Winnebago Industries (WGO) 21 Jun 232023 Q3 Earnings call transcript

Good day, and thank you for standing by. Welcome to the Winnebago Industries Third Quarter Fiscal Year 2023 Earnings 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] 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 Good joining third thank and earnings discuss today quarter morning, XXXX our you results. fiscal everyone, us for

by on Executive and Bryan Senior today and Chief and Happe, Vice President I am President call Financial Michael joined Hughes, the Chief Officer; Officer.

The live call news investor.wgo.net, and website of the will This quarter available issued at later with results call this a and our release website today. is our third posted on our being website our be broadcast morning. on was replay earlier to

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

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

Thanks, your always, Ray. Good Industries. thanks morning. And for in interest as Winnebago to everyone

detail. pass more provide an in to call the Bryan then quarter third financial Hughes and results will I cover results overview of XXXX our earnings to our fiscal

the Following portion Bryan's comments, I call. offer thoughts return will Q&A closing and of the some before

marine continues portfolio, be diversification while we And our in within financial has segment robust RVs also bolstering tremendous demand categories challenging new results. period our to network, including subdued year-ago we of comparisons of and slowed, more same for dynamics quarter, in to and growth. reflect a valuable experienced business the many results quarter demand dealer this provide RV second making a the cautious for third compete the in Industries' Winnebago products for consolidated consumer macro

I working proud rest are our anticipate and determination for their Industries to golden during and these Winnebago through am work, quality, quarter, the very extremely navigate trends for the and innovation to of our and threads of service. reinforce hard members passion and hard We year, fiscal of continuing team

fiscal our $XXX.X gross adjusted margin revenues, for third $X.XX. quarter, Overall, in of earnings net achieved XX.X% million diluted we of share consolidated per and

of are from they down While premium portfolio remain continue historic care and of diversified business focus our and and results customers period, Winnebago dual recreation have levels outdoor operating our Industries strength teammates our of above with the year-ago our the to incredible demonstrate the taking discipline. pre-pandemic evolving the brands and of

Consistent resilient RV in were profitability top-line model conditions financial businesses. dynamic segments growth Towable ongoing declines market offset in by overall dollar our results as consolidated and Marine RVs of despite results were performance our robust shareholders. the illustrates in business power continued diversified value and for Our our our in

brand. bright consumers, continue spot to targets well and general While in this share is the revenue while market. a portfolio, positioned about growth particular, in brands sturdy impressive pontoon immune industry Barletta, the within our and exceeding market in impacting in macro pressures the dealers marine be remained remains aluminum to our delivering excited not gains

our brands, than aging sense, less will Both anticipate acquired sign these on see COVID most inventory our fronts. and other a they brands dilutive trends brands interim XXXX also working an field competitive of had discipline. market as We especially continue share, our In down effect dynamic premium model market year considering conditions. to effectively market frenzy. the peak model and dealers manage are retail XXXX ongoing year RV XXXX transitional two have of retail RV consolidated we fiscal less pressure competitive share, We on have year inventory during a the lower-tier

for adjusting parts priced this are pay in of affordability meet continue competition More willingness and we cycle. both to navigate. and in priced our motorhomes composition consumers' structurally we Class factors support dealer trends the also at importantly, the are our or as model the needed promotional time lower products to consolidation monitoring also product retail are And B in in Increased lineups to active challenge. all will ability premium brands and the economic

our market are to very bode share industry-leading dealers for We shipment of in signs the and profitability. OEM brands well Recent also committed and future share, units in dollars, stable balance pursuing positive remain and our this intentional performance. careful leading both upticks are spring retail

right market These RV products, leadership brand RV pursuits to plans the extension, opportunity is and itself. in include, we channel years. plans and coming solid are brands experience share will other in have our elements, long-range customer the amongst continued pursue each inorganic cumulative new organic in premium investing established reach presents XX% and of this strategies, target goal actively evolving journey if Our the three digital

for to confident in are increased the effectively compete to We our come share. in ability years

investing proud remains core portfolio pillar of develop of still market in economic industry-leading have to businesses but We content the our to a the premium we of today, as of are are stand we strategy. products immensely family innovation clouds linger, and not the continuously

to ultra-high-end dealers Industry to space Industry to the award-winning Meridian-Lounge exciting Innovation offering launches more Award latest the the and exciting Boating their XXXX and combination an reasons Marine new the of offers of young, complemented pontoon and the showroom Meridian-Lounge brand. Ultra-Lounge winner this of the Award, the and increased Reserve A popular continues Products floorplans commit the line give Lusso Quad-Lounge models. and floorplan, Reserve by available are recent its Top Barletta's Aria entry-level on

as to back Turning with Enhanced B line, extended top. of an fresh pop chassis our RV Roam our the van open-concept the Winnebago brand part launched a Concept month side, just last and Open Accessibility design

its motorhome ride, the market, a XX-foot to motorhome the and own. to diesel love the XX-foot market they doing and luxury axel, is XXXX passive the of in horsepower on motorhome Newmar Class with continue this what There customers product tag all in handling Mountain no has other of a A smallest smaller Aire, luxury XX-foot the length, a class recently horsepower, a introduced a luxury in torque; allowing package, do a downsized XXX a Cummins engine model. and incredible

appropriate with on committed improvement Next, maintain with our balanced focus of the we remain dealer to to production a mix. planning excellence, continuous partners and our margin an thoughtful product performance and operational collaboration

EBITDA from We conditions. highly and structure challenging amid to variable double-digit also continued market managed benefit delivering spending, cost adjusted margin RV our SG&A

sourcing disciplined production planning to enterprise continue our strategic philosophy. and adhere capabilities also will We to on build our in

in the cycles. our to that business to We ability leveraging insights respond appropriately evolving operations strong are quickly our dedicated consumer sustain to inform profitability market our and latest financial conditions and to to and industry liquidity economic allow ways enhance through and

consumer immersive capabilities our Marine our off-the-grid diverse our quarter, vertical the and accelerates RV vehicle the and company outdoor battery Lithionics creating strategic on announced addition of lithium-ion for provider acquisition overall a fully to is past opportunities capitalize in to also ecosystem, successfully innovation house and Lithionics electrical on preferences more markets, solutions products recreational advances closed of This technology Battery. and this specialty supply experiences. we for battery solutions and

Industries. begun into business platform have We integrating Lithionics the and unique their of already Winnebago electrical capabilities

partnership promote Minnesota. Industries' goal throughout and conservation recently initiative on environmental side, and headquarter protect with state we on Winnebago trees The a to Nature water to includes previously a of that The Conservancy the centers forested outdoors. reforestation partnered aims and the On land impact plant acres

the dealers of RVs rest the fiscal anticipate consumer behavior for continue conditions ahead from to market as softened demand persist. for Looking year, ordering cautious we and

our we changing agility our conditions. to However, relationships respond to dealer and market on will preserving supplier our and leveraging focus profitability customer by maintain care internal and

is of those recognize our Despite it trends, innovative continues increasingly premium lifestyle outdoor diverse longer-term resonate important portfolio current consumers. as conditions, populations market to with product to

continue outdoor rise improve confident flights, rising of rentals. as Americans to outdoors combat the lodging look We increasingly and are the to and costs to trips to will and well-being car road mental participation

activity they will reduce XXXX up increase annual outdoor of For in Spotlight XX% Survey, Winnebago results. Industries' stress, respondents example, third to said from

Additionally, climate, the than travel. more rental respondents their RV use for Kampgrounds of of that of modes XX% shared is recently air affordable using camping economic flight, shows or instead RV Despite research XX% America research of to a other more considered feel campers of replacing our have uncertain travel, KOA's that And shows intend or trips, car. hotel an for of hotels RVers XX% travel. that

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

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

good everyone. morning, and Mike, Thanks,

results a significantly result demand, a the as Fiscal which of third lap year comparisons. quarter in performance record pandemic-driven impacted prior year-over-year our

prior favorable the than price revenues higher offset recorded to and the consolidated carryover RV sales XX.X% lower by the and were of during fiscal quarter were retail million to billion discounts allowances third Third unit driven market and $X.X XXXX, partially by conditions lower $XXX.X related increases. quarter compared year,

businesses from benefit diverse portfolio declines to consolidated across to The premium sales industry sales As in the top-line vehicle recreational mitigated Mike we of of meaningfully marine segments. our in segments our recreation produce multiple our RV result improved growth mentioned, relative as a continue brands the outdoor mix industry. to continues in

and million XXX the lower during to XXXX quarter gross driven points profit margin $XXX.X year. pre-pandemic prior above of were allowances by and of context, compared million deleverage recent remains third for and to margin decreased These XX.X% last Gross discounts quarter industry XXXX. levels. third profit the quarter year. was $XXX as XX.X% headwinds Gross than higher the declines basis in Despite versus profit

net and quarter $X.XX earnings $XX.X diluted income the $X.XX. $X.XX XX.X% earnings Third quarter to per XX.X%, diluted $XX.X Adjusted $X.XX year. same period down last compared respectively, prior-year in year-over-year income million to was and was compared period. decreased from the Reported million, operating XX.X% was per third share to

for $XX.X represents adjusted decrease which was in quarter. the million prior-year the $XXX.X XX.X% quarter, Consolidated from EBITDA a million of

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

EPS Our with adjustment results accounting this to been had pronouncement previously. following adjusted equivalent basis adjustment the new an doing be of we in adoption how

our To XX.X% driven primarily was segment Revenues by year. RV prior were market our performance segment. the up retail to for associated the put with for and $XXX.X cover allowances higher down unit by for to XX.X% the discounts XXXX. and revenues decline segment million XXXX. Towable performance of a now context, third Towable compared third conditions volume This the of quarter third are I'll to quarter compared into the fiscal quarter, RV quarter in compared

that ability to experienced the We pandemic Industries RV favorable secular the in lifestyle remain long-term work will remotely and virtual confident exposure growth to during the capabilities environment, propel coming provide that the many to tailwinds with Winnebago people combined the due years.

million, to was XX.X% Towable and prior result period, primarily experience. sales deleverage year-over-year, compared basis of solid discounts year, $XX.X declines allowances Adjusted as segment the from basis warranty down profitability offset segment was deleverage. partially XX of margin prior-year a sequentially, very Towable but by pressure XX%, as resiliency down favorable demonstrated and adjusted higher points points margin from and up a during XXX RV period EBITDA EBITDA

to focused from prior their the decreased on replenishing years were dealers down inventories. XX% $XXX Backlog million, when

year, by down segment. lower XX.X% Motorhome third $XXX.X costs. higher and We volume our allowances to prior-year price related This RV increases $XXX.X higher million was the from to period. million, offset discounts to quarter result compared prior revenues of delivered decline and recorded Turning the the during chassis unit of partially

we and prior of from Segment due recent adjusted X.X our of go-live some ERP but from us X primarily disruptions discounts quarter from XXXX productivity and EBITDA the was efficiency of of most experience point The implementation. year. X.X%, points margin the the cost end was and EBITDA higher did in down by phase EBITDA our approximately decrease basis resulting to quarter, some a to deleverage, allowances that to quarter. system of $XX.X go-live largely points related Adjusted was operational representing inefficiencies XX.X% million, challenges, inefficiencies third XXX stabilized the and on margin the

customer are at lost $XX $XX are recovered adequate also not support we end to next of an million wholesale three to over inventories We to quarters. believe sales shipments two by this disruption the the the the sales were in estimated But million do dealer retail foregone quarter. impacted to moment, as since these be expected

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

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

price broader carryover remain continues outperform demand turn continued Revenues our which RV to the the and of some pontoon decline recorded share encouraged slight performance from our a the of unit partially We softness increases, million, market $XXX to Barletta, Let's offset by segments. Marine were by to to segment, up period the mitigate which the prior-year during due in $XXX.X million category. volume. in slightly aluminum gain

our business from targets Recall included revenues of that our coming XX% mix goal sources. of non-RV long-term a

for revenue XX.X% year X% in of non-RV roughly approximately at our compared this overall last revenues fiscal XXXX. quarter, accounted time X.X% and This to

contribution every this necessarily don't of business. diversified remain expect we While revenue on moving non-RV it our the quarter to increasing our forward, demonstrates revenue streams at level impact

EBITDA primarily to due XX.X% and year, last Marine EBITDA XX.X%, basis higher discounts compared segment the lower, same adjusted was period was to $XX.X lower XXX and points adjusted than margin allowances last year. million,

higher backlogs makes XX.X% Dealer normalizing due levels primarily up total increase were delivered, Marine, of yet note a third Marine to quarter for includes up Please that year, not of compared inventories. XX.X%. typically which this dealer the the percentage Marine dealer to inventory, of units for segment. the inventory reported retail as is prior down

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

had third X.X quarter. quarter. $XX million capital the in outstanding by $XXX Moving reduced generated in representing $XXX.X At operating Industries And activities now in to from Working approximately end the approximately the times. balance the of Winnebago sheet. the debt, net million debt-to-EBITDA of a quarter, cash million was we ratio in

our a be Our by of capital and or recent and sheet our through balance in supports shareholders. delivering continues operations on to growth healthy drive business capacity, balanced value strategy, to evidenced as increase our returning us Battery capital allocation to improve to our Lithionics strength well as our investments for acquisition focused strategic as

During quarter, to sustainable the third outstanding in drive long-term roughly shares, profitable of and our ability $XX million underscoring our growth. repurchased worth we our confidence

a to our share dividend, We also of was per fourth fiscal XXXX. quarterly reminder, quarter XX% maintained during regular as which, increased $X.XX by the

to in I are touch how Finally, wanted on briefly results Lithionics reflected our financial statements.

April, we consolidated month closed of of the so acquisition As QX one does Mike a our included mentioned, Lithionics Lithionics significant at on and results. have therefore, results not have end our impact our financials, of we and in

network. products respective our dealer Industries products and As be Marine them RV sold profitability Lithionics is also to and Winnebago sales solutions in with Lithionics a Marine businesses, our are Lithionics' of supplier the on and sold through businesses to will installed as those RV reflected segments

from Corporate/All directly external financial the Other sold category. Battery Lithionics Additionally, to be will reflected customers are in results solutions that

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

Q&A And to a we Bryan. Thanks, few before now, get session. comments closing the

ahead, manage and Looking products. for will continue levels macro we production ongoing dynamic demand a our to through challenges outdoor actively environment

creation value We drive our disciplined management are can cost continue what our stakeholders. work to ongoing execution of we for long-term through controlling and we as enhancements, committed efficiency to all

calendar community forecast the every RV wholesale stand Association's about is supports see Regarding quarter Association's the remainder as questions the Industries Winnebago receive at industry's Industry we comment year year 'XX RV calendar we from of withhold out. shipment this estimate retail we the range year play to And investment the on here where period. XXXX forecast, for wait calendar the and today. shipment RV XXXX time future we Industry will recent

us we the this appropriate that industry are retail at as units to estimated for aligned stakeholder around seeing year, side On feels RVs, this XXXX, XXX,XXX currently well and calendar in multiple retail for generally views time. calendar

final a sheet, and inventory strong strategies having multiple XXXX entering of investments position. are of and improved support inorganic growth sequentially quarter in with fourth working a capital and fiscal and We balance future our organic completed

and We competitiveness market channel focus with for are closely our our a position on preferred partners. to lot conditions market tracking adjusting a premium brands profitability, and with

regular repurchase underscores strength business. Our our activity of confidence share our in and ongoing dividend long-term quarterly the

also the are head we portfolio sets rest, of people final positioning health stretch overall apart what Our Winnebago of from the Industries the into excited us success. driving and for the results long-term our XXXX. am fiscal as about I

We continue building delivers customers the remain lifestyle and we are term. that outdoor for value premium our and all to in long deliver our confident shareholders company in resolute stakeholders, for a ability to to

concludes call line to back I this will questions. our over operator, to morning. the who prepared That your now remarks the for turn open will the

from And first Please Instructions] Craig Baird. [Operator line Kennison you. question Thank of the our comes with go ahead.

wanted taking destocking RV Thank for And morning. model your your questions. view? XXXX? good much industry what you is RV in dealer guess Hey, percentage I to still needed with RV How my more inventory. is start I year inventory of

going This Craig. of start the question. morning, is two-part Good to I'm with latter Mike. your part

You you XXXX. year assuming mean XXXX. I'm may model stated model year

Yes.

we is most That about. -- inventory okay. That often get aging is the that asked

quite XXXX, range the aggregate year at RV somewhere at believe inventory. we're than is year which On of the we're we that we in lower currently current model considerably field XX% probably inventory all actually our average XX% about good industry brands, time. were total to the XXXX is model this side, RV with we to where three If field think feel of I

inventory on emphasis the some model those shipments So the a reasons, trying couple bit other seeing of months. XXXX the competitive candidly, probably in of here one year we're next put before clear XXXX begin more to brands' that in little is out dealers

feel we again, good. So

where of phase, terms midpoint morning, XXX,XXX about the you at retail RVIA we're of in which units. number XX,XXX the being calendar our of in 'XX noticed comments obviously support show XXXX, calendar support referenced with referenced in this In of XXX,XXX for that destocking units if destocked. would roughly we we mathematically in shipment And units

We believe the are industry phase RV today beginning. the certainly we're destocking than in to closer to the of end we the

hope calendar calendar and our late in the begin total, turn be dealer And so, 'XX end we XXXX will of the in probably quantity calendar the this sometime is fall shape inventory good the we year. as into as year, mix, page in that by

sure And on you I'll -- same have Thank then looks I'm I'll units. dealers. the category. I'm accounts like mentioned Marine could there's Maybe ask are dealer expand retail added not you. you significantly what just that. restocking, sold something and question counted sure really retail been inventory. wondering on some as It the units increase? to I'm about that that some you've for added still you

in increase ways. there's Absolutely. of continue Marine is here. And field unit young, in The is two business factors to is the expand couple a pontoon to segment business the majority still the and Barletta Barletta One distinct inventory of that business. pontoon play we due the at

First in product. of all,

those Barletta of We ago. have now recently the introduced is the two Aria, Reserve, a load high on year catalog versus seen either volume-driven offering, the a end new have of and two brands brands products year-to-date the pontoon in to menu. the very shipments inventory of stocking Both lower-priced those in no Barletta more which

halted dealers dealers. fair expansion geographic our the the not and Secondly, was we Barletta chain flow it a of continue existing brand In within challenges of any think We virtually standpoint. brand, the restricted of with serve shipping new open business. normal XXXX, because did Barletta markets from we existing well of markets dealer year, couldn't this expand to supply to to new shipments that to we as stocking a Barletta those begun our Barletta some up set we well. have inventory begun the supply and up XXXX In have dealers we if dealers to XXXX

for inventory end in quarter. Bryan this, the not field unit of today but comments, retail delivered Barletta the roughly mention our his I'll has I believe, mentioned and as units number see units brand thing third last The of Barletta XXX you with the in of sold inventory,

even we being materials in so subtracted position And in our of today. the feel better field light number inventory you inventory units see those field from about that

we particularly to Yes, you're delivered add just bit, The way. insight true a seasonality business giving that sold report. calculation May. so we're of thinking the will every turns Craig, a to always about chunk not of yet of the that primarily little Marine May the have right It's retail each

year. turns And to to so was last sequentially on this an going though, calculation. year, true have true impact February May, that from that it's it's Sequentially

So, additional into wanted that that make we to consideration just taking insight, but turns, we you're calculating provided sure as appropriately. you're

you. Great. Thank

ahead. the for our And comes Please moment next One with Tristan it Capital please. from question, BMO Thomas-Martin line of go Markets.

Good morning.

morning. Good

Good morning.

over quarter? trend in And far retail seeing you did are June? then, How the so what

slightly Tristan, in from RV good saw will won't April. offer to were for This retail speak we I bit is Mike. the We improved, our QX. the June time. a at similar May results retail in flow a this standpoint, to business morning. what of but into insight But much May

was What in last had the of last of retail month saw of of May, of was one notable previous much better May. we the weeks we week May in weeks seen a than week the RV the

green looking end May. for of that stronger cumulatively, little not, we of of was comparisons, a year-over-year bit at improved May April bit you're versus So, a But slightly if similar, if results. shoots little the saw RV

as would pontoon did year-over-year a On in we retail particularly in we further the generally of we month May a April. liked from increase still Marine did have the do, we May. a seasonal as side, in but saw standpoint degradation did we not of pontoon retail the side as than percentage We on hold see much see comp

helps, So hope Tristan. that

you fiscal question. looking 'XX? premium of affordability longer-term given premium enter and philosophical year brand kind Okay. you. a at How and then, And kind ASPs your as Thank your kind portfolio of of are we

premium Obviously, brands. we are as a stated, portfolio of you

we our end products gap And to to lower-priced price products our premium and customers and are the so, constantly really business in model, dealers market. justifying of brands the between that as part

brand there's to gap. a product difference step-up is And competitive, still less so healthy between as tension premium on managing or our And are what that businesses today premium always that offering. us and razor-focused

the terms in price leader are the industries, movement. that in not of respective of size we Because tend be we our to always

to we in therefore, activity our do so retail pricing brand. with traditionally best or monitor pricing comfortable are through street and competitive And activity, price dealers ways that accordingly adjust aligned the each

have a Some our on little more bit more honed away of brands we some support portfolio and of to practice from that have or in our and retail to dealer. invoice discounting support, the shy or tend brands pricing focus

industries So watching RV of and concerns the both of are the questioned financing, affordability that given the and we're our that of cost many so managing in businesses various ways. that the retail rising price have goods the carefully around with and lifestyle marine

And Towable little can our You went up. some least a believe see within per quarter segment, at of I the that, was in segments, this ASPs ASP in our the some past. RV lower cases, our in recent actually than results in the unit

one our top are to So trying that's certainly topic and businesses dynamic a stay of. on that

add just that, I'll Tristan. thing more one to

in production create problem the a to more need goods you less can are, capacity or you own and appreciate, you challenge yourselves for are disciplined forward-looking that and finished move or in the products. utilization As the you your your of

that we the that's also us a forward do it our discounting the well, good view, So, schedule. great having necessary others and also pricing believe. But And build show as disciplined we us relative does to very up take approach helps in to in for a to perhaps. pride

Got it. Thank you.

please comes question, with And Scott the of it ahead. our Capital Stember for MKM. ROTH Scott, moment One next line please. from go

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

Good morning, Scott.

good morning, Yes, Scott.

the In benefited the into carryover to purge of you're 'XX margins over with flow of pricing. talk up? particularly, how I expecting we should Can that coming about guess, ahead QX, your about expect how the final and talked you release, 'XX discounting if you any on guys 'XX models from some

inflationary morning. the year-over-year good can a is at I'll two take Scott, that This seeing from We're stab if pressures Yes, and Bryan. perspective. segments pile initial still on needed. on Mike

are and likewise, segment that inflation. that Marine And carryover both segment inflation. that the Motorized pricing, year-over-year the then, So, largely seeing offsets

Towable deflation, are -- some the and so to that year-over-year inflation declines if year-over-year we're actual we reflect On side, the you starting see year-over-year will. of or pricing as seeing will well

On pretty a sequential neutral. basis, it's become

sequentially is as actually flat Marine. environment well cost sequentially. for stability Motorhome side both on some and We're seeing Towable the the now So,

So I forward for think pretty QX. pricing or mimics us going year-over-year likewise you we what is that can that expect follows neutral that, that expect equation from such and that inflation net is

what And standpoint second out. to purposes, you fourth All guide, a some right right. I us being going little July, very shipping of a a conditions dynamic And June production in just and expect quarter? lots for reports on starting to lot know XXXXs of modeling of is, them don't obviously, that guys give make but and when But we out? down part be from the you just and market have now time of taken you get just help 'XXs on produce sure maybe will to the

in Scott. made are down And morning, production is on will share We Good see brand-by-brand generally do saw fiscal fiscal a year however, more QX likely, might expect, downtime decisions, those is you Mike. weeks information specifically. 'XX. that we basis. 'XX of not It than QX This of as

of we And businesses to we our the businesses We in XXXX our in as model shipping is XXXX as wanted products dealer QX remaining we across year if of product year year try particularly we continue all XXXX move RV XXXX we rid that much to product see remaining the highly worked it could. start it's June. that very would to shipping as on here XXXX month product, in get product because But model model start prematurely. there XXXX some model many pricing before pushback is us too important of likely our of move, we year diligently to to internal

due to resistant we and XXXX top-line in but market. pressure will both happening course with yet. make desire have line product the currently, more their mentality in the already over those our of their the see In to QX. of But obviously that yet imagine the That's the product that product begun "aged dealers destocking year fact businesses, any do will before product". year several that much protect further that We hits their in to not but some margins to have are businesses here started model product, model take XXXX be not XXXX model most QX also taking on ship we year of

again, anticipate in top-line QX half transition, of period. due the we So to that our some see could pressure QX first especially

Yes, I alluded add other is year retail, Mike build in in behind and that were inventory seeing think I that, business detail Scott, is QX. in pretty we slowdown the in only in as segment, to, heavy the the Marine particular, last mode would marine

those So the events. get comparisons result two as I tougher the think of of combination a

And last one could if I just sneak one in.

just Your any, orders? is backlog, have more that Or if does that 'XX much, 'XXs?

Scott. by depends business, It

future we the meeting Newmar was believe late orders essentially team Newmar pitched a took where in, it year XXXX I As model dealer product. had an on example, April, and

as that would in XXXX delivered likely orders the say timing, was I the under or ordered in backlog a first but guise six on which of those year. generally of a XXXX year -- be model product. months the the product to will Motorized XXXX probably an probably other is includes year QX example, model of Newmar the QX brands, some product, six unit as segment, So most XXXX Newmar the as the

supplied as as So, even 'XX, was it will likely, order if XXXX. the most be written of

again, Thanks, guys. Got it.

Thanks, Scott.

of with question, Wolfe line One Fred Wightman proceed. comes it Please from you. Thank please. next for the moment And Research. our

morning. help rationalize. you hoping guys, us I'm Hey, could good Mike, just

dealer consumer also of for strong softer you laid You of demand out the really sort forward. expectations here end May. and But going at the about cautious orders then some demand talked

So help thoughts? those of can sort rationalize you just two us

Good morning, Fred.

retail a that months. was as down depends of in that in comps that's yet travel going of that seen May wise Whether single on a stronger is week example, I summer promising continue of sign terms retail of through to last -- that think I an to saw is of good the selling trend it be June. in terms into referenced less as one the comp we we year-over-year, week sustained

shipment Marine for on the demand I the both dealers' top-line segments, in more also would appetite but RV is predicated say segment now inventory. the

their stages commented moving model and But Q&A, destocking continue the careful do we're limiting further the dealers 'XX in focused they 'XX RV here year on opening XXXX exposure I earlier very the I model product, later be model products will very side. year about of cycle As year believe in that with dealers, on being of especially then to take. the

Industries Winnebago excellent is in XXXX is model news good The shape on year product.

hope will inventory We we retail we calendar we to good cycle reordering some one-to-one again, or feel to And see year later are we to branded calendar be into in from more hopefully, clear to the and beginning move lots. some benefits XXXX that to of third tier transition shipment see begin a those especially begin to our as XXXX, second also some timing-wise, a of in dealers' into. position from

demand week as top-line can. in a some of the we'll to just we of can't monitor I retail but dynamics, So, it continue reconcile single best

what like Fair volume all and a margin sectors? between you trajectory the the enough. part sounds different down, step that took of was a segments? declines, looks it two basis different then, the two sort mean, RV through Motorized like just explains it but to exactly RV due And ERP I pretty Towables good issues. performance walk is the year-over-year the across can of the But on despite

this Fred, is one. Bryan. take Hey, that I'll

driver biggest side far. cost biggest segment. lever that the discounts, segment to variable the Motorized segments I But happens. well. higher cost with has the to going than and a factors, I'd I'd of a say the assume But the associated say is Towable that have deleverage the the That's impact. volume and than as think the the into. far we declines largest by but both side, you percentage in it volume the not on variable side that -- Motorized next structure the mentioned is That's deleverage of Motorized. higher and get Towables allowances by and the I'm virtue On Towable by several

experience had -- translates and quarter in to that from between warranty continue and the difference particular, their a in the Towables in is the in the their Towables and production Grand that had how good the that Motorized favorable Design focus results quality some then And costs, on costs you what warranty in term. see into long

segment in segment deliver helped we So in particular, why we had higher margins. for that called that's out. It experience that that QX that some there helped and Towables favorable

on is as side, implementation. have ERP And the you then we Motorized third phase. our mentioned, This did the

went years, for of caused implementation, several and quarter. that phase in and in couple the well. This verticals. vertical, prior our in third they stood particular, that disruption up us struggled some First ERP with of One were phases quite

So We out sitting through it a -- margin worst X think today. point X.X margin I we're of EBITDA largely degradation result that the to degradation implementation. points called here as here of of

though it should our so that for And call was we out something felt results. we quarterly

all dwarfs the relates The as Those differences. to percent. drivers the it are much other deleverage biggest margin pretty

Got it. you. Thank

One the And question, Securities. Swartz Please comes next it our moment of Michael with from for Truist line proceed. please.

Hey, guys. morning. Good

Just maybe Fred's maybe level. but comments, holistic a following on on at margins more up

this despite range Just gross we've last deleverage pretty the three the you comes the of price allowances consistently and now seen back. coming the And and in XX%s. of input obviously high quarters, aspects some margin volume that

is about XX% kind think out fiscal is, a knowing of for we level but floor guidance, to model to So XX%s give I don't as guess you high question and 'XX -- 'XX? my try

is Good Thanks Bryan. the question. Yes. morning, This for Mike.

Mike the margins, be continue we're to environment, the that headwind associated a retail longer QX, we particular, our QX, That's about we've just and near pressures levels, sustainability hate face in was the demonstrated to about to inventory over thinking I to term. from talking discounting. as for continue that from going as think and pricing overall comment going in environment I have to the the term. you're the of on

term long things us differentiate Lithionics on innovation, quality, should through we're the be to term, that, deliver near service, near think we the in the tough have pricing, that tailwinds. have, to such term, and on be and going declines pressures will upside over differentiated well between that a But of will the obviously, as had on long Now, as the through I the focus market product that term, we've sales kind the that the margins deleverage those in to maintain as that the headwinds historically. we

to the as in We mitigate disciplined So still efficiencies and hard subject schedules. yes, mentioned discipline in being there. very market at to the to production as overall very the think, we're that finding to the operational of our I well we're earlier, it, going some discounts continue But and work helps challenges allowances.

I So prevalent. be going to pretty headwinds think are

very us additional Bryan -- gross that term we reasonable thinking I a is, fall isn't you in structurally demand that, recall, some comments, road, and the see healthy end dissuades of communicate quickly. a long especially in that don't years from more us anything as target is environment. my we that last One XX%. Two goal a margins Mike, did terms from And may long-range for down

eight we've our see business. out meaningful in both and The to is in diversification and Winnebago versus Industries work But material investments consolidated benefits term. the floor last other those now the our driving around those Marine thing a again general from because short businesses benefit now through an seven done factors a our to business has based margin I continues Towables very or would volatility on standpoint, And that from that level, improved floor the still portfolio like years point could just certainly the of of at profitability the increasingly years. the definitely especially a pre-COVID Bryan referenced, been of

just the follow-up. for you Thank Okay. color. a Maybe

a you've call, but levels? that versus Obviously, us a in stands just give maybe and higher times little context of of kind context? the promotion a on this discounting that you little maybe Just number can of is discounting allowance referenced year-over-year, promotion where front pre-pandemic

we would I levels say good similar that in it to Mike, it's Yes, contact, that very a the characterize pre-pandemic. further did

levels where at elevated and here not 'XX. are were today we We in sitting XXXX versus

Okay. you. Great. Thank

next from Please Jordan proceed. One comes next moment Bret for question please. Jefferies. And our our question, with

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

Good morning, Patrick.

Hey, Pat.

a you little how guys And finished improved bit the talk Could to goods start peers? inventory? about to the trends generally year? more the Have current guys you there compare levels of

Patrick, is this Mike.

may se. expect, great inventory we levels As competitive visibility don't you per to have

these levels be versus believe that we our candidly, businesses reasons. similar at probably we competition, but have So, been for percentage-wise, destocking less may destocking

either than or believe our are gains, on are inventory the in we way, here, year rationale But Grand course the of competitors. the levels secondly, not cases, had field began aged growing last and side, as of particularly our we our of periods do past of potentially, time. our retail inordinately share shape. as any believe years, strong but or higher fact, in we that they biased shape for forward be inventory in business better in for we couple the RV a field over because some we market in inventories less Design may we And a of One, calendar form percent XXXX. had And

competitors there much very extreme are year second levels market, dealers tier higher the advantaged not term XXXX is the short brands Where the are remain current have model of our in in and or at we those third moving the time. if emphasizing inventory

was being XX and/or of off inventory those was brands most in particularly that XX the that gaining rationalized brands of lot little you here. SSI a of trailers, SSI at brands If not function believe the higher being in as and actually that recent travel look gained top RV brands It industry for through were in share, share of were retail eventually Towables XX we bit example, the an the some results. the a

Got it.

is This Pat. Hey, Bryan.

bit follow up to you about asking there. Just our finished Were lots? and little a our goods

Yes.

that approach, is inventory. directly or Mike our was And we a build-to-order is boat field Okay. generally is approach. a a a just chassis finished it start production I speaking, into addressing a the dealer order. tied Yes, reiterate in production, to when think because would goods That

a of out goods back has production finished in order. we that production a now has history that example. than year And slightly versus into you happened start situations more subsequently dealer may for Our because elevated recent the or ago, frequently where it unit a is right the that past versus have

the finished largely are industry they're up very a speaking. I'd comfortable to still relative So, slightly. position goods in our say

then, shifts has helpful. mentioned can you guess some competitive That's recently, landscape, remained from rational Thank landscape? it. you. generally what guys I Got And the competitive pricing into look you you on and as the see

side. the in industry RV the I the affordability to are pricing we would concerns, state has would particularly that considering But all on players rational. opportunities say been address

into are lineups. And are introduced entrance seeing so, models have that consumers ensure to you at trying that from product affordable OEMs times their new an various

with their OEMs lower had on cases, price some thus a did a build happen through few so Barletta business to off put we are presence maybe in extending haven't material functions, costs or the can taking decontenting a a to product bit in product, and pontoon before. points Aria like for or, cheaper the the in market, they removing unit lineups that some features able And being a price little that

with that continue our focus are reach use intentionally working some provide September. dealers think product of continue to at competition in more will that months you'll to brands And businesses forward those who Elkhart premium yes, also imagine to our see in House announcements you'll displays to I of consumers the on, be and Open can event I businesses some some would and sensitive. price that see in the Our but brands, still through as our that may evidence of plans. offering coming options the products our

for all us. That's Great. Thanks guys.

you. Thank

Please our David question, Whiston And Morningstar. please. with Thank it moment you. comes One for next with proceed.

Good morning. Thanks.

done, R&D with possibly significant to curious fill holes any have still deal via Just you're that Lithionics M&A? looking you do the tech

David. Mike. Good is This morning,

least of important minimization that new future. vertical further at technology future, RVs generators the boats was components in the we've the in Industries, the an in or for stated, a we Winnebago candidly, the a for area obviously Lithionics believe strategic being an that and, or recent power sense of gas form the is in diesel that As of in our was acquisition electrification history, it acquisition investment house like

are electrical have to and consumer rest ensure power. experiences great of the are we standpoint important as, house brands, offering on the electrified, assessing components, in products chain especially to become and our currently our which ecosystem access to future We differentiating from more products we that believe the advantaging us a again, supply

no investments an in it having of advantage is have electrical the we to for and model to the second future. sure. stronger ecosystem our But could just or here next could that be from create That so, vertical a source news further announce. And be or considering assess we third business protect decade of anything believe components going that and key a area in over forward in

difference consumer confidence noticed Chris-Craft -- between And have any the you Marine, and between any Barletta right major Okay. customers' difference the now?

They be that example, even involved are fact moments. they But the may consumers or to of by that Chris-Craft it's we've two But factors, paying And a often before, that are to retail markets. due high-end the customer in business has down-cycle also pressure tightening own particularly those freshwater the affluent, different customers exceptionally very volatility performance high pontoons, a Chris-Craft want in a the the it's in difficult some discretionary belt during number products their even be few general that in be their may make businesses terms of outdoor well. a have to whether personally customers as the well. for for And lead is investments of They that stated as part. as seen could even the There ability personally. majority purchases. cash, markets of of stock most time

times retail again, higher probably customer it financing The more it's have a in that is And folks segment, a Chris-Craft price-conscious financing higher-end ago. We was on a consumer families definitely more the the more but to to you of and pontoon pontoons. than see middle-income don't albeit Barletta year rate can. consumer, retail times the a X is business what spend X.X cost ability standpoint see a at

call. the said, the that earlier mentioned quite the Barletta we business still So, for resilient in being reasons is

Our on pontoons. market share has now risen to around aluminum X.X% in recent months

but current the is still it's on affordability in so still to conscious business that as And terms line time that factor in over be the a positive sense, a share against bit swimming with of very we have little a well.

extending about too say business this is Barletta right? market be relative doesn't guess to I customers again, everyone I stock expectations. worried mean, to to RVs, wealth, seem your well to the for, had Marine fair it relative that haven't continues Chris-Craft we probably mean, still doing just waiting given and you're quite happening. on recession to And the I the it's overperform keeps now just that, your not

some into see little the date. Well, do couple think it quarters travel least marine their industry probably downcycle end, as anticipate pressure, to earlier, inventories. overall Bryan dealers rationalize continuing And than further the going I as you're a of in deeper especially we indicated has bit at to a to bit see next that continue the to little to

technology, We interest and two continued these competition. to we've assess are invest ecstatic Barletta. in in further market of marine conditions, the the assets. prospects. the of ensure the in healthy outpace businesses to in industry term, under We're know, infrastructure call But brands long people, investing a they can both about and have that the on you that potentially we And have Chris-Craft marine expressed bright most for

tailwinds reach Marine to the stayed in further recently. someday. find I here of they've again trough respects, businesses through there's in some think go downcycle bit little pressure So, some and to RV start before we many a there ahead a But

you. Thank Okay.

you. proceed. Please for the line And Altobello moment Raymond Joe of it question, James. comes next Thank please. with One our from

to regarding guys. your earlier comments Thanks. morning. Hey, Good I to back go want pricing. just Towable

I that ASP that the don't maybe models. year will that be given higher you model I going and but may down are in mean should pricing fall. you allowances to coming down mentioned realized 'XX, down, costs lower-priced and mix assume your rather that think like-for-like coming MSRPs be discounts and

about how in Just get you're a 'XX. want to better sense pricing thinking of

this Joe, that as is address Bryan, and needed. first Mike. I'll support please

street And for alluded that trends ensuring to, We share Winnebago our it of as on to the businesses. the where competitive and very Grand solely that. to consider us allow businesses. XXXX margin keep two Design be are our to invoice where cost part consider Bryan as hit lowering hit have market that depend the model cannot on both Towables material pricing the dealer We dealer of strategies, to very bill year in may necessary focused seriously retails the and we we our on market to absorb want the we will those price

in to terms whereas The of the Winnebago price. pure Grand has tended sure promotional on and business bit focusing be a brand we invoice little making more bit right rebate have a little Design has the been more active historically

of particularly need to be as be active we'll in we well, that the the And Winnebago ultimate retail is the competitive. where consider that. on need reach if at be we active both to ways, may particularly sure those we invoices similar in invoice in Design, places make to, will need on adjusting that price, brand So but different Grand promotionally to we market

shift. need that we would mean offensive I standpoint say as share stability and someday pricing that from on we remain And terms more the to costs have be So, see does to in progression we a again. market probably of agile

you you it. spaces? Have shift the the helpful. any RV or exiting maybe Very credit either environment. lately? to Got any to over of And just seen Are changes hearing Marine lenders

seeing the not the not much up rates to in go side we points side, On probably financing interest the on side, seems a seeing be stable up XXX environment. costs it retail range We're floorplan retail the floorplan certainly side, pretty to any get point. could It exits. are of go or or on but financing the that quite as

from to the availability willingness certainly, So seeing you're cost side and pressure lend.

been retail side. see on have tightening We some the to expecting

retail of examples to think financing, anecdotal and bit had terms and the often. But that in you're a seeing little we of not FICO little from maybe I these where selective. they sale a creditworthiness not and score are dealers in it more lenders fell bit being hand through a hearing

just It's So at a more availability to still that level. the there. costly is of it be seems credit

it. Got

Okay. guys. Thank you,

Thanks, Joe.

next from Citi. the Hardiman question, One Thank comes moment it please. of line you. And with our for Please proceed. James

morning. for taking my call. Hi, good Thanks

bit but how, help have your of to But It out been recent own business I'm I connect think agree if most the your dots numbers questions your at last RVIA have trying here. sounds come all, maybe for those with have since expectations own a months? figure in me down like answered, quite the my you Obviously, update. numbers. changed

internal current morning, Good with market would morning businesses expressed I This discussions in is the XXXX. our Yes, obviously, James. correlates to conditions closely about we're this we Mike. what calendar say having

all year 'XX as time. of we And having forecasts subsequently, the observations you the Our August. our in at not ends, at of calendar know, how fiscal this fiscal year the discussions guess, significance through or we of to XXXX. 'XX, any process think market act, end And for on much ready are annual but I calendar not of projections about we're year obviously, through will And very that most we're or, period. some just period share internal planning

the not six see to see is continue dealers the on more believe ton And the the retail that if a potentially point then here refill going grow talking obviously, shipments a see momentum. then stability we're wholesale timing of most, we appetite again. point. months, if filled. going now think conditions level a that potentially don't less 'XX nearing look RV current to the where the do math one-for-one discussion, retail see RV to business, will bigger inflection-wise you're side. the of some James, I environment But then be on 'XX on and turn be time, all, at about forward, in next of can supportive And bit corner we and what probably is changes is from market obviously the But over destocking especially this versus a changing in what like We

this we're optimistic manner. industry the has downcycle in a through healthy So, relatively that ridden

previous to or have as for once and bode in stable down I downcycle disciplined is seen relatively being quick in back some and well any and as dealers the this inventories And are probably velocity cycles. rational a think OEMs, been most retail suppliers should rightsized. than we've finished that wholesale turn

on like continue the in consumer future. -- engagement I'm optimistic activity more supplement foundational financial see, And Consumer that is prospects I'm bullish and be engagement we'll in to several we the into that retail necessarily the to tried outdoors. the deck. the we'd anticipate to not-too-distant underlying We the results. momentum or that about our optimistic to that slides a that's highlight So, while very type still in not in that's there, in call, outdoors way meaningful today in be also resulting able tap future our of is wholesale in throughout strong. our that to

That's really a helpful. of lot Makes sense.

is fourth think you're sort the and more if like said here, right, together one-to-one you And out of I what end what of about very things saying are units sounds by what the of a hoping that little the we're you be sell. is your going lower months, -- 'XXs little very piece I year, few it and few sounds normal, of hearing nearer that term, model so, to left you're to everywhere focus a next the of is -- have and quarter like bit which it tier clearing these brands, But year more those wholesale-to-retail. if the

And maybe don't replenish in seems as expect much of share be that this there? should making to is like too retail higher, so, itself your stuff, of the how numbers? they am terms in I we focus expect you should as quarter dealers maybe we some have, leap It that a of manifest or share to your shipment on but lower

good we six to increase years, previous in which of potential at last a actually share shipment bit point than a three little been retail the some the higher share has our in believe James, months foreshadowing is future. trending

I are to share think on our some we different continue both various in a little cases, there market Bryan reasons that the in we've other and share. I is lost In in call cases, gain commented spots. certain the term. And what it have short share is in ways why

in are to I mentioned to as our other much any this our control And working aren't in due like. that potentially first reasons as we'd we're morning. that vigorously in that comments address. that share And my of the for are reasons Some hard dilution of control, half

you've be going not the QX I for specifically, We're top-line. heard in statement that's the Bryan But than for and the a that a RV what and on basis our from And little limit will on Marine obviously, I QX both to comment morning segment QX. challenged today. think than were they year-over-year both this for bit to could top-line conditions more probably

it. good That's color. Thank you. really Got

Thank you.

next the proceed. of Brandon it our for Davidson. And Thank from moment question. you. comes Please D.A. please line One with Rolle

Good taking morning. you for my questions. Thank

has Obviously, your you upcoming you earlier consolidation. Do limit mentioned Thanks. in their network World dealer were like feel Camping from you dealer prepared could dealerships. your very had acquiring in the remarks, think aggressive years? upside your watching been absence I share market

Mike. is This Brandon. morning, good Yes,

dealer our We of consolidation watch very to intently businesses. all in continue

with business our businesses stores other with open Marine brand degree of our with brand dealer Each Newmar have at the maybe to as Grand this we groups. does of of we've they our well, Camping today. But or side. the relationship market-by-market do Winnebago of specifically has markets does in our a many basis relationships the time. not World brand all dozens dialogue as the presence a with RV frontline really seeing on Design dealers. each we're on recently dealer it And seen and the cases. we take not in consolidation have an World on in side World those with Camping And do Camping businesses conversations So

successful and brands, to other attempting an and large open to businesses any win-win groups do We respect where and World to relationship we dealer have a of Camping create considering that. opportunity what between retailer there's are to very our any are

won't here Industries that or you hard So do tell is line at I would we no we Winnebago there with business that will certain and dealers. fast

solutions make to try dealer company, point basis. of on market-by-market are on leaders a win-win with the to of unit business groups Our also in find our but all best the interest the decisions

And with help many watching succeed. active trends we groups all carefully dealer other discussions how of have those can to so and each as we're

just finally, I don't if on promotional to inventory? industry inventory throughout shipments? get And move Great. model ahead promotionally 'XX model at guess And the evolve, activity factory say, 'XX ahead for with 'XX the Thanks. of June, the mid-July. still obviously, is How year end those units it of going does move the dealers sometime excess level, how early could seems year in there units that want aggressive you to those the like to

Yes.

discounting, or support actions of with what field our line the it's move Bryan we back is earlier, saw generally pre-pandemic. indicated the amount in whether to inventory open to As in

anticipate And change in off-invoice so, remainder allowance line sort to we sort material of our or that move line of don't probably of XXXX year the model inventory. sales

Bryan model year on we're high at excessively XXXX stated, not time. As inventory this

I so our a Our introduce them inventory. that QX. in continue XXXX through moving to as to model products. transition in businesses take did make do we here to a think most businesses smooth that, a to we'll with with of from good move That's of we year support to well, of our XXXX care dealers reasonable that moving good really actually that both as is in job early can work commitment our able a And They QX. job to that be

because So you'll see I to impact topic don't our of financials that alone. think abnormal

you. Thank

the you. back any Q&A of And like to I'd portion management this turn call Thank for final concludes today's conference. thoughts. to the over

the earnings of our third quarter call. joining day. Thank for end you everyone Thank Enjoy your you. us. This is to

and gentlemen. conference, concludes This Thank you, now may and the you ladies disconnect.