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Thor (THO) Shares Dip Despite Q1 Earnings Beat on Glum '23 View

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Thor Industries (THO - Free Report) delivered mixed results for first-quarter fiscal 2023 (ended Oct 31, 2022). The recreational vehicle (RV) maker posted adjusted earnings of $2.53 per share, which surpassed the Zacks Consensus Estimate of $2.09. This outperformance can be largely attributed to higher-than-anticipated revenues from North American Motorized and European RVs segments. This marked the 11th straight earnings beat for Thor. The bottom line, however, declined from the year-ago profit of $4.34 per share. The company registered revenues of $3,108.1 million for the quarter under review, missing the Zacks Consensus Estimate of $3,117 million. The top line also fell 21.5% year over year.

Shares of Thor dropped around 5% yesterday to close the session at $79.95. Investors were seemingly discouraged by the dim fiscal 2023 outlook for sales and profits.

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 $1,317.8 million, plunging 41.2% year over year on the back of a decline in shipments. The top line also lagged the Zacks Consensus Estimate of $1,760 million. Gross profit totaled $195.8 million, down 52.1% year over year. Pretax profit totaled $111 million, down from $266.3 million recorded in the year-ago period amid lower gross profit margins and reduced sales.  At quarter-end, the unit’s total backlog was $1.57 billion, declining sharply from $10.4 billion as of Oct 31, 2021.

North American Motorized RVsRevenues from the segment totaled $1,123.5 million, which rose 21.5% year over year, thanks to higher unit sales and the Tiffin Group buyout benefits. The top line also outpaced the consensus mark of $1,036 million. Gross profit totaled $185.7 million, up 23.9% year over year. Consequently, pretax profit came in at $124.3 million, jumping from $88.9 million recorded in the year-ago period, thanks to higher sales and gross profit margins. Backlog in the segment was $2.86 billion, down from $4.27 billion as of Oct 31, 2021.

European RVs: Revenues from the segment came in at $504.3 million, down 20.3% from the year-ago period. The top line, however, beat the consensus mark of $450 million. Gross profit of $68.8 million inched up 2.1% year over year.  The segment incurred a pretax loss of $6.4 million, narrower than the year-ago level of $18 million. The backlog of the segment was $2.98 billion, reflecting a drop from $3.35 billion recorded on Oct 31, 2021.

Financials

As of Oct 31, 2022, Thor had cash and cash equivalents of $291.7 million and long-term debt of $1,714.6 million. During the fiscal first quarter, the company hiked its quarterly payout by 5%, marking the 13th straight year of dividend increase. During the quarter under review, Thor — currently carrying a Zacks Rank #4 (Sell) — bought back 338,733 shares worth $25.4 million, at an average price of $75.01.

You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.

Guidance

Thor expects fiscal 2023 net sales in the band of $11.5-$12.5 billion, implying a decline from $16.31 billion recorded in fiscal 2022. The gross profit margin is expected in the range of 14.2-14.9%. Earnings per share are envisioned to be between $7.40 and $8.70, suggesting a sharp contraction from $20.59 in fiscal 2022.

Earnings Whispers for Peers

REV Group (REVG - Free Report) has an Earnings ESP of 0.00% and a Zacks Rank #3. The stock is slated to report fiscal fourth-quarter 2022 earnings on Dec 14.

The Zacks Consensus Estimate for REV Group’s to-be-reported quarter’s earnings and revenues is pegged at 26 cents per share and $598 million, respectively. REVG surpassed earnings estimates in two of the last four quarters for as many misses, with the average negative surprise being 5.3%.

Winnebago Industries (WGO - Free Report) has an Earnings ESP of +6.56% and a Zacks Rank #4. The stock is scheduled to post fourth-quarter fiscal 2022 on Dec 16.

The Zacks Consensus Estimate for Winnebago’s to-be-reported quarter’s earnings and revenues is pegged at $1.83 per share and $899 million, respectively. Encouragingly, WGO surpassed earnings estimates in each of the trailing four quarters, with the average surprise being 23.5%.


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