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Is Thor's (THO) Beat Streak Likely to Continue in Q3 Earnings?

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Thor Industries (THO - Free Report) is scheduled to release third-quarter fiscal 2022 results on Jun 8, before the opening bell. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings per share and revenues is pegged at $4.97 and $4.17 billion, respectively.

The Zacks Consensus Estimate for Thor’s fiscal third-quarter earnings per share has been revised upward by 26 cents in the past 30 days. The bottom-line projection implies a year-over-year uptick of 51.1%. The Zacks Consensus Estimate for revenues also suggests a year-over-year rise of 20.7%.

The Indiana-based largest manufacturer of recreational vehicles (RVs) in the world posted better-than-expected earnings in the last reported quarter on higher-than-anticipated revenues across North American Towable and Motorized RVs segments.

The company surpassed the Zacks Consensus Estimate in the trailing four quarters, the average being 40.5%. This is depicted in the graph below:

Thor Industries, Inc. Price and EPS Surprise

Thor Industries, Inc. Price and EPS Surprise

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

Earnings Whispers

Our proven model predicts an earnings beat for Thor for the to-be-reported quarter, as it has the right combination of the two key ingredients. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

Earnings ESP: Thor has an Earnings ESP of +2.48%. This is because the Most Accurate Estimate is pegged 12 cents above the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Thor carries a Zacks Rank of 3 currently. You can see the complete list of today’s Zacks #1 Rank stocks here.

Factors at Play

Demand for RVs continues because of safe travel enthusiasts and millennials’ zeal for off-the-grid living, resulting in massive order backlogs for companies like Thor. The sustained inclination of people to opt for RVs to go camping around the country or enjoy a vacation is anticipated to have boosted the demand for Thor’s products during the to-be-reported quarter.

The Zacks Consensus Estimate for third-quarter fiscal 2022 revenues from the North American Motorized RVs segment is pegged at $986 million, indicating a significant rise from $775 million recorded in the year-ago period. The consensus mark for revenues from the North American Towable RVs unit is $2,263 million, implying a year-over-year increase of 31.1%. Thor’s quarterly revenues from these two segments are expected to have been buoyed by the TiffinHomes buyout.

While supply-chain snarls, tight labor market and high commodity might have raised fiscal third-quarter 2022 cost of sales, gross margins are likely to have gotten a boost from the increasing average price of RVs along with high unit sales. Consequently, the consensus mark for gross profits from North America Towable and Motorized units are pegged at $415 million and $157 million, implying an increase of 57.2% and 63.5%, respectively, on a year-over-year basis.

However, the consensus mark for revenues from the European RV segment is $870 million, indicating a decrease from $894.2 million registered in the year-ago period. Also, the consensus mark for gross profit of the segment is pegged at $114 million, suggesting a decline from $120 million recorded in the year-ago quarter. Supply constraints and shortage of various RV components are more conspicuous in Thor’s European segment, which could have somewhat limited the overall revenues.

Predictions for Peers

REV Group (REVG - Free Report) : Our proven model does not conclusively predict an earnings beat for REV Group this time around. The company has an Earnings ESP of 0.00% and a Zacks Rank #5 (Strong Sell). The company is set to report fiscal second-quarter 2022 earnings tomorrow.

The Zacks Consensus Estimate for REVG’s to-be-reported quarter’s earnings and revenues is pegged at 27 cents per share and $609.7 million, respectively. REV Group surpassed earnings estimates in three of the last four quarters and missed once, with the average being 29.7%.

Winnebago Industries (WGO - Free Report) : Our proven model does not conclusively predict an earnings beat for Winnebago this time around. The company has an Earnings ESP of -1.27% and a Zacks Rank #5. The company is expected to report fiscal third-quarter 2022 earnings later this month.

The Zacks Consensus Estimate for WGO’s to-be-reported quarter’s earnings and revenues is pegged at $3.01 per share and $1.20 billion, respectively. Winnebago surpassed earnings estimates in the last four quarters, with an average of 27.1%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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