Winnebago Industries (WGO) 20 Dec 232024 Q1 Earnings call transcript

Good day, and thank you for standing by. Welcome to the Q1 Fiscal 2024 Winnebago Industries Financial Results Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker, Ray Posadas, Vice President of Investor Relations and Market Intelligence.

You may begin.

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

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

call thank always, of performance fiscal during Winnebago time for to Bryan will an in overview Thanks, XXXX to I to provide more the morning, Hughes financial and results discuss first for the taking Ray. Good then as your in our and cover interest you detail. Industries the quarter our pass results. quarter

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

Grand face RV X travel, in real short-term it unsteady, dealer we North quarters future the other fiscal past XXXX as call challenges. America inventory to Consumer marine the true our X into stated with would fiscal X in this fiscal aggressively leisure first wholesale customers. were October factors. this that had within little competitive lifestyle, during the XXXX earnings anticipated demand dealers continued of for proven constraining half to given projections, still especially products potential relative generally that entered a RV new and than not Affordability fiscal first our period. by for year macroeconomic our formidable X:X September, would XXXX for hopeful we was the outdoor and towables. channels. The projection line and to in while an We better has become last face wholesale recreation managing And show Design year As appetite is rate with our of Retail headwinds, year confidence and ratio market in difficult numerous if improvement boating boats retail to quarters replenishment anticipated inbound developing in related forms were Barletta shipments. new XXXX months

lot have the through QX this further will impact subsequent in will especially share what and our February of the holidays we A, of the profitability sheet QX detail outlook on a solid retail brands remains balance by a in strong over on production more and results Hughes these market discuss well. December into with outdoor portfolio; also value wholesale While believe inventories they to and period an and our positions, in continued from of seasonally believe the XXXX premium the core strong dealers term, strong enterprise brands we the their the were back driving lower, in short a done selective in very X XXXX. a and later reduced nurture the the Bryan B, for half as Industries of prepare economy have businesses team rebounding across the job that reinforcement Winnebago and challenges, proposition robust preservation be and investments vitality we focused in brought amplifying our as outdoor our long-term will in QX excellent health, financial constraints objectives: calendar our retail for in with year lighter and similar year balanced commitment during what call. Despite

and XXXX numbers engineering, and historical maintain Our include in well are in elevated the and occurs. of situated RV be fiscal when the development investments strongly our our digital year the Overall, IT will future initiatives incremental on increased capabilities. marine cyclical we position to QX data and and bullish participate SG&A it to spending asset These brands industries, intentional. upswing

cost of the our year resilience variable results well operational of fiscal excellence XXXX improvements. as discipline and and diversified as pursuit portfolio Our structure QX demonstrate production our

as in We for RV our and fiscal in Towable we first segments addressing multiple consideration RV aftermarket marine our product vital commitment the customer are outstanding and within satisfaction releases with motorhome affordability also product softness net we via service. Overall, in revenues while marine surrounding $XXX to unit navigated maintaining quality million and sales. achieved new focused quarter,

gross earnings share delivered in diluted margin Overall, XX.X% driven $X.XX. was RVs adjusted per by we of consolidated strong performance Our segment. Towable margin of our

across their many we rates of during through we mitigate inventory year October of work industry period during year field for and model to RV and not business. more have the the And first as returned levels, inventory a do Winnebago and added seen at industry-wide the anticipate The significant turn low further spring. Dealers not Within of the inventory unit decade, pre-COVID quieter some in implications industry, this segments towards inventory than are historically XXXX RV for to XXXX. the time Industries cost status. in continue gross financing months turn Motorhome on destocking Towable cases, unit inventories rates higher

our targeted capacity, manage manner, and in given marketplace output proactively a to dynamic conditions. continue own costs We

Winnebago attractive products. premium Influence our and Serenova we are and we officially new Access Grand The recent on own pullback as motorhome battery the B upgraded retail of Revel The are began next lower even motorhome all-season highlighted features. trailer Rebel dealers, the a the the Both broader industry's organic Design's generation brands, living and new retail Lithionics has featuring back Class and Winnebago-branded Reflection luxury as Marine and of XXE fifth The a generation marine anticipated, year XXXX. Coming our extended a introductions. year stabilization, year XXE on also well of of year as X and value our Motorhomes. our capabilities, Winnebago battery second- to to speak will QX, strong Winnebago of price and strongly providing space so signs segment customers the begin brand EKKO fiscal season market several to to inventory off and focus shipments EKKO the RV costs. The and quarter levels the package an in Revel in examples orders all-wheel-drive on third-tier connection new XXXX inventory. Grand at multiuse rationalization new first lithium exterior quarter and anticipated chassis, of solar points Importantly, the M-Series chassis. interior model showing built with modestly-priced across elevated share last boasts the RV Design consolidated pull retail meaningfully models all-wheel-drive motorhomes share on of following market quarter, Sprinter January advanced Grand seeing performance The first is new XXBX, next is lineups. In reports. is the advanced for price an GTO Mercedes-Benz also with power impacted will of terrific additions continue as points Mercedes-Benz Winnebago Design our a these popular brand quarter features, C boasts shipping and in do XXX due wheel further in banner XXXX, This is Class and in new Revel Last built more Winnebago Sprinter added models XXXX solid fiscal a Echo combination. in specifically SSI X. for launch the

the segment. However, encouraged seeing the we are trends retail are in pontoon specifically by we

reaching business of comps has now date in Barletta to year in the continues and points segment, X-plus above to positive reports. gain share SSI in run aluminum share fiscal recent Our pontoon XXXX

However, go Similar the positions with to closely with continue spring year freshwater feel to working comfortable the more in Barletta for we northern their Marine RV brands, dealers, innovate months they to new as as especially our season approaches. model are that inventory capabilities the with so businesses reorder winter releases markets, optimize our XXXX.

feature. seating During transom, XX, industry's console in first center the anticipated twin the boat Fort October, Chris-Craft boasting has of with a and this groundbreaking boat's the center past configurations brand Lauderdale unveiled a Show the technology. engines mounted Seakeeper the Barletta highly Boat versatile offering the patent-pending with introduced customers ride pontoon Catalina

line and feel. Reserve a the addition, decontented the is new as In with of refreshed the ARIA premium high-end entry-level released a version year well, simplified of and look Lazera offering model affordability ultra a Reserve X has

mentioned, continue have our often As Winnebago will position of invest, innovate cycle. businesses long-term the entirety through success I economic the for and to Industries responsibly

variable future shareholder We win-win enterprise will market. Winnebago With over positioned will I value capitalize collaborate on closely the this on creation our well growth strengthen now inventory structure long-term further that, hand disciplined Hughes. and and to highly to to management, to achieve cost prioritize cost dealers leveraging through our align capabilities, and opportunities profitability Industries with goals. production approaches remains Bryan

morning, everyone. good Thanks, Mike, and

supplement earnings as and, all Before so drivers solely will are that instead document today well results, on I Investor you I reviewed release our our I will from efficiency, past our website. the financial focus refrain begin, Relations I refer would key On improve as like of verbally have earnings performance. to on to and key calls, to doing document our

to slowing impact to by the conditions, first reflected of the lower decreased price allowances. to consolidated unit our prices mix we deleveraging margins extension, of gross greatest by allowances proud and average quarter despite related sales, compared period, reflect driver have offset carryover sales increases was selling decrease discounts XX.X% related but lower and to and our delivered XX.X% a which fiscal costs. higher By the higher year-over-year, motorized and the discounts market driven across segments, revenues higher partially XXXX are profit profit all by Our of product for decline quarter gross margin chassis XX.X%

product of for market digital volume favorable Our higher our the to our down increases strong EBITDA and our Revenues of was some EBITDA our allowances, conditions with versus year the excellence primarily points dealers and across performance prior a new X.X% of margins margin costs. Segment was were is year-over-year ASP structure, partners costs. mix advanced now our to from compared discounts This versus down year. Revenues was level motorized prior for operational businesses. decline mix. IT XX includes EBITDA the and gross as a basis Maintaining current XX%, of by XX% XXX the X.X%, operational driven adjusted and of to in ongoing contributed trailers result EBITDA of margins our due of discounts each partially chassis points segment unfavorable pursuit Adjusted cover by down adjusted and segment prior sales lower price year unit start-up and Towable basis transformation margin technology, growth due deleverage X.X%, deleverage, and period. the segment. offset to an and product the Towable sales was higher travel unit of prior RVs as to segment allowances capabilities. I'll higher X.X% which the product relationships inefficiencies. lower RVs down by cost were result enabled strength relentless the year healthy and Motorhome delivery investments related profitability supplier variable and the down

by those shared seeing excited look year. are during prior call, launch to this fiscal Mike earnings and market forward new the Grand we enter our Motorhome the later to Design models of begin As

be limited Our therefore, reported anticipate operational. Overall, initiative within corporate and revenue bottom to impact million due RV by year segment start-up to throughout Motorhome we the our investment launch. sizable $XX to $XX category all financial XXXX not until Grand Winnebago our Design the line in about dilutive that behind other at results, income becomes this fiscal costs Motorhomes is the will million dilutive initial to our to pretax Industries be with will

years. However, a is future in we powerfully opportunity financial believe strategy accretive and for this the company

our investment by our Keep $X million expected, approximately results. was and expect we million we million our $X mind, anticipate $X investment accretive to that fiscal be between As QX, in to QX. XXXX to to spending in ramping

carryover due were price impacted cautious and compared slow higher Revenues the of discounts environment segment. the by XXX Let's turn the offset the primarily from for a volume result due as decreased higher our Backlog off-season sentiment year prior EBITDA to X.X% interest in prior Marine a versus increases. adjusted down partially but allowances, Marine XX.X% the decline dealer of of dealer basis and volume unit declined and margin an related year deleverage XX.X% discounting. Marine demand of first elevated as rate compared to year, segment to levels by also to to last. quarter points this prior segment to

acquisitions investments Industries Industries' like of has our balanced now the recently, of significant allow the and At the us investment debt-to-EBITDA to continued sheet to like middle Winnebago example, Innovation which the targeted the net quarter, most to for had which digital is returning our capital X.Xx, Moving capital execute ratio strategy, ATG Center, balance prioritizes while approximately strategic and to also core Lithionics end opening to sheet. the shareholders. thesis strategic is allocation in strong of Maintaining or a business range. the Winnebago balance a of our at

During grow over of long of executed the share further the strength cash share, market our the by to share new commitment million to confidence have and opportunities our quarter, the in in underscore $XX and and our we long-term ability to first actions $X.XX reflecting repurchases confidence profitably gain quarterly dividend These trajectory our revenues, we XX% increased capitalize per and business. our on term.

and network sales to Before has utilization maintain during when levels. upcoming more due continued experiencing. backlog likely in lower acute RV been to sequentially has QX the a to turning sales steadfast the RV and high QX dealer quarter. This back the Negative this interest comments our inventory from been from year Marine QX by production preference with Marine the I context historically upcoming sentiment during that are case businesses in performance our lower as rate QX to output that the well. network the we And first about the our and we time been like dealer that carrying dealer disciplined will be sequential businesses. the QX most related and call our quarter. off-season as our produce also efforts a as to environment dealer the made for current the our corresponding to Mike We ended from costs therefore, the over very reduced expect Towable provide QX which period, has the evidenced influenced anticipate by pattern levels by is inventory This holiday this notably previous higher Towable consolidated year second further as will and current both on as Mike, to to and months into expectation would production year-over-year be minimizing reflect reflects sales approach this most to well for dealers This QX. sentiment are

sales not specific be will by sequential comments QX currently QX. We These from anticipating do in expect to We materially in modest in QX. QX that what are prior sales experienced to to incentives are was QX. profitability reduction currently impacted the change

that of recent ahead we expectation to weeks shipments range to the RV XXX,XXX months is shipments the XXX,XXX continue our XXXX. to year, fiscal estimate would approximate the increase calendar realize for X XXXX current the the units XX% the to shipment. a industry few will for approximately several retail is retail a calendar estimate continues XXXX XXX,XXX consistent sale RVIA and of last therefore units, industry activity look and with expected support in where ordering to in most in we the forward-looking the X expect shipments. With of an produce of half As patterns produce relationship to dealer wholesale return Retail from really last back

We year I expect back our the comments. of some that, turn half that the rata call now fiscal pro to therefore this to back to you. portion of expected back will Mike closing realize With a provide Mike, will increase.

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

estimate As for units. shipments XXX,XXX stated, call of recently RV a Industry Bryan revised aware just calendar expectations as many the Association RV and on XXXX to midrange this their are

with year correlate at time as aligned are will industry retail this projection We well. and number closely calendar with believe that this

of the our pending provide assess and to Motorhome will originally our season, Investor long-range launch a retail lineup, announced earnings implications Day, during call, we targets, our offering with we the As provided XXXX XXXX an investor second March. On Grand quarter upcoming news the update financial of Design operational in concerning community of the during brand last earnings failed one a honor complementary of Association Dealer significant RV our call we to created, reputation brands and Dealer most continues receive. Award the fall, Satisfaction strong reinforce an every Grand product never receiving they successful Motorhome of set Design our Winnebago for as RV past this to brands the to have core products ever current one its Index Newmar its portfolios.

center, excellence serve doubt within no the shipments support a will our Technology fiscal X opened the be In in in will XXXX Advanced lineup, efforts that innovation motorhome unveiled fiscal to Group's and of marine of anticipated design center products in RV this years new first Horizon which year fourth emerging beginning and technologies. ahead, the which Industries their have of engineering with carry as X center We new and will generation later will Winnebago will new on for our a harness quarter, company. the the excellence apply quarter. Also

with and of is product marine products catalog strategic application its go the exciting outdoor other months its vertical well important battery the and roughly OEMs Industries' Our acquisition. products penetrating integration following technology business into X system packs for Winnebago of battery Lithionics preparing industry. with electrical expanding offerings, to portfolios offering, Lithionics Battery this continues expanding mobility management its

from Board at a of be few directors XX% Battery; battery color acquisition XXXX; dollars the of XXXX manufacturer, our a $X from for The color our significant, in across to of XX% than impact lithium-ion towards since technology an the Scope a Universal the features the reduced racial and Accounting global with reduction Index. Highlights total RV X Force top the aligns promote diversion on compared value XXXX. greenhouse a base provided X to new 'XX, the their ERV giving its reporting fiscal businesses. absolute and recommendations addition further financial first efforts, prototype, power submitting the fifth and line a product protect XXXX; directors recordable will all-electric to While Conservancy index gender sales impact in report will company's corporate incident women XX% sustainability corporate years, including Lithionics include: with Industries increased by be the that more in Chris-Craft, annual the more concept will the Very Industries progress in support portable representing partnership Standards, modest women introducing volunteer boat Board's and climate and in million innovations yield Winnebago enterprise; another the goal, in and to building profit of communities increase XXXX; no last toward week Industries X strategic importantly, XXx Disclosures emissions report. aligned first to Winnebago here from Winnebago on an across Scope XX% upgrades landfills company rates responsibility improving responsibility contributions knowledge year Industries outdoors; released enhancing well Winnebago as the XX% from gas initiating reduction to year serves Nature step XX% progressing CDP to Financial and Lithionics an to the diversity from questionnaire, conservation company's company's all-electric Sustainability in company's change disclosures; of initiative, waste the Standards Climate-Related climate-related as fiscal the with and since and of large Task the

as their in the dedication. and have to hard we employees and faced entire dynamic like They continued very would agility amount navigate I conditions. market work and to continued gratitude demonstrate Industries' of team change to years a Lastly, of the resilience past Winnebago significant for extend many my

That morning. the operator prepared now well. for I line our and are wish as call season, here, I of team them call the this this and their families and who listening safe in over turn extended remarks a concludes those the up will of you your happy back on tremendous to holiday a each open will have wishes questions. to We same and all

is [Operator going Truist Instructions] come of Swartz And first question from line Michael to our with the Securities.

on second the it made. Maybe given is first quarter I don't the you obviously, think will I big versus just to it's will be and quarter, are drill across down down a a period like be which outlook wanted I that down mean, sounds mean, sequentially maybe into I to that revenue margin surprise, trying commentary dig sequentially, seasonally smaller to EPS. the quarter-over-quarter? anyway. just But even EPS down maybe you get

is this Mike, Bryan.

With experienced, in far even I the we've that's the our sequentially. And as the be allowances by and the different. and to meaningfully aren't versus prepared margins of been going remarks, discounts deleverage driver said biggest last year

but think we're comments extent to I deleverage, expenses, the can, deliver, should we conveying. to that's lower cost will lower number. variable of a the a the So sales profit that that leverage structure Obviously, as message interpret lot the cost. our things doing we're you such, the We manage through the volume

Got Mike, in your you, preamble. the this were think, I And you and okay. just then discussing in second question, -- --

and versus in of a marine color we talked optimism days, maybe or the a more retail you what in the in Could us actually maybe more seen XX last were XX past give both when flavor environment, where Just in the little terms guess, you've maybe retail I industries? to the we on the October. RV just sensed, environment, little back I

Grand 'XX comments to and the generally on been of now. we we that I calendar from both say did projections RV side and so as obviously, both the prior, positive I that and marine are my weeks. had mention right mean environment retail sort seeing seeing coming trend positive, surprises has 'XX Design year internal And a in both when lot here retail have we the weeks over RV that's the in positive. I tracking same calendar aren't the indicated, for positive headed of Barletta. Mike, the line It towards, truly

we trending are are, in The prior. again, businesses year improving and other expected comp versus as a standpoint gradually the

if are and of ultimately the to retail year overall in Bryan level we see XXX,XXX to approximately, to an positive later XXXX reach indicated, 'XX that both retail of RV we'll to units versus have comps flat maybe calendar trend I As gradually closer prior.

So no surprises on current the trends to that bigger we're projecting is in own just inventories. continuing challenge dealers internally. carefully term their And very the manage the short

And to our Kennison going of Baird. from come next is line question the Craig with

wanted Mike's last to question. on I up follow

improved would seem has to partners you're XXXX movement on from hearing prices anything just move if and I'm significantly, model Just affordability in by channel that math. interest me year your curious that given the suggest it any rates. RV based consumers that

any this time. that at very would to think be I subtle end movement

consumers either of challenge new particularly variety some affordability RVs marketplace from of or a in the the place support inventory units of Certainly, for address to for in are trying price through standpoint. that pressured and in tactics. aging are We includes boats dealer a may be that

as cases, then that even deflation disinflation passing of to on to lower several the we in the consumers attractive are doing some reduced that our will we're We in we is said dealers brands we the to points. And within or, be for new shopping well. thing as few of models -- more last a have definitely introduced, script, our inflation benefits price also believe

right year, of at material of the as a see Our easing time products significant marketplace. to businesses where affordability seeing in time are to terms difficult are the of have through in being reacting goods. Those a by to of retail-wise, But the dealers we a movement consumers direction going benefit pass well. that is fair that this lower Craig, cost bill the

years then to inventory, this models like compared time? could mix on you of versus be prior would that units basically XXXX the the at and And freshness of year model prior comment how dealer year

of Craig, across to are relative into get the can the RV good we our we of to less and inventory Yes. that end half rest brand somewhere speak X% We believe X to was year businesses, XX% I year subsequently, the of Marine, model by model won't our XX% XXXX. than look any our I of and that. we the of that When quarter specifics feel inventory was was XXXX. but in industry. means in 'XX, condition neighborhood model we at think of all year about

that meaning that we a If little would bit bit that numbers of a lighter as the the I fiscal little working model prior of point we prior being call numbers rest the The are model previous lower probably it in have side, scrapes are little year at generally, sell-side more a the QX, year that today inventory. RV little XXXX. end case, bit on current model XXXX part model In year year in quoted, of bit inventory, just model seen the in In inventory a versus positive that terms you position. this that some inventory. years heavier Marine of shape prior year from compare be through. I've a to analysts of year are some on and notes we're model that we less in time, way, that have are we that done And inventory. probably dealer online appears of industry have inventory good some the on probably that

that consternation a elevated not this So little but great at time. us causing is anything

QX will That's more one purchases as is I that from model model that, an year minimize as mentioned, into 'XX hear things we lots. did the is of impact well. ordering dealer 'XXs that want sentiment one that of that the year dealers think do things having patterns on those to industry-wide certainly progress QX. they on their they until impact Mike, see the We on and QX

line question come next Bret is our of from And going Jordan the Jefferies. with to

that Could a a investment? about you think and bit us sort bit 'XX? little color around we data, more of sort you about more SG&A talked in engineering there in Could talk of how the IT. give you incremental I think should

and felt additional lower our Street I this context last Bret, will SG&A little candidly as so well. month modeling then Mike. I'll what Bryan a was add some is through that the had the than probably planning. begin been had or we

Our SG&A our SG&A actually management quarter plan quarter for in lower X. than was on X came for what

year, is different returned Bryan the probably side for you than the But in fiscal in the the can. But the more bonuses bit them. a saw its our I to manufacturing to I'm specific certain nature little variable to of new articulately being things we organization. really some X example little bit be of than a things call, I engineering to roll referenced employees speak over, and SG&A of as reset that would in a cost one going business, as So speak can

the spending systems. are pedal tools The almost our fiscal standpoint our the -- modernized new around in world. systems, future. the particularly in that are businesses, ago, us obviously investments like products years. I the digital the businesses we to just in development making for terms And products an of company systems. not Winnebago will help advanced we future ERP assets. changing modernizing world are more systems. We're of systems. IT engagement of from travel and on around stage in the I will work technology now with within in when in are area with dollars that service Industries, intentional the keeping we way business and topics to And IT the intention foot path, new introduced of lastly, be their a compete electrification, about in even businesses phone making And joined years digital to We and in foundation continue that we the systems, did effectively year talked investing was in in the later from the brick-and-mortar business is future financial X our along numerous a environment within this investments fiscal setting analog digital customer in or We're management investments of customer intentional in making all relation success consumers. and online

adding that. also of resetting impact of are of both little a had probably on our some a investments, aware but context? Street on in we but that any with this So Bryan, the other approach guys you bit quarter now of those misalignment SG&A

Yes. a more I'll context, Bret. give little you

a more structure more fixed. have cost We structure, it's small would as our estimate. high-level XX% but of clearly really our SG&A being a variable historically I variable. is part about a of use cost much XX% talked

plans help some We've since also that So unit last might as an added of add year, and year, Obviously, the next. variability not impact all also not that, accounting since SG&A that QX, cause but very versus that to modeling. purchase quarter the the the last making, sequentially investments mentioned we're well so that intentional. X the bonus as from the from Lithionics. that's might business He mentioned deal. Mike

to SG&A as next appreciate also some with So general, to items the subject X deal got we more you is nonrecurring type to that in well. quarter from volatility as

we'll those they additional guess to commentary So add. the continue I around But of occur. I provide types that's as things context would

the guess forecast at couple they and Or think? could years? the RVIA that years, you ended like I down enough last in do happen 'XX. lower, already the you that percent the for and a to great. question. pretty seems of line Okay, last guess bit then it's of substantially little this it conservative RVIA derisked? high I your see in a with I are they've I number in started number what would come forecast. do taken out below XX-plus the couple would it up substantially And guess you guess, as quick think point, the cause that's has initial

RVIA with Bret, to that help leadership we to committee projection OEMs collective number. of working team when on up mind that the element The members are come with a market to to that statistics shipments. that comes you And that's our suppliers set good with the thing process me a in RVIA question for have participate is try timing. that and ask for

'XX but 'XX. think it only in of in here think Winnebago when a We peers I is anticipating that environment. not our referenced has begin feel -- difference will a confident to be not that towards will wholesale dealers relatively to some X:X think we're question retail versus Industries well. And replenishment the large trending calendar I retail more ratio that flat as calendar

a consumers to retail cuts confidence And and rates, higher more be healthy if of boost help of of retail dealers. consumers. trend channel RV marine down number. Certainly, if retail determines shipment inventory the support that confidence also the really it put shipment could to if Fed certainly deliver channel in that comes environment so in lots is what start the that to industries, And flow will taking our interest return on positive, sort timing easing or and feel some terms think to energy to the spending their ultimately with to I

balanced I think RVIA more this number. I timing. new shipment in downside probably XXX,XXX think So is number of upside terms the and it's And at

BMO Tristan come question going Capital to the next from Markets. with Our of line Thomas-Martin is

your Has last for ASPs the year full on quarter? changed view since

Towables probably versus what term near shift to towards in we're product. QX QX continued side, probably fifth in wheels least stronger a to at the as is more a be travel On mix, seeing trailers Tristan, in and in migrate the affordable consumers

a I will think and we a to have number. we quarter, think on continue than recently conveyed, I as last have bigger mix impact as ASP conveyed what

mix On for the rate seeing Towables. rate we're probably on ASP in that decline more Motorized the still the of much reduction, being ASPs pretty on Marine a consistent influenced ASPs. Towable from versus what in The mid-single-digit low see we terms like-for-like by and side still side, to

like-for-like? Okay, so on that's

Okay.

in was QX, mix that reduction larger. here the the impact that So drove much

Okay.

now digits down quarter, Strong So you down single saying? it you [indiscernible] is low last that were mid- During to to what a mid? say mix-neutral high on basis? Is didn't

this moderating. quarter-to-quarter seeing it's neutral We're that's pretty at inflation Yes. stage. I'd say

just then And X to more Okay. thing square.

industry? the least greater What shipments the kind delta reported were total versus industry, over Your there, the industry at of X of data. much months you was the than

Tristan, is this Mike.

I lot tier on seemed, had think influx we on several the during continuing dealers this industry. it talked a brands particularly continue benefit years, think, referencing Grand of We foundation. from Towables reestablishing, I to to see the business, Design dealers gone that assuming now. And our share Newmar has right that RV some job for solid the has third of issue COVID -- I'm you're has That took We're would business its inventory second brand make hard a with think done are its where sure the frenzy. we Grand to I like to a share say good that also stocking really lot and from reestablish worked are levels dealers Design standpoint. working largely with appropriate.

And has last I the on months. our way don't so lot swung shipments couple think unhealthy an based in of share

where starting be. it's it benefits of some think to to think to see back we we're well, I activity. some retail And share needs from we think, as that

think sign to I with stabilized not mentioned just right on retail ticks direction, the come Grand in the small in up their particularly on more to a but we As positive things take call, has started some that is Design RV, of brand. which

to stance going okay. in that's if sneak open your X I'm Okay. everyone Can you more on building remind orders?

production order of businesses stance non-open cycle. as know, our open shifted ago, But a through certainly we've years many you planning planning as order predominantly improved open on added Winnebago largely Many, evolved our orders quality the to the production Well, brand call position. as used motorhomes we and has years. a the of we've on most processes,

happened we have in challenges still intention number production reasonable different open to challenged Now chain happened. the minimize ways of units number. to At a as current our number cycles of build have that's been is supply time, the and a this that

line. their still teams to our on So with have our when builds that business stay that but to of is are we we each production begin of a open, enough probably ahead orders production working far sales unit business the percentage our hard small of

working we our have to sales the match As process. work sure production we you down, backlog, and its that that to make our can teams saw from to way hard effectively have orders

in disciplined order of So we reasonable production be production to to as quantity manage of as can, amount. a both terms trying we're going also open but to

are to have waiting of That's to been the some happen in and units. building We and holidays of open why that's dealers not here not full approach, some take over our downtimes generally our units lots extended for plants. spring we those

with going to next the of Our from come Raymond is Altobello line question James. Joe

does question the travel Towables wheels. Do on fifth that, impact from improvement overall mix How to First away in base margins? with shift and expect pricing Towables expansion see in margin year? coupled this on trailers guys still expectation your the you segment for

Yes, Joe, this Bryan. is

continue Towables will that QX, I the here, as mentioned, show in show, I QX, business to continue the to the wheel. will think term outpaces growth near fifth

where now is lower-priced their just right at for unit. the that's consumer and preference a I think

perhaps specific that continue dovish see mentioned improving, as developments, call, the showing that has rates the our downward products. costs inflation, and some the of moderating to some been think trend, approach, more be on to I and a on to of on have them seem both confidence interest well consumer we already a positive speaking broadly fuel wallets impact that certainly as consumer as

I those growth think we'll towables more wheels. the In periods. see go-forward pattern words, see things, will other a fifth of as in we normalize that to and some consistent continue between

the current expectation. that's So

really the in would to categories is other as There's there guess send little price I all bit and it question gets message doesn't. does really no, your I think the I industries. materially our there points. margin differ is across a product

position have what products that's how of higher and price I'd or some we a a should really probably where approach bill margins might you that assume than higher there. deliver we from build we perspective to we consistent for more the versus the that's innovation-driven not say things in our the and at materials Ours competition, margin pretty But differentiation But think striving we better we're in average, differentiation. price. than exception realize modeling. point-driven. lower an price a some from and them is the always units innovation And price

Is quarter helpful. last are Okay, on you called issue press they the you release. or operational the that saw same new Motorhomes, maybe And issues? some issues that's this in issues out or

line down was I'm we you of similar the now. of right A see lot some some add. that have sorry, can We on have, things. We I'll some though, then we that products the rework going some newer did with associated did was lower activity productivity necessary. recall start, in and had that QX Mike,

So just generally an workforce workforce additional margins costs some occurring. associated of I'm specifically in activity. And a higher some really have warranty that specific to as that speaking the some recall impact was well. might or verticals okay? And was some had flexed certain There then here, with Motorhome bit

impact an X.X the range. are EBITDA probably in points call-outs. those So X margin of that Altogether, to

impact big the a still, was we've certainly thought, in discounts as as in as as margin drivers, the I and it not quarter. So worth allowances out an calling primary that EBITDA out called the but deleveraging impact

And our next question comes with MKM. Stember from the line Scott of ROTH

the what's carrying maybe at big forward, all order to meaning picture? hard lot but a scenario to of of patterns obviously, talk a you have prior just-in-time product. dynamics now would that cost if just cost And the materially right bigger see? discussions it's to going happen, maybe hearing I changed in adjust for batch through the has of more Are the you will dealers, chunks versus handle to change know can orders going tell Mike, that? you any of the you structure so, your do kind that

the Scott, for question. Thanks,

that that, if the recent months. ordering they I they And that of dealers on your be higher terms sense from correct confidence that have generally dealer new anticipation, orders a of certainly So something lots time going I in can not or that I don't patterns product a at time, think get OEMs customer there. the product changed more they can on that for that's lots, who of that's think present observation is elements a their quickly mean, to have couple have retail have they in dealer secure lead their new shorter.

of supply we lead the still there few particularly aggressive some we products, end which just get are all careful of a the on certainly the Motorized longer well, because even certain I how chain be as to Towables that and about in think as to well. elements the have times industry of are boats have but

constrained there'll be that we forward. Obviously, our in as natural see in we be base for the place short and will certainly be pendulum going period think that friction more the moderate today a should a confirmation particular term. around that good months, comments believe, put order very I So QX some more that viewed will shipment that of

along. we resulted employees at here a less growth at the we've the cost your question time being a Unfortunately, -- standpoint of dealer use. ordering same of and the will that doing think on compete beginning spike at retail that at permanently again roughly infrastructure develop in environment one standpoint any a for future systemic at X,XXX in at peak dial part sort change to of employees years. that about the quarter. the should and the we running within dealers and several manufacturing as from capacity. Certainly, of really all that obviously has positivity the we the gaining an point, as nature, confidence OEM second had the are of employees I second your low structure cost needed also we're and We talked our end depend the production about over been And around looking potentially X,XXX part But businesses. of is looking well, we've cost structure, at that first variable more next have pattern

the above structure we'll playbook change very and business cost So material and we way through be And any years. scenarios. to of we've the those the prepared we have our with any news of if the variable a update for decide appropriately certainly used that to meaningful investors beyond in

a cash I than or should again, helpful. the we years? Higher we cash on the know 'XX lower flow question And as last of at far look that from guide, capital, Got how profits? -- should flow. last perspective? just look free guys And couple the it. you then but as at don't Very deployment of how

just ordering and speaking, can year, the been Yes, is we're QX. dealer QX, not that, to Mike I'll the case and likely patterns stab a for Historically first about same at be -- this Scott, take with quarters talking add cash-generating us, on. that they've the particularly for has QX

is environment. continuously things management in this that challenged One have the of difficult we been by capital the of working

impacts way as you don't certainly just lead when you You negative have curtail result. as mentioned plants' that a the that line long and traction have the your production see top a times, earlier, to Mike production in getting

So and to start that's as in working bit a as be what we expect as position we're season that fighting up, volumes start into a QX, aggressively. QX, those managing the little tick that right we'll now, get capital to we more of

capital working that Scott. really it's on, focusing we're So

QX, to capital pretty returning little things question a do, aggressive thing in use And your that well. as considered, into bit as which more be repurchase had share right we and we'll broadly I might to think was here continue some thought we a to deployment shareholders cash the mechanism speaking. all getting of

the comments would that add. those I So are

Fred And Wolfe Wightman our to come next Research. line of question from with going is the

think quick half that for you back X about do impact see that wholesale? are guys improvement how we If then 'XX, about are you calendar could Just assuming And potentially retail and talking we cuts? you X. the rate do cuts, if quickly think,

We And as back first the changed. together year an And chance swing, we've the that put especially an half. I fiscal XXXX the August that indicated, period. upward our than of back half don't in plan time of July, that year we had improved has on at shipments think management our fiscal for time felt stance

on more probably things season. And particularly, and Q&A, dealers a though dealers in, disciplined inventory. the Even to pontoon well. that than couple category, much inventory by of balance taking working their advance very maybe businesses most say themselves bringing the as it we the anticipated being Although spring right even are retail out. brand preferred is I care yet in the One still to have managing selling are of talked would choice about disciplined dealers the we of in be appear but probably are of we haven't in probably now

cut been So 'XX did versus your headwind that point, into not expectations. rate though, factor has any our management a we bigger a planning. specifically of To plan our little bit in fiscal

a the 'XX comments, in of so the positive is about probably Fed so delivered And chance a certainly calendar cuts obviously, or ago an rate that sign. increased week

future. of the cuts equity bouncing rate relation frequency retail the of just cut general cut degree market in Certainly, consumers of on of generally will is the still I believe the a quarter, watching But this fourth and the back going and hoped. is consumers depend forward. management to helps with the economic be given but holding think more carefully, had the our in think view that of in we as QX to power quantity-wise we're we what the plan certain to I and point, terms spending than by pressured third going

Hardiman James going come Our next question with the line Citi. is from to of

So and previous of I in, to saying Bryan, of the going think just be we mid- wanted all were shift? Where be up in we're changes, stand I'm digits. ASPs. terms single changes apples-to-apples high those the mix factoring down do if Motorized, to both today modestly numbers in then clarify the that sort quarter talked questioning. of are when about going ASP line we last Towables to I to a

that for versus right today low mix. a digits year on in, ASP was had X-product All a a like-for-like it to large in XX% The Towables ASP price reduction Yes. portion business, I'm I think, Towables of mid-single down of what the driven ago was, now. we so seeing by the in decline -- like-for-like

I think what that, sitting assumption knowing the that's today, we probably right here go-forward know.

our of seeing we're some cost. quarter-to-quarter mentioned, stability or I bill in material As our

here shift sitting it comment that's Mike mix. his commentary that what so the of we a see on the on I'm mix. any intending expect side. what relates today saying Towables we'll be might to But kind let as mix shift. impacting provide that to consumer And I'm not I'll for expectations

specifically some to and motors to and that we continue chassis need Marine, think see inflationary increases continue marine. increases pressure likewise, to to on within Motorhome For price some for, I still cost we'll related motorized

anything So I make. comments clarifying guess those are on? Mike, the to I'd add

yet has businesses are at the I new introducing. that would or at of products our not shipments business Yes, James, retail say certainly full seen Towable the impact our

with the Design the XXX, very and And trailer, Fifth Serenova of Influence market. the the really Grand being to the Access all so Winnebago with those with brand Wheel produced shipped stages are M-Series Trailer, trailer, [indiscernible] in of the the early with Reflection travel the

our line a some will And so points before had that putting our we've we of ASPs and from products and be market than at mix in ultimately, into more are never products. standpoint, the retail historical price competitive

and we're that market future Towable think I about share our to hold the new to so like trend on side. And that's ability for optimistic quarters. continue over product why we'll reasonably launches our have And future, that watch in fight to the

something all-in clarify it. Towables we're down clarification it, about expect saying Just $XX,XXX the right Got in should double terms go-forward the Bryan, year? digits ASP, full ASPs that XX% or should assumption year, we of is you sure down call that apologize. just the ASP on rest the the a that for assumption? making But the page. think I is a I here, Are decent as, same of when to for say we the

Yes.

the the considering this I think the stage, for shifts as a pricing. going in double-digit as mix Towables well a decline ASP forward at like-for-like assumption reasonable is business

That's where after guess and the earnings substantially jumps the QX where I high, Is here that's is then And of the second about how Street not it's out you for the second with in look as a like Street Street there think with you then in but positioned? helpful. at of second right? when the in is terms Street se, was. Any Very to expect don't Do half? guidance per were of the anything help half, where modeling you what of positioned we first Street models, your or just you're beneath half, too is for $X helpful. too $X that And is, it. SG&A sounds obviously, I going earnings low, the Mike, the currently is Street lot roughly the mentioned modeling half. we be less Got you've of directing us certainly the that correctly. to look commentary

around at full guidance QX. this question. timing focus that offer this our going appreciate more time, the We not change all we're we certainty, in There's year position commentary, going James, the we're to point. comments certainly to to the a at time, to on our future commentary annual At on this choose on bit considering period. you but may

additional that full back and of then I year so won't offer time year subsequently half about just the this would mean. And comments any what at the

enough. Fair

Let me ask a question this way then.

getting assume right? stabilize up fiscal when all ultimately, You ultimately want saying and made about to thought for you during talking calendar fiscal just of sure. your this said portion and be things of but of of The better But that? just calendar like increase, overlaying materially really the the It retail guys sounds I mid- was and comment year, -- the the meaningful a second wholesale to a half and the in shipment -- comment right? that some industry the RVIA the expected still fiscal is at you're is late in you 'XX, the improve, rata would of which assumptions you increase where clarify then least pro shipments. you're remarks sort of think half prepared make year wholesale to this you year, year Can about realize going do a you 'XX second from effectively. But there

At this stated XXX,XXX number for retail equity 'XX have we year of time, calendar a wholesale to units.

that that As X:X move asked ratio. the think earlier, I aggressively question to was of I mentioned when more dealers towards in a about it's begin timing

the RV some spring happen these both side, on across retail the waiting, for are of shows dealers marine early country. think to I and

bellwether few shows. Tampa is weeks, RV up of coming the in one have We which a obviously

in large months. Boat coming about X X.X have marine month, Show here including We the up Minneapolis some shows,

on to into elevated to at the season going July we're even higher level run as the of their dealers retail a are that dealers stability math green some through to meat you their they bit into turns, the slightly begin if the do of the the and some in to think business would waiting want need year. shoots to if period. But inventory retail turns historical little see I going managing March of

is in doesn't to do But how anticipate that develop, be movement back said, X quarter shipments much as in this rebound fiscal be Obviously, as that. in year XX% shipments. I some Bryan towards a But X to that calendar that seeing we're do a we of summer. fiscal X:X. late in the And see our business wholesale end. of next anticipate for we the of a So benefit increase and year quarter that is to our disciplined planning benefit lift spring if this manage material. a our will will wildcard 'XX of is here what that 'XX, and and we'll continue think projected Timing accordingly patient to the gets

come KeyBanc Our next Zatzkin Markets. to with of question from going Noah is Capital the line

recent been wondering given the and in back or answered. there's in move half? size of the think about impact But of prices implications, questions any to Most in maybe the way margin you my just quarter second the asked steel if the it the months, as have see

the environment, back Yes. easing as of them, going being might experience manage aluminum, we that of lot so well. carefully. we're we cost what the as commodities, dealer to well we've we can we're certainly, lumber that going to along Noah, they're one Typically, realize we're about as to to to ties in that can all some commodities, of reductions customer. have our kind very in We've doing key as as this easing the more of steel able any call, our to margin earlier price aggressively do Obviously, end in talked pass and seen some that inputs a end to price customer to network the

But would of we reductions, the of commodities think easing to easing. We inputs think space. X handle like-for-like best thinking about example to cost example, pass I to That as cost favorability. any in but way Towables any easing about commodities our that and intend you to to for ASP end customers how try going margins those be extent of can along we result. kind manage talked I we're a guidance some that's be the would my to the that's of

expect profit. too way decline in I Helpful. the on mentioned but in it? decline second point Is a to Maybe of think you quarter-over-quarter it right put quarter-over-quarter EBITDA think a quarter, about kind of the to not fine to

sequential in and we've associated or usual with that expect QX, a that's that clear also a going from pretty so I discounts the top there's be consistent Certainly, to QX that allowances Yes. been to mentioned QX softer to little we line decline. QX. relative deleverage

I be through lower EBITDA margin versus in those you guiding QX. net-net, I'd a So comments, slightly guess towards QX

of our question Rollé D.A. next to line And is Davidson. come from the going Brandon with

kind Towables versus for the segments? right on Motorhomes inventory environment and you're could destocking Just comment the X seeing what seeing in those line you in now, the you're first, of the on space time

definitely a little Yes, Brandon, bit differently. thanks for Yes, the question. they're moving

and I of couple some and think the category of retail. left talked B certainly depend the still parts as a it of pick has to potentially category Class places, in on places Class on to we've as destocking But probably that, inventory could motorhome well. little diesel, be some bit I we some side, will some of parts a destocking particularly then if do where Motorized A would see further of Class the that A, were potentially

very B frenetic standpoint. the available a of has been of motorized been chassis A all demand and the the brands players you into overall getting of world for become lot from around have game, reduced. lot know, competitive Class intensity category As van new as chassis the has a

during actually that added could think the side is RVIA our some was in there more into quarter for plays But X I destocking shipments side, as we the we'll the fiscally bit SSI see us feel towable and month. October be So a if on subsegments. The back little hope how you destocking And largely at out. if finished. the certain is that channel inventory look motorized Towables results,

January watch how are comments and couple our to these as place play And begin on calendar then of the Towables here, weeks. end we meaningfully see to But of we'll don't through destocking we that carefully. as I we'll try continuing material of year dealers XXXX, here the think in hold out. February but kind calendar going said, last

last Great. just X quick And question.

on you coming might your You you with able concessions and tactics. had you're different touch suppliers the pipeline maybe affordability pricing? additional negotiate conversations about your addressing to, talked any are you price as down feel, that if through Could

Yes.

purchasing how that's do at of sort contracts with marine and the portfolio. the been on our can then a our that all other some of negotiation the leverage Our about of we within just fairness transparency that automotive costs consumers level working basis dealers other that can realize there RV needed the some sourcing then more seeing and chassis. works happening And they scale where with go synergy some relationships, to We've of really are remain of carefully honest of to lower that any dealing sure they that as That our I distributed. have the X teams not pressure that's very the realize on their some are enterprise our of deflation well. on and manage businesses. And across categories the We're on we to material the marketplace strategic with and a supplier. are across chassis that daily work businesses is and we premium in a based will in they're that. We the cost consistent team major say manufacturer. and we our are the here in deflation in of those motorized category index-based with will bill where affordability need and source make and commodity-based suppliers be to how suppliers continue terms

bare the business or is our in keep to strategy minimum order motorhome Our not to de-content flowing. products strip to the

we they the from side motorized on some So that seeing. navigate of continue some help the our are chassis to suppliers need to pressures

line next question the going come with our to Research. Healy John of from Northcoast And is

X of update guys that I in mentioned profile view kind that prepared longer-term or financial Mike, think of Just would an of here. kind kind off-the-trail XQ, give in the to business it. the question of of you you the remarks

that? there's of it Given that And that items? you be steer us to months out ago, relates anything might to you if guys those kind kind curious about on as guys of might laid XX, you what's prompting the thinking just evaluating XX update to, maybe that

and we the operational Yes. to communicated John, our the relative financial XXXX, end year for XXXX. of Thanks, targets question. In fiscal of November

bit our changed November was investors think together of where helpful We'll probably investors dramatically our of XXXX, we'll to has especially, what we're So future. see analysts update it we you'll little of see I And from longer-range earnings with and updated you'll the since long-range on of during and refreshed marketplace range. and that best you, trying those and long-range were to so we'll work given further We guidance purposes an operational think especially our call, it probably terms the financial X-year felt that. targets. a targets. to set Candidly, time a be time to March talk 'XX set we the business during were in targets a in assumptions. formally XXXX have longer little we of in be to about do call. And that the some for was And won't fiscal probably modeling and out head can organic based just

So stay tuned. in update you an give March. We'll

from is line with question next of David Morningstar. Whiston come our the And going to

I mentioned place? back systems. that how is at or how this is much -- that upgrades, product new go a and Basically, Is you much you ERP. more just I wanted some you incremental or internal And out, side to high the about think, X, you multiyear Mike, first just a have and your product-focused And customer-focused very of bit spending. mean, the level, doing going to SG&A ERP buckets could talk for of side. the in a little I of X laid if the years. in terms it I'm is very some curious just ongoing to upgrade internal the of the guys the been more more

quickly. here ERP real about talk I'll

we the systems the around are get are of system have balance the some will that short those of we have say asset of X obviously X competitive that of next making is is and impact SG&A we months light time there's inherited relatively that on areas: moderate have balanced. we it's ERP future. probably over relative term, The upgrades to probably the had figures and other investment But long investments in we end probably We and to Winnebago-branded -- But the enterprise around project. be about continue of the to XX the to digital other functions there. to to incremental evenly what definitely basis from planned. now XX acquisitions some -- time. And And businesses the X business the IT in we've an the annual to terms thing systems I working do project our the do our the won't through an specifics, to particularly SG&A -- would historically think here and brands. I here probably next to ERP right those into for is at on. a the tunnel engineering, we're finish we've the there prepare And we

so quarters. figures But out that adding annualized here. as it's of an we we're being can incremental X basis obviously, the across, those disciplined on spreading spending we're each obviously and of And we're as

business turn we as market tougher Now we those the will well. conditions, faces if on as can dial the

areas. reasonable so be very investments going everybody and in as prudent just those So make we to are we knows,

to capital discussed would earlier, X between buybacks be you And or just if priority back a fiscal those 'XX? say can in M&A allocation going

the seen the off we've that speaking, continues broadly past to M&A I of cure over guess years. guess, I dislocation the environment, couple

the peak, in sell As a you to find peak sell both prices, hit space that very really hard then companies and sellers that to and buyers price It's wanted just you agree with want can view. to companies then appreciate, our a trough at can that high off forward and on to.

the I the clearer I'd us view hopefully some in make think year additional to as right ahead of we'll to environments, investments area. normalization what multiple certain weigh on see and retail better we M&A start to see some and some get targets and be would that say, a to pay, allow

success some of over So share we on, repurchases share X, is on bigger front. the years. can that some we've the had X execute past targets function M&A our clearly Without repurchase a elevated

to is to continue goal prioritize growth. Our

still to inorganic the talked Mike We're case. That's going prioritize investments. well of of investments. just as historically. organic that growth form those stated some both as in about have We the

our mechanism the the We'll M&A. great in as use of cash priority. of to share repurchase shareholders returning continue absence that So be to a will

remarks. the now to for turn conference to And over Ray Posadas I would like closing back

us. Enjoy Thank is We That season. our end joining call. all holiday have your safe Thank for day. the you, the of rest you earnings everyone, of first quarter a you. happy hope and

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

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