Winnebago Industries, Inc. (WGO) Q4 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call summary and Q&A indicate mixed signals: strong operational performance and improved leverage, but reduced fiscal 2025 guidance and tariff challenges. Positive factors include margin improvement and shareholder returns, but market share pressures and flat retail expectations limit growth optimism. The market cap suggests moderate sensitivity, leading to a neutral stock price prediction.
Key Financial Performance
Net Revenues $777.3 million, with momentum across brands and product lines offsetting operating margin pressure from the ongoing turnaround at Winnebago-branded businesses.
Adjusted Diluted Earnings Per Share (EPS) $0.71, up 2.5x from the prior year fourth quarter, driven by higher revenues and improved operational efficiencies.
Consolidated Adjusted EBITDA Increased 33.1% year-over-year, reflecting higher revenues and operational improvements.
Towable RV Segment Revenue Slightly down year-over-year due to a mix shift toward value-oriented consumers, but operating income margin increased by 210 basis points due to targeted price increases and improved efficiencies.
Motorhome RV Segment Revenue Double-digit growth driven by higher unit volume and favorable mix, partially offset by higher discounts and allowances.
Marine Segment Revenue Double-digit growth year-over-year, driven by higher unit volume and targeted price increases, despite soft trends in the marine industry.
Cash from Operations $181.4 million in Q4, driven by reduced accounts receivable and inventories.
Net Leverage Ratio Improved to 3.1 at the end of the year from 4.8 at the end of the third quarter, supported by strong cash flow and EBITDA growth.
Shareholder Returns $88.9 million returned in fiscal 2025, including $50 million in share repurchases and $38.9 million in dividends.
Debt Repayment $159 million repaid during fiscal 2025, contributing to improved leverage metrics.
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Operating Highlights
Newmar's Class A Summit Aire and Grand Design's Lineage Series M: These motorized RV products are driving growth, with the Lineage Series M gaining momentum in the Class C diesel category.
Grand Design Transcend series: This affordable towable RV is resonating with new consumers to the RV lifestyle.
Barletta's Aria: This product is performing strongly in the Marine segment, representing affordable luxury in the aluminum pontoon segment.
RV retail registrations and wholesale shipments: Retail registrations declined in August, but wholesale shipments are expected to range between 320,000 to 340,000 units for calendar 2025 and 315,000 to 345,000 units for calendar 2026.
Marine segment market share: Barletta increased its market share by 20 basis points to 9% over the trailing 12 months.
Operational efficiency initiatives: Efforts include manufacturing optimization, vertical integration, capacity utilization, sourcing coordination, quality improvement, and working capital management.
Footprint consolidation: Winnebago closed 2 of its 4 motorhome manufacturing locations in Northern Iowa to improve operational efficiency.
Tariff mitigation strategies: Proactive strategies include supplier engagement, reassessing sourcing, and diversifying supply routes.
Revitalization of Winnebago-branded businesses: Focused on new product introductions, stronger dealer partnerships, and operational efficiency improvements.
Grand Design Motorhomes expansion: The Lineage lineup is expected to drive growth and capture market share.
Marine segment strategy: Barletta and Chris-Craft are focusing on inventory management, dealer relationships, and premium customer experiences.
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Risk or Challenges
Market Conditions: RV retail registrations declined in August, and while retail demand remained stable on a trailing 3-month basis, monthly results were variable. Dealers are expected to remain selective in restocking, which could impact channel stability in the off-season.
Operational Efficiency: The ongoing transformation of the Winnebago-branded businesses has led to costs that impacted gross margins. Additionally, the company had to close 2 of its 4 Winnebago Motorhome manufacturing locations in Northern Iowa, which negatively affected operating income and yield.
Supply Chain and Tariffs: The company faces ongoing tariff challenges and has had to implement mitigation strategies, including diversifying supply routes and redesigning bills of materials. The potential for new tariffs, such as the 100% additional tariffs related to rare earth mineral restrictions, poses a risk.
Marine Segment Performance: The marine industry continues to show soft trends, which could negatively impact the performance of the company's Marine segment.
Economic Uncertainty: Macroeconomic factors, including shifts in consumer preferences and competitive dynamics, could influence overall demand for the company's products.
Strategic Execution Risks: The company is undergoing significant operational changes, including footprint optimization and workforce alignment, which carry execution risks. Additionally, the success of new product introductions and dealer partnerships is critical to achieving growth targets.
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Guidance & Outlook
RV Wholesale Shipments: Winnebago expects wholesale RV shipments in the range of 320,000 to 340,000 units for calendar 2025, with a median of 330,000 units. For calendar 2026, the company estimates wholesale RV shipments of 315,000 to 345,000 units.
Fiscal 2026 Revenue and Earnings Guidance: Winnebago projects consolidated net revenues in the range of $2.75 billion to $2.95 billion for fiscal 2026. Reported earnings per diluted share are expected to be between $1.25 and $1.95, while adjusted earnings per diluted share are projected to range from $2 to $2.70.
Motorhome RV Segment Growth: The company anticipates healthy growth in the Motorhome RV segment, driven by the success of the Grand Design RV Motorhomes expanded Lineage lineup, which has seen strong dealer and consumer demand.
Towable RV Segment Growth: Winnebago expects flat to modest low single-digit growth in the Towable RV segment for fiscal 2026.
Marine Segment Performance: The Marine segment is expected to experience a decline in sales due to continuing soft retail trends in the market.
Margin Improvement Initiatives: Winnebago plans to deliver meaningful annualized cost savings through operational actions such as footprint optimization, supply chain enhancements, and strategic workforce alignment. Operating income margin in the Motorhome RV segment is expected to improve to low single digits in fiscal 2026 from negative 0.6% in fiscal 2025.
Capital Allocation: The company aims to achieve a net leverage ratio of approximately 2x by the end of fiscal 2026.
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Shareholder Return Plan
Dividends Paid: $38.9 million in dividends were paid in fiscal 2025.
Quarterly Dividend: A $0.35 per share cash dividend was paid on September 24, marking the 45th consecutive quarterly dividend payment.
Share Repurchases: $50 million was spent on share repurchases in fiscal 2025.
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Key Q&A
Q:Can you talk about how much or where the unmitigated portion of tariffs is? Is it at the lower end of your guidance?
A:The guidance includes the full anticipated impact of tariffs for the next 12 months. Management did not provide a specific number for tariffs but mentioned that the tariff environment is dynamic, and they are working on mitigating the exposure through pricing actions and other measures.
Q:Can you provide more granular guidance for modeling purposes, especially for the first half versus the back half of the year?
A:Fiscal '26 is expected to be back-half loaded in terms of profit generation, with improvement anticipated in the first half compared to the previous year. Each quarter is expected to show year-over-year improvement.
Q:What are your assumptions for retail for '25 and '26?
A:Retail for '26 is expected to be flat, while '25 saw more destocking than anticipated. Management does not expect significant dealer inventory increases in '26, with the RV industry wholesale and retail expected to be around 330,000 units.
Q:Do you expect material growth in wholesale if retail is flat in 2026?
A:Management anticipates a 1:1 wholesale-to-retail ratio for 2026, with no significant dealer destocking. They aim for 2x inventory turns in their businesses and expect the RV industry to stabilize at around 330,000 units for wholesale and retail.
Q:What are your views on market share trends for your brand, especially with the trend towards low-end RV units?
A:Market share pressure has been noted in Class B motorhomes and fifth-wheel towables due to increased competition and price point shifts. Management plans to stabilize and grow market share in fiscal '26 through new product launches and strategies.
Q:How does the RV consumer compare to the Marine consumer today?
A:The RV consumer is younger and more diversified, while the Marine consumer is older and more hesitant. Marine dealers are more focused on destocking compared to RV dealers.
Q:How much visibility do you have into cost improvements for motorhome margins in fiscal '26?
A:Management has good visibility into cost improvements, with many actions already taken in Q4 of fiscal '25. Improvements are expected from reduced incentives and better product positioning.
Q:Do you still think 425,000-450,000 units is a good mid-cycle estimate for the RV industry?
A:Management now estimates the RV mid-cycle volume to be lower, around 400,000-425,000 units, due to the prolonged down cycle and potentially lower peaks in the future.
Q:What were the takeaways from the RV open house, and how did it factor into the '26 outlook?
A:The open house showed strong dealer engagement and order activity, especially for Grand Design and Winnebago brands. Retail trends remain similar to recent months, with no significant changes in momentum.
Q:Are you expecting any specific or incremental chassis impact from the most recent tariffs on medium-duty trucks?
A:No specific or incremental chassis impact from the recent tariffs is expected at this point.
Q:What are your ASP expectations for the upcoming year by segment category?
A:Motorhome ASPs are expected to improve due to reduced incentives. Towables may see pricing increases offset by a mix shift towards affordability. Marine ASPs may face negative mix impacts but will be partially offset by modest pricing.
Q:How should we think about warranty expenses in FY '26 relative to '25?
A:Warranty expenses are expected to remain consistent with no major changes anticipated. Improvements are noted in motorhomes, while slightly elevated expenses are expected in towables and marine segments.
Q:Review of Unclear Management Responses
A:Management avoided providing specific numbers for the impact of tariffs and retail assumptions for the remaining months of 2025, citing the difficulty in forecasting due to market variability. They also did not provide a detailed mid-cycle model update but mentioned it is being worked on.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Aire Grand
Aria definition
Barletta Chris
Barletta history
Barletta product
CFO Slide
China factor
Chris Craft
Design Transcend
Lineage Series
Lineage lineup
Transcend series
Winnebago business
account
brand Class
confidence
customer
dealer channel
efficiency Winnebago
engagement
enhancement
goodwill
impairment
improvement cost
improvement leverage
income margin
margin improvement
motorhomes
optimization
policy
product dealer
ratio end
saving
segment Marine
stability
trade
trailing month
transformation Winnebago
unit calendar
update
volume leverage
WGO Transcript
Winnebago Industries, Inc. (WGO) Q1 2026 Earnings Call Transcript
Positive12-19
The earnings call summary indicates strong financial metrics, particularly in the Motorhome RV segment, with optimistic guidance and operational improvements. The Q&A section further supports this with management's focus on market share growth, disciplined pricing, and margin improvement initiatives. While there are some challenges, such as soft Marine sales and tariff risks, the overall sentiment is positive, driven by strategic growth areas and cost management. The market cap suggests moderate volatility, leading to a predicted positive stock price movement of 2% to 8%.
Winnebago Industries, Inc. (WGO) Q4 2025 Earnings Call Transcript
Unknown10-22
The earnings call summary and Q&A indicate mixed signals: strong operational performance and improved leverage, but reduced fiscal 2025 guidance and tariff challenges. Positive factors include margin improvement and shareholder returns, but market share pressures and flat retail expectations limit growth optimism. The market cap suggests moderate sensitivity, leading to a neutral stock price prediction.
Winnebago Industries, Inc. (WGO) Q3 2025 Earnings Call Transcript
Unknown6-25
The earnings call summary presents a mixed picture with some positive developments, like product innovation and market share growth in certain segments. However, the Q&A section reveals significant concerns, such as declining profitability, lack of specific guidance, tariff-related risks, and a tempered market outlook. The reduction in EPS guidance and revenue forecast further contribute to a negative sentiment. Despite efforts to manage inventory and improve operational efficiency, the overall sentiment leans negative due to these uncertainties and challenges.
Earnings call transcript: Winnebago Q2 2025 sees stock surge on EPS beat
Unknown3-27
The earnings call shows mixed results: modest revenue growth in the Towable RV segment but a decline in Motorhome RV revenues. Gross margin declined YoY but improved sequentially. The company is actively repurchasing shares and maintaining dividends, which is positive for shareholder returns. However, the net debt to EBITDA ratio is high, and warranty expenses are increasing. Q&A reveals management's reluctance to provide specifics on tariffs and inventory, indicating uncertainty. The market cap suggests less volatility, leading to a neutral stock price prediction.
WGO Slides
WGO Report
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