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Winnebago (WGO) Earnings and Revenues Beat Estimates in Q4

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Winnebago Industries, Inc. (WGO - Free Report) reported earnings of $1.01 per share in the fourth quarter of fiscal 2019, beating the Zacks Consensus Estimate of 98 cents. The figure also grew from 94 cents a share in the year-ago quarter. Net income rose 7% year over year to $31.9 million. Earnings were positively impacted by an improved tax rate arising from the Tax Cuts and Jobs Act (TCJA).

Revenues in the reported quarter declined 1.1% year over year to $530.4 million. The figure beat the Zacks Consensus Estimate of $528.7 million.

Operating income in the quarter under review edged down 2% to $44.8 million. Gross profit declined to $83.2 million from $83.8 million a year ago.

Segment Results

Revenues at the Motorhome segment were down 12.2% year over year to $200.7 million. Adjusted EBITDA declined 18.9% year over year to $10.7 million.

Revenues at the Towable segment improved 6.3% year over year to $307 million. The upside was driven by pricing actions and strong organic deliveries across the Grand Design RV brand. Adjusted EBITDA was $42 million, slightly up from the prior-year quarter.

Financial Position

Winnebago had cash and cash equivalents of $37.4 million as of Aug 31, 2019, compared with $2.3 million as of Aug 25, 2018. As of August 31, 2019, the company had long-term debt of $245.4 million compared with $291.4 million as of Aug 25, 2018.

For fiscal 2019, the company’s cash flow from operations was $133.8 million, marking rise of 60.5% from fiscal 2018. The increase resulted from a year-over-year improvement in cash flow from changes in working capital.

Dividend Payment

Winnebago’s board approved a dividend payment of 11 cents per share for fourth-quarter fiscal 2019. The amount will be payable Sep 25 to shareholders of record as of Sep 11, 2019.

Key Developments

In sync with its commitment to build a diversified portfolio of iconic brands, the company announced that it acquired Newmar in mid-September. In fiscal 2019, Winnebago made significant progress in strengthening its core recreational vehicle business. Its venture into the marine industry also completed the first year successfully.

Zacks Rank & Stocks to Consider

Winnebago currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the Auto-Tires-Trucks sector are BRP Inc (DOOO - Free Report) and Sonic Automotive, Inc (SAH - Free Report) , currently sporting a Zacks Rank #1 (Strong Buy), and Asbury Automotive Group, Inc (ABG - Free Report) , carrying a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

BRP has an expected earnings growth rate of 18.4% for 2019. The company’s shares have gained 68.5% year to date.

Sonic Automotive has an estimated earnings growth rate of 32.7% for 2019. Its shares have gained 114.5% year to date.

Asbury Automotive has an estimated earnings growth rate of 10.3% for 2019. Its shares have gained 45% year to date.

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