, the Barletta roughly And X% we healthy that X X.X% to approaching a share market have elevated years very are while share recognize that Aluminum a has from numbers, went standpoint, than in From they positive unit historical market. certainly business a transition. Pontoon gross brand this is in inventory about a is ago

just also to recently introduced new product They lineup. have brands their X

So introduction the from some Aluminum market they about to are X a pipeline a brands, the fill of about Pontoon which the more pontoon entry-level competing us from of went XX% the to and brands XX% to in in of Aluminum is competing X brand from that brand go especially seeing you Pontoon called Aria, allows market.

X The pontoon last in can supply about retail that to be chain because dealer for we there have of of don't is to the Where factor States. go primarily believe neighborhood a much, Barletta we after recent the I'll and probably we somewhere United still in business. markets mention open talk X Barletta, dozen constraints, this

side elevated will most that, because but remain likely the we you so is the Barletta on historically, appropriate see the of believe, levels probably marine of And transition. inventory

down at and recent expansion Now Pontoon manage has these production category. are brands into Aluminum appropriate disciplined an That rate new will in months, new and level. carefully we watching certainly and the or markets any of slowed here we

all me. That's from guys. context. helpful That's Thanks, Great.

Alice. Thanks,

Thank you.

Capital William question comes [ph] Markets. BMO Stanninger Our next with from

proceed. You may

Hey, good morning.

guys had XQ. much guys You [ph] do in out a headwind called X Thanks. a XQ Rico and million expect? $XX tailwind of sales Mercedes-Benz to How in you

the if but we're be to forward on to some, on view. that. not We're hard might counting there's be it, catch-up not a It's in clear. Yes. there And counting predict

or what Okay. And inventory year earlier? then is 'XX currently dealer model percent of

morning. good This is Mike. So

we And very number the the just not going of not of analysis here We we and model are In know that many brands to all unhealthy. businesses, numbers and conducted our are. understood we that that close paying share externally. year But side those what recently, is. attention marine subject. We're that specifically very on is an feel of number RV our 'XX to comfortable what have inventory

than We care inventory have take where of and the places I a heavier try that. is of precisely couple that aware channel working our model and like, the to year with of partners are to businesses 'XX a would little

year So in model here a we do XXXX. the headwind view of 'XX inventory as not Winnebago for Industries rest significant

year August We probably really until that later again introduce to RV 'XX in late the time model plan our do to for summer, not July September product this frame. business through

time will coming a us certainly on year the model inventory. 'XX future. dealers more 'XX it begin good 'XX focus model and with talking about of in to which up gives year is little 'XX the ways because year events that our product timing off, some some We to dealer allow model our still But is

Perfect. Thank you.

Thank you.

comes question from MKM Stember next with Roth Partners. Scott Our

You may proceed.

And taking guys. thanks morning, questions. my Good for

Scott. Hey. Morning,

activity about, you in maybe into side little guess, towables promotional the You of talked dig business? Can some quarter. bit the I the more a

up least held darn pretty sequentially margins at Your well.

So that was in if quarter? anything else in do? can had the that discounting profitability of you've towables level about you just the And to talk there helped the

and at dealer a Scott, some this then standpoint, we seeing, have can to margin promotional Bryan behavior discounting on is Mike. the last that the been I'll year. activity seeing discounting retail here the some we're meat speak bone over From of return the more to certainly add side.

segment of margin XXXX. XXXX at during early their had than peak gross they seen lower probably towable and level days parts margin are within And a operating so dealers certainly the gross in

shows. you graduated based that promotional of each So to move see product. activity promotionally on the inventory. And some you the in dealers some that seen age returned of against cases, the level And a to certainly competing have of other have at

inventory. provided been we've times, aged that since at now men, here address to ever an help businesses certainly dealers have is excessively I've support years. Excuse And done activity our that X

what So is we this a on aged excessively believe inventory. a dealers to really with partnership healthy return our is

The backlogs in and some once had I as of that orders cases, dealers, canceled we say, have last submitted, would discounting, had the X last months they have in an is retracted have finished move of form dealer that in seeing. a we've inventory used open the And level goods, that consequently, obviously to been we're carefully especially our higher inventory than RV working with brands partners, to on careful way. elevated

And this irrational but you discounting tell quarter active discounts, margins have the not were can do from last those to we will want had do we of margin? that that on reported that forced with in you to some anything we inventory lots. of business carefully side continue forward. to open that comment Bryan, we And our our own going that on monitor been we've

Mike. Thanks, Yes.

QX. Just seasonality, There's relative most consistent briefly, historically, the look for you notably if in course, Scott, it's business. at to some pre-pandemic, the of we've discounting very done what

but the to expressed So motorized on the just towable discounting just maybe little give than you the QX percent in pre-pandemic a was some elevated, perspective levels. to of bit side, on our a side point as a there. less sales, similar And

overall pre-pandemic consistent activity. with pretty So

up barren accelerated to Got maybe But pretty know been sharply of was just product the of faster-than-expected the on you a sales resolution year-over-year. pipeline build-out obviously, that supply dealer further in the only could has talk easing. pretty while. - Cs I as then falls And were the were there refilling with of in few for and pipelines retail - an inventories had it. that the off And there's chain Sprinter is about percentage the Recall, but side, some points. motorized Class do a

you've say that motorized towables revenue why couple I hit on a the significantly revenue. to less as than factors Scott, would of our declined

return the The Mercedes as allowed to on issue I say months. you of would said, the to shipping have factor for many lot faster our recall resolution been chassis safety those Mercedes is, us that stuck first

because better of done the year. chain for excellent channel has of has dealer business so year And business in of half Newmar Newmar and an side. fiscal a Newmar last refill the part consistency our is X doing two a the supply the better been on first the production to working cadence quarters and have of job the this Number of

I would the Class side for Winnebago. say third the C is element on

We as, product. we to the momentum, ago been have the well on EKKO introduced particularly View nice a market as Navion year our retail new seeing about and some that

And that's so to ship order those us those in make enough brands. particular to some continue they certainly allowed strong have retail behind the to more that inventory sure sales dealers on to

at increases the comp dollar-wise a the our aided also significantly in benefit price seeing actions product, level. inflation year-over-year of price more we raise had did pricing are we You of but when We in on the elevated some year-over-year not is quarters. definitely took that motorized was taken some prior previous QX being by of the

if to through to start you for products We've dealer from expect how And 'XXs, work talking about in. we benefit And the situation as going needs time last to clearing I Design? dealers the one the ordering could line towable as would right. All guess, Grand sneak one be back been just when out is such to what rebalanced. I

very do Design dealers frenetic continue products to pandemic Well, difficult certainly on order currently. is depends such rate all to it to peak because Scott, question, The compared answer retail. Grand retail those really days. as It's timing is the reduced

of seasonal will We patterns business. combination see in activity be certainly continue we our here weekly to in spring a a the ordering on retail to the And late that monitor basis dealer retail months. summer

they're over the course to In of looking levels destocking addition achieve year. of the this to that some calendar

not year 'XX introduce will to should and until products. later and previously, to that good of on disciplined focus to to chunk this early try the stay As model product we us I summer, stated late spring year model a those allow mid-summer 'XX

agile forecast, on But when a we difficult higher us. way orders what we prognosticate a to cannot the is sort just exactly dealers dealer react weekly literally to are will need to reignite basis the a and That market will to on to extremely and and telling level. to retail not remain of pivot in

Got it. guys. Thanks again,

Thank you.

from Our Fred comes next question Research. Wolfe Wightman with

You proceed. may

gave. wanted think Hey, go that much just wholesale retail that and guys. you I commentary you quarter, follow pretty just I balance. to the have be But we come sort I the If levels industry up understand overall to guys were down. last expecting on in of back look, and

Now you're a destocking. little for of calling bit

just a what maybe you dealers going exactly what inventory and from can level forward”? and “normal you changed feedback of the So been sort through think for has like means walk what that

Yes. Fred, this is Mike.

comment formal and in late the we And industry levels mid-December. in are back on shipment March. here retail last was all way Our

And lot has that's but since peers or volume seen XXXX. why lowered mid-December. our forecast industry OEM RV not the Association, other their well you've of almost as only supplier so one a on every Industry And in changed

So to we reality enlightened just and dealers of turn levels telling desired are market of continue forward. what us be our more conditions the terms in by going

in so see be They expelled the little comments amount And from progressive bit believe the that of the are we that needs we'll of inventory a field, if thoughts. latest and today we more numbers terms our in that offered happens. are field to prepared

as things than a lower also react well. the are have this those from to order than worse. better summer were have in ability our standpoint sensitivity to retail in But us businesses plans we quickly get prepare if for to numbers relatively be the expected operational that - And

So far similar candidly, sell-side latest candidly else, lot our range. everybody analysts many too It's range And of saying. most the a are of peers other in you, a that's were generally our as what off really so... not

sort year, the of just into that going think positive rate the on the Do given help of stay that expecting you can Is going looking change as out, should then on you sort half discount? of it Totally fair. - a be for is back What to be or the us we ASPs we basis? similar? side? think towable about particularly the will fiscal And of year-over-year on moving

Yes.

it's even activity, in and quarters we've pricing the been of terms stable last back here - of going the In into QX. couple pretty

year. a be pressures, on last we stability, chassis but the expecting we're we'll from We're the we're which seeing side, to stability that continue price there. inflationary motorized So match with on that on annualizing right, of elevated the still continue towable the more earlier the more lot activity side Fred, some and that did to costs,

I how forward. pricing as about would go that's so And we think

There's mixed as in things always ASP course, as on the is. there of well, going

higher-end the results, brands in of terms there more In the units success. the that in premium Design, the or within example, having the higher for Grand we're volume seeing

of pricing equation. So on that minimal what you'll continue, but activity have cost on be side will itself the mix the based impacts seeing we're the some pretty should

a Thanks lot. Understood.

Thank you.

question Jordan next from Our Bret Jefferies. with comes

may proceed. You

on Good guys. for is This questions. Hey. our Buckley morning, Jordan. Bret Patrick taking Thanks for

Yes, good morning.

to new pre-pandemic Given the environment, levels? to should we optimal lower a compared level rate to interest expect change see a dealer current elevated of inventory

I inventory of can. in optimize dealers dealers and think higher of the good inventory the the answer well, think a that's I model the be I And are to are inventory as also as we mix here which why on of very serious sense inventory that's their But to seeing quickly And still question addressing I to is you're question they think is carrying that certainly, Well, reasons think right as dealers certainly infers as right retail well. that and proactive their that them. of what level the with primarily available levels them on year whatever trying having cost acknowledge. to are lots 'XX one focused your

levels. historical or exceed a return But it's good dealers if thing turn

saw I capital. OEM, working healthier think time to thing. we saw as gross financially turn an go in And lower levels, we higher XXXX terms dealers dealers period, of we early good that's think extremely a margins and when - 'XX late become the XXXX through

us from a And to But through probably would our point. and even inventory partner levels. a be to be turns operations good return dealers OEM period the we are higher the Obviously, welcome working levels so to that We transition and reduce that dealers. to we have supportive processes in higher their allow that order where of get there would feel supplier with production dealers, at as dealers. overall forecasted, would we've to transitional

know challenge exact question anticipate timing. yes. we answer your is the I is to the So The don't

pretty We environment? could talk pricing And I on Thank Got the It you. bit it. current That's you like more a then on saw maybe motorized. little guess, a helpful. sounds more ASPs the bit this healthy given expect Or in a moderation shortage? like increase should sounds that be little chassis It there quarter. sustainable guys you year-over-year to some more expect we forward? moving specifically

motorized speak motorized but meaningful has not customer, there ASP that say probably be would to inflation when environment a The break enough I standpoint for end newest businesses, movement there on that while order an it is would on affects you the year the retail have on especially say been in stable generally product. from year-over-year that in our customers. we side, environment yet model each the a very deflationary reaches I cost down pricing, about of by to

in little we environments of to healthy rest We helpful trends seeing to winding fact, believe But back and look is cost business. product are in and more categories, bit what are continue some think in we'll the some stable of for even seeing cost do our the a some that business, we very right. on each potentially And evaluate deflationary us are pricing they category, each at future.

Thanks, me. That's it. Got guys. from all

Thank you.

Whiston question Our next from comes with Morningstar. David

You may proceed.

SG&A. need there, cut Thanks, much I more you good you morning. on first should any, guess if How can to?

have is number want or And want Well, on muscle of of SG&A our managed into of intentional Good year-to-date. Most and that the businesses the our you start within costs. is you really units cutting a with combination we cut the bone. SG&A feel and depends is simply we types business morning, different David. very This intentionally. that themselves managing Mike. SG&A a been brands to answer And whether the appropriate to and of very

However, if the even marketplace continues to or be that we're softer would than we forecasting. like

have well. we though disciplined. expenses want don't prudent to important certainly look things we to stay We to create strategically very that potentially to want the structure very we at we are excessive some future several But overhead continue as well. that can need and invest or further that further would bureaucracy. to as our are and in evaluate of have There carefully will All on cuts to make of here to us

able So have the think to your just a answer down. do level net dial of your this trade-off terms you'll through here we what to live to we're strategic you need at turn is in and continue writing down while be It's to to investments, SG&A question cycle. spending the your structure

I the for little momentum a space, a that. And that been since RV your on is it of the unveiling. X more or it's you on accelerating I'm expectations for see year curious your how relative you year, up picking over EV, Thank given vehicle have a initial consumer just And see a think, the do ago Okay. is the interest ago? than you thought EV side? within you maybe year would light did, it maybe to

introduced that, ago. we as feedback such how the Yes. stakeholders January of used have January on around trust, eRVX, that Thanks of mileage by give batteries XX of the are introduced there. to metrics the a travel version real-world the reaction operates. saw of to and XXXX, great are different question XX as was today we the we the duration months market capabilities We the to the in XX off EV. for that the currently range us terms to product grid Certainly, using now and they vehicle, being probably vehicles In it In XXXX, we that which in concept about eRVX. of prototype

of that so internal continued vehicle. get continue we to progress and with that launch possible towards And manufacturing to engineering along development feedback. And work a

that that what the using team eRVX on to marketing lot Winnebago been the but is also both in very strong, as a measure capture can we ways of interest we interest. our interest characterize Consumer capture would has brand and that digitally in

So mile - believe the last in of we technology consumer going yes, consider that vehicle the help electric adoption to but only passenger technology credible. in is cars that the that RV delivery

an market electric when introducing not focus ultimately degraded. consumer enhanced is to the Our is and that the experience someday van RV

that associated and Winnebago that standard so provide can to will And we RV when that on is we we an reputation consumer with come the meets our a feel experience electric brand. market

being focus. So we in it's what best first. It's and about ultimately been to that's of feel our we bring good the about market, being not progress, and about terms our

trouble. and And cynical going come and your you at it's is agree that that one a just I I that. to probably guys you off, to investor well, Mike say you that, has. high line be with But it was down, don't going Winnebago's for backlog to sentiment? top what's following of burned right Thank lot but did say, backlog Okay. it A final now mean once reaction is in just think more. which look could really your

backlog. into the release it's almost inventory that name orders has run either across a February. business or excessively time, for Well, business. can ultimately, unit we're they the We've where vocal earnings we production want is right we of process even David, place the customer planning businesses their that a a will line not you think And high that end pushing Certainly, the on really a every to aware, the see name. when in a acutely as of numbers operate do And at of the the dealers percentage confidence market. we intentional been very our and dealer have the

That a line under continue couple in in some statements most of be comment And line in that of healthy the worry as to is a this quarter-to-quarter. its and the to morning will allows. pressure next make one our in way will revenue continue have the consistency market that I we stability month-to-month, did the prepared terms I the optimize to about quarters.

the your profitability of of most control even the question the business. is can to we SG&A back time, What

We order little business. healthy bit profitable, a are maintain to at willing a in give of market to share up times

every going retail it if not we're for half, so in cut our And every have last or we profitability last to unit unit wholesale means example. chase to

between And balance the top so bottom is and line. the it line a

results. very But pleased with we're our QX

profitability control, of continue pleased the in QX conditions. be especially that to and And of most is and what business we're more the will the present. stating as the focus depending business think been out think I is of demonstrate little top that's we've line we'll QX our structurally market profitability to bit a on on the I

information term in in add included very is financials, in Mike us one lot what is which David, our interest We a healthy line. on which lifestyle, to our healthy online thing the is deck and a I'll this supplement supplemental a to long some confidence outdoor posted to the very supplement gives is consumer that top thinking. that of the

of and number terms And number RV camping, to participating or eager you'll I think get of that households in in of as an RV lifestyle. households the outdoors useful the into well are the are buy that find the information, that

of at information, So I the top to feel industry in continue so the our as stability go it face you volatility But long well think some the is more focus a is that long we good in come. the line. to and but that even it's all near-term term, into to to look I indicator state encourage obviously, I We're won't of about because also good the term. going

for the color. Thanks Appreciate Okay. it.

you. Thank

with James. Our next Joe Altobello comes Raymond from question

may You proceed.

morning. Good guys. Hey, Thanks.

mentioned that earlier, on of dealer inventory turns about you Mike, it Xyris X.X I in But at? last that asked neighborhood to you the question go want dealers go to still out again. [ph] to turn back I First expect shake call, this kind of so there the question, X to I'll sort And levels. you is something

probably Yes. products you by to levels their consolidated about dealers that referenced number. desire down motorized We you on is products. there'll their know, one believe be a towables our The businesses. number higher of there. as will that asked ultimately, Joe, turn have just or broken versus each that And

change. won't So that historically

retail increased level that, can sales have But in the dealers will be market the retail that certain the I mean in And by get confidence stability a that XXXX. we of if range. at some

consolidated pre-pandemic. level to will they a at levels bit turn little their think I they at work that net set were then than what higher

So X.X think, them. be X I range, for would to a good

the higher say You comfortable to other shoot be lower more that And something on will for aggressive are some with a for. side dealers range see dealers even will think turns. I not they'd some But of the will and maybe that's that bad dealers find like you that.

business we them to to end whatever settle to they that need serve If at set ultimately obviously We that X, in. react they level X, at turn compete or they to settling up have our X.X to. level whatever to turn up

but would higher better. - So be

think financial And a at Winnebago our be be I good surprised say an some for that. that would would advantaged that in thing. dealers I rates health higher Industries And OEM fill think But to would turn would levels high end. be

just historically think declined have of Got it. towables, sequentially terms in And shipments your from QX. I QX to

are Turns we actually sequential quarter, saw now increase. a X. [ph] below This

retail So are in you the about over doesn't shipping concerned if quarter, materialize you maybe particularly like it think will?

quarter? Yes, the ship or in that over future QX in that concerned could we question ship over whether did a we we're

to a turns? given Yes, a more just so from see X now seasonal perspective increase it's in unusual sequential shipments that below in you're and QX,

had there. in is we the Yes. business dealers our from units in that business way. did feel the to here, clarification fair Thanks, Again, that our in produced significant for jeopardizes us don't had be X to that into Joe, weeks think that they ordered any I QX, anything we hindsight businesses, canceled. the QX subsequently

in the on will that smart up when to that we so work end way And and a happens our inventory in with lots, we open intentional and place careful, field.

significantly if a better retailing on manufacturer's lot chance on it's it's of a A dealer lot. than unit a has when

end certainly - think a we going saw the retract to deal stated and you of seeing if inventory up the our what destocking. in QX, inventory that some the up I year, that end like we you'll that of inventory. part QX, had be into QX morning, of 'XX and seeing to with call units the probably I open us you'll fiscal In so is some think neighborhood in in XX this QX XX And of field will

over in need X our next some see destocking fiscal the quarters. will we probably well, so as And businesses to

fiscal we to now And to over your QX year QX so this on focused point, of I'm and that, don't ship. really make sure

and we right are long-term are that levels dealer We partners channel that in inventory market healthy the with set in and the our great interest. our help

line and why I that to stated come. is line more volatility could quarters that, probably the that's the in that revenue So - have

could, side changes the you're sound doesn't in Just last I one second any major standpoint like one, expecting the if margin either? that a point. It from on last on half towable

We discipline. being our is stated business, with previously, feel run good that as we

provide deliver believe business. segments repeatedly, similar stated of quarters And in don't quarter financial clearly that EBITDA adjusted to we yield. that each formal established we've we in while expectation guidance what you a very so this And forecast, certainly saw the or floor times future we've double-digit can our our new is at business

we'll can we future see if And quarters. that maintain in

paying happen, of stability the a is in could But Some think not to good overall that we especially we never swings business our make. say what to but business fair believe leaders of on marketplace. very that profitability to are structurally is place and managing our see close not the that will well depend the wild surprised attention profitability-wise, us. in And to

Got Thank guys. it. you,

Thanks, Joe.

Thank you.

Our question James comes with from Citi. Hardiman next

may You proceed.

the is February that to does quarter. Is taking Maybe I bad I why And a second Is that's talk my a that vein but why it in what have for asking seem wanted you a a of you greater to shipments. a good thing But data, think had think We happened was the do bad guess it Thanks like have call. thing share - a that question share morning. or in you the about shipments first, good right? may there. or a thing? good of bit QX? case? do similar of don't Joe little Hey,

less think And year the seeing I big ton us a Should parse to as will the industry? this how daylight on little bit bit year, think maybe broader you I a then don't one the decline there's than your players Help that. out it smaller your full and guidance, I as of the rest relative calendar makes of guess, a of between read peer association. difference about of trickier the little but little which you're the a the industry think this I the bit retail assumption. shipments industry as

James, share most I'm businesses do through your obsess business. the shipment do believe, We share we've our years past degree the years. fashion, attention as a about our that end has pay the share the last the sure it health shipment to Yes, in supports Q&As X the or our ultimate certainly of business share judge the that retail we it's rise fair shipment obviously, day, in risen on jury ambitions. stated and we not retail retail question. share. And very At a And to in do, is coordinated that of with X the and close

different constraints. different one sure would from supply say or OEM the the into than quarter-to-quarter, I down points, up business. not to vary that. we mix, anywhere historically chain a different from XXX shipment in our read with peers I'm much RV share basis XX And have We're can

Some headwinds us vice and better worse affect competitors things that versa. our or are than

steady we I the I range. So if, you range, a relatively think, do X not a And us thing the don't forward. decline we shipment overarching in an fact, our ship listen, in improves, to quarters bit because or as that would quarter generally little anticipate to increase allows shipment shipped. pretty chain share, tell our objective. period, thought of was we took was share to in And in just that right stayed going supply It's in future happened it in stay I comfortably. dramatic It a what that

expanding Pontoon a would that specific So a product would that of the share-taking continue we possibilities. timing-wise in brand shipment say to That Aluminum Barletta, be where we I business side, we businesses where on rationalize brand expansion that market that line has and is share market like ahead could young, will fast-growing have grow be business. retail its share as

sure shipment But make even cooled, pontoon share there, completely whack. not the retail has we share of and to market are as that out have

it thought driven we share shipment responsible, significance. any and ambitions is really by wasn't answer of net the QX guess was I So

brands other to to up we a I'll this - the full the historically the pandemic the Mike's thing, to a add about it, James, capacity that to brands We've one just X briefly of lack marketplace. the thing I'll Tier Bryan, by reminder, some other of What and call is for, saw okay. talked in as just of shipments is to Tier peak their One make but add Tier through this, comments. that, X meet X accelerate the sufficient demand sorry,

on been Tier dealer X, the some And X dealers start brands about portfolio, Tier so of course. we've back ease ones talking the of those how the to self-select top brands, will losses in to including our

seeing for what you're so And preference quarter. a to been bit the brands. seeing the of perhaps that return time. dealers Perhaps it's those talking X and a although QX, for Tier by some we've that you're is about in some what just of And brands

as So impact reminder just that well. a on

a X,XXX it's I it's maybe the on gap, year will on right, you drawdown but XX,XXX I a the X% clarify guide, inventory the - to bit guess, in units. Do mean, more, difference huge more what a terms I little to between not little you're of conservative you and bullish mean you difference, just or the bit retail so is full you And think think RVIA do be? you're a think

more as it. that happens it as But of little moderate. or deal than our If tried forecasted. a other some skeptical would I a will latter. little bit the bit be say we've some James, can I would stakeholders inventory business think the dramatic I'm to be our has more be peers it obviously, probably drawdown with

point will of will other the turn dealers inventory are and be mean XX,XXX there taken go, of to sort taken appetite are some destock. be there level, time my okay, point out then I market, ready XX,XXX stabilize XX,XXX are units compete that the to and level to while would and a out an continue the my I'm dealers have taken of competitive. market where are at market units of out Dealers in units

sort because much in the of so X channel as X people is And coordination it i.e., short next skeptical forecasting dealer in that of are lowering, how as sort time, here to fragmented the inventory a that can of period of be months. I'm

For sure. Yes.

more for me. One all we're think skeptical. I

majority elevated kind get lower for You you're that being significant times talked a orders about Is year sort on mean, significant of going how open guys? the of - sold margins been QX? Or is couple think Presumably, do through? canceled that is I more half dealer of that? into the heading much we inventory. the product. of of in finished to Is just you by back about there that it QX, is goods or How that of

the to that of think our pleased, through I open especially what profitability or business performance we're relative and we meaningful inventory, is James, you amount towables QX margins in saw the report that were move a this still our in to able produce morning. with

in our there while quarters. so And will most next two be that likely still of fiscal some

we in our negotiating best will we've by as to we demonstrated think dealers adjusting schedules. production to that to their those as Our lots is disciplined low lots. our I stay make responsibility as And from that possible move can with

environment listen, a is of terms noisy It's terms noisy prudent very, with a retail. environment in very of dealer ordering. right now around behavior. so uncertainty very this in And ordering what They're they're very

amount pretty have effectively least managed inventory all open parties, is certainly through we of that the our so QX. And for but that of best any in businesses can

we so lots. discounting giant what's And hand our with on enter QX a our challenge don't again, on with

work teams every day. it Our

Bryan. Mike. Thanks, sense. Makes Thanks,

Thank you.

Griffin Davidson. Our next with question D.A. comes Bryan from

proceed. may You

terms to of trough is overall it Bryan This commentary today. hit and Griffin for earnings question as like on kind of Brandon. in what relates you've the Do think 'XX? my fiscal guys. first you I guess results is margins and Thanks,

We to that that the question. headed. respond in because curve we retail what know that inflation would the for happen what won't market stability, is will question chain will supply market in the where Thanks or assume of exactly of terms the terms to happen really stability with

a saw that we finished, a a down writing of you're the quarter that but And future do comment high I are guidance. not think won't quarters or on cycle. being consequently, whether you through always offer the So better you're at traveling than you certain probability numbers cycle, just whether the hope you I forward-looking the place in

long-term think many standpoint hopefully can taking been the are a run each that comes the liquidity raising a that's that term, with and a business financial think we though manage in that really can we than happening. from standpoint but working we and just was take of vocal We quarter people on the be in we perspective, years And through - healthier good very it ride floor most we've business cycles and for to the demonstrating short well be. been business we'll so we as and each have a quarter I profitability balance our two step sheet yield improving

Yes.

That's the here. Okay. are any quick [ph] And slower the back-end Grand offering front-end there given on digging second concern giving is Kind guess dealers discounting one discounting is dealers? chain help much you fair. I how dealer you're Design of financial into the

discounting talking the don't levels chain. individually, reasons we forms competitive not happened by that we our brand discounting of for and businesses the Again, value nor different primarily Yes. share in share about do

Grand consumers. in team product and vibrant Grand its to main with retail. product dealers the popular keep and the and fresh Design And place product continues the the turning line Grand hard pricing a business, a well-run right our that very very So to and at so that's dealers be is relationships brand Design successful can Design between working competitive be

- think Grand how in again, towables margin Winnebago this they're business. saw but team well quarter towable the in you So team terms of stability the Design on our reflect and managing I should that

Thanks, me. from That's great. Okay, guys. all

conference. concludes of call the portion like turn host. the I'd our you. today's to This back Q&A Thank to over

second is earnings to That of end the you. Enjoy Thank everyone rest day. our your quarter the of you call. joining. for Thank

Thank for you you. This concludes participating. today's conference Thank call.

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