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Are the good times over for Winnebago Industries, Inc. (WGO - Free Report) ? This Zacks Rank #5 (Strong Sell) is expected to see falling earnings in Fiscal 2023 after it was a pandemic winner the last 2 years.
Winnebago makes outdoor lifestyle products, including motorhomes, travel trailers, fifth-wheel products, pontoons, inboard/outboard and sterndrive powerboats and commercial community outreach vehicles under various brands including Winnebago, Grand Design, Chris-Craft, Newmar and Barletta.
Winnebago has facilities in Iowa, Indiana, Minnesota and Florida.
Another Beat in the Fiscal Second Quarter
On Mar 23, Winnebago reported its fiscal second quarter results and beat on the Zacks Consensus Estimate by $0.08. Earnings were $3.14 compared to the Zacks Consensus Estimate of $3.06.
It has beat on earnings 8 quarters in a row and has missed only twice in the last 5 years. That's an incredible earnings surprise record given the pandemic.
Revenue rose 38.7% compared to the prior year to $1.2 billion, which matched the record level of the first quarter. Excluding the recently acquired Barletta, revenue was $1.1 billion, up 29.4% year-over-year and 73.3% over the same period of Fiscal 2020, as demand remained strong and the company raised prices.
Gross profit margin was 18.6%, which was equal to the prior quarter, and was driven primarily by pricing ahead of the known and anticipated cost input inflation, and operating leverage, offset by production inefficiencies due to supply constraints.
The company also had record sales results at recent RV and Marine trade shows which indicates the continued strength in demand.
Analysts Lower Fiscal 2023 Earnings Estimates
Winnebago was a pandemic winner as Americans took to the outdoors when the pandemic hit. Many on Wall Street believed the surge in demand would be over by now. But they have been wrong about demand.
Winnebago is expected to see Fiscal 2022 earnings growth of 45% year-over-year to $12.51 from $8.55 in fiscal 2021.
But analysts expect the slowdown to hit in fiscal 2023, as 2 have lowered their estimates in the last month. The Zacks Consensus Estimate has fallen to $9.15 from $10.01 during that time.
That's an earnings decline of 26.3%.
Will the analysts get the slowdown "right" this time?
Shares are Dirt Cheap
Winnebago shares soared during the pandemic but in 2022, they have fallen 34%. That's considerably worse than the S&P 500 which is down 13.8% over the same time period.
Image Source: Zacks Investment Research
Winnebago shares are now dirt cheap. It trades with a forward P/E of just 3.9.
Winnebago is shareholder friendly and currently pays a dividend, yielding 1.5%.
But investors might want to wait for more clarification on fiscal 2023's earnings outlook before diving in. Shares might not be as cheap as they appear if earnings actually do slide.
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Bear of the Day: Winnebago (WGO)
Are the good times over for Winnebago Industries, Inc. (WGO - Free Report) ? This Zacks Rank #5 (Strong Sell) is expected to see falling earnings in Fiscal 2023 after it was a pandemic winner the last 2 years.
Winnebago makes outdoor lifestyle products, including motorhomes, travel trailers, fifth-wheel products, pontoons, inboard/outboard and sterndrive powerboats and commercial community outreach vehicles under various brands including Winnebago, Grand Design, Chris-Craft, Newmar and Barletta.
Winnebago has facilities in Iowa, Indiana, Minnesota and Florida.
Another Beat in the Fiscal Second Quarter
On Mar 23, Winnebago reported its fiscal second quarter results and beat on the Zacks Consensus Estimate by $0.08. Earnings were $3.14 compared to the Zacks Consensus Estimate of $3.06.
It has beat on earnings 8 quarters in a row and has missed only twice in the last 5 years. That's an incredible earnings surprise record given the pandemic.
Revenue rose 38.7% compared to the prior year to $1.2 billion, which matched the record level of the first quarter. Excluding the recently acquired Barletta, revenue was $1.1 billion, up 29.4% year-over-year and 73.3% over the same period of Fiscal 2020, as demand remained strong and the company raised prices.
Gross profit margin was 18.6%, which was equal to the prior quarter, and was driven primarily by pricing ahead of the known and anticipated cost input inflation, and operating leverage, offset by production inefficiencies due to supply constraints.
The company also had record sales results at recent RV and Marine trade shows which indicates the continued strength in demand.
Analysts Lower Fiscal 2023 Earnings Estimates
Winnebago was a pandemic winner as Americans took to the outdoors when the pandemic hit. Many on Wall Street believed the surge in demand would be over by now. But they have been wrong about demand.
Winnebago is expected to see Fiscal 2022 earnings growth of 45% year-over-year to $12.51 from $8.55 in fiscal 2021.
But analysts expect the slowdown to hit in fiscal 2023, as 2 have lowered their estimates in the last month. The Zacks Consensus Estimate has fallen to $9.15 from $10.01 during that time.
That's an earnings decline of 26.3%.
Will the analysts get the slowdown "right" this time?
Shares are Dirt Cheap
Winnebago shares soared during the pandemic but in 2022, they have fallen 34%. That's considerably worse than the S&P 500 which is down 13.8% over the same time period.
Image Source: Zacks Investment Research
Winnebago shares are now dirt cheap. It trades with a forward P/E of just 3.9.
Winnebago is shareholder friendly and currently pays a dividend, yielding 1.5%.
But investors might want to wait for more clarification on fiscal 2023's earnings outlook before diving in. Shares might not be as cheap as they appear if earnings actually do slide.