It has been about a month since the last earnings report for Winnebago Industries (
WGO Quick Quote WGO - Free Report) . Shares have added about 7.1% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Winnebago due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Winnebago Maintains Its Earnings Beat Streak in Q4
Winnebago reported adjusted earnings of $3.02 per share in fourth-quarter fiscal 2022 (ended Aug 27, 2022). The bottom line topped the Zacks Consensus Estimate of $2.99 a share and rose 14% year over year. This outperformance can be attributed to higher-than-anticipated revenues and pre-tax income from the Motorhome and Marine segments. However, this recreational vehicle (RV) maker reported revenues of $1,179.1 million in the quarter under review, missing the Zacks Consensus Estimate of $1,197.3 million. Nonetheless, the top line grew 14% year over year.
Revenues in the Towable segment in the reported quarter fell 11.8% year over year to $494.2 million, primarily led by a decline in unit volume. The reported figure also missed the consensus mark of $647 million. The total deliveries from the segment came at 10,464 units, decreasing 33.2% year over year and missing the consensus metric of 17,171 units. Quarterly adjusted EBITDA declined 36.2% to $53.2 million, reflecting higher material and component costs and deleverage. The figure missed the consensus mark of $101 million. The segment’s backlog was $576.5 million (14,588 units), decreasing 66.2% due to normalized dealer inventories. The figure missed the consensus metric of $1,155 million.
In the reported quarter, revenues in the Motorhome segment improved 23.8% year over year to $555.8 million on strong unit sales and pricing actions. The revenues also outpaced the Zacks Consensus Estimate of $453 million. The total deliveries from the segment came at 3,291 units, increasing 10.9% year over year and crossing the consensus metric of 2,812 units. The segment recorded an EBITDA of $77.4 million, jumping 53.4% led by pricing actions and production efficiencies. The figure surpassed the consensus mark of $54 million. The backlog was $1,687.6 million (12,024 units), down 26.7% from the prior year on increased dealer inventories and missed the consensus mark of $3,549 million.
In the reported quarter, revenues in the Marine segment were $122.1 million, skyrocketing 631.9% year over year, largely driven by the Barletta buyout. The metric also topped the consensus mark of $100 million. The total deliveries from the segment came at 1,580 units, ballooning 1,803.6% year over year and surpassing the consensus metric of 1,371 units. The segment recorded an EBITDA of $17.5 million, shooting up 944.5% year over year and exceeding the consensus metric of $14.17 million. The backlog for the Marine segment was $314.7 million (3,595 units), soaring 169.2%.
Winnebago had cash and cash equivalents of $282.2 million as of Aug 27, 2022, down from $434.6 million on Aug 28, 2021. The long-term debt (excluding current maturities) increased to $545.9 million from $528.6 million recorded on Aug 28, 2021.
During the quarter under review, it approved a dividend of 27 cents a share, paid on Sep 28, 2022, to shareholders of record at the close of business on Sep 14, 2022. Also, during the reported quarter, Winnebago approved a new share buyback authorization of up to $350 million of the company’s common stock. The new buyback replaces the previous $200 million program that was fully depleted with $80.1 million share buyback completed in the fourth quarter of fiscal 2022. How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -22.78% due to these changes.
At this time, Winnebago has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Winnebago has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.