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Thor (THO) Declines 4.3% Since Posting Q1 Earnings Beat

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Thor Industries, Inc.’s (THO - Free Report) shares have slipped 4.3% since the announcement of first-quarter fiscal 2022 (ended Oct 31, 2021) results on Dec 8, before the opening bell. Although the recreational vehicle (RV) maker delivered a comprehensive beat and recorded massive year-over-year growth in earnings, sales and backlog, investors are likely disappointed with the muted outlook, especially for the European RVs segment. Thor expects continued supply chain constraints, logistical challenges and cost pressures to limit gross margins of the unit, going forward.

Thor posted adjusted earnings of $4.34 per share, which beat the Zacks Consensus Estimate of $3.10. This outperformance can be attributed to higher-than-anticipated revenues across North American Towable and Motorized RVs segments. The bottom line jumped 111.7% from the year-ago profit of $2.05 per share. The company registered revenues of $3,958.2 million for the quarter under review, topping the Zacks Consensus Estimate of $3,397 million. The top line recorded a 56% year-over-year increase.

Thor Industries, Inc. Price, Consensus and EPS Surprise

Thor Industries, Inc. Price, Consensus and EPS Surprise

Thor Industries, Inc. price-consensus-eps-surprise-chart | Thor Industries, Inc. Quote

Segmental Results

North American Towable RVsRevenues from the segment came in at $2,240.8 million, surging 61% year over year on the back of robust shipments and benefits from the Tiffin Group buyout. The top line also surpassed the Zacks Consensus Estimate of $1,750 million. Pretax profit totaled $266.3 million, up from $141.2 million recorded in the year-ago period, thanks to higher sales and improved gross profit margins. At quarter-end, the unit’s total backlog was $10.4 billion, skyrocketing from $4.4 billion as of Oct 31, 2020.

North American Motorized RVsRevenues from the segment totaled $925 million, which soared 87.3% year over year, thanks to higher unit sales and the Tiffin Group buyout benefits. The top line also outpaced the consensus mark of $799 million. Pretax profit came in at $88.9 million, up from $41.6 million recorded in the year-ago period. Backlog in the segment summed $4.3 billion, jumping from $2.2 billion as of Oct 31, 2020.

European RVs: Revenues from the segment came in at $633 million, up 5.1% from the year-ago period driven by higher unit shipments and a favorable product mix. The top line, however, missed the consensus mark of $663 million. The segment incurred a pretax loss of $18 million, wider than the year-ago loss of $5.5 million. Backlog of the segment was $3.3 billion, reflecting growth from $2.3 billion recorded on Oct 31, 2020.

Financials and Consolidated Backlog

As of Oct 31, 2021, Thor had cash and cash equivalents of $339.3 million, and long-term debt of $2,232.3 million. Consolidated backlog as of quarter-end was $18.07 billion, reflecting a year-over-year rise of 100%. Thor currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Top-Ranked RV Stocks to Tap On

If you are interested to invest in the RV space, consider betting on Winnebago Industries (WGO - Free Report) , LCI Industries (LCII - Free Report) and Cavco Industries (CVCO - Free Report) , each flaunting a Zacks Rank #1.

Winnebago: Winnebago Industries is a leading producer of recreational vehicles and marine products sold throughout the United States and Canada. It also makes other specialty commercial vehicles tailored for specific requirements, such as law enforcement command centers, mobile medical clinics and mobile office space.

Winnebago has an expected earnings and sales growth rate of 9.9% and 16%, respectively, for the current fiscal year. WGO beat the Zacks Consensus Estimate for earnings in the last four quarters, with an average of 42.3%.

LCI Industries: LCI Industries is a supplier of components to the recreational vehicle and manufactured housing industries as well as adjacent industries including bus, cargo and equestrian trailer, marine, and heavy truck.

LCI Industries has an expected earnings and sales growth rate of 68% and 57%, respectively, for the current year. LCII beat the Zacks Consensus Estimate for earnings in three of the last four quarters and missed once, with an average surprise of 10.1%.

Cavco: Cavco is one of the largest producers of manufactured homes in the United States and a leading producer of park model RVs, vacation cabins, and systems-built commercial structures.

Cavco has an expected earnings and sales growth rate of 66.2% and 37%, respectively, for the current fiscal year. CVCO beat the Zacks Consensus Estimate for earnings in the last four quarters, with an average of 30.5%.