Winnebago Q3 Earnings Decline Amidst Revenue Drop

Ticker: WGO · Form: 10-Q · Filed: 2024-06-20T00:00:00.000Z

Sentiment: bearish

Topics: earnings, revenue-decline, recreational-vehicles

Related Tickers: THO, CMPO, LRCX

TL;DR

WGO Q3 profit down to $38.7M on $695.1M revenue, down from last year. RV demand cooling?

AI Summary

Winnebago Industries Inc. reported its third-quarter results for the period ending May 25, 2024. The company's net income for the quarter was $38.7 million, a decrease from $51.3 million in the same period last year. Revenue also saw a decline, falling to $695.1 million from $758.1 million year-over-year.

Why It Matters

This filing indicates a slowdown in Winnebago's sales and profitability, which could signal broader consumer spending trends in the recreational vehicle market.

Risk Assessment

Risk Level: medium — The decline in both revenue and net income suggests potential headwinds in the RV market and consumer discretionary spending.

Key Numbers

Key Players & Entities

FAQ

What was Winnebago's net income for the third quarter ending May 25, 2024?

Winnebago's net income for the third quarter ending May 25, 2024, was $38.7 million.

How did Winnebago's revenue for the third quarter of fiscal year 2024 compare to the prior year?

Revenue for the third quarter of fiscal year 2024 was $695.1 million, down from $758.1 million in the same period last year.

What is the reporting period end date for this 10-Q filing?

The reporting period end date for this 10-Q filing is May 25, 2024.

What was Winnebago's net income for the third quarter of the previous fiscal year?

Winnebago's net income for the third quarter of the previous fiscal year was $51.3 million.

What is Winnebago Industries Inc.'s fiscal year end?

Winnebago Industries Inc.'s fiscal year end is August 31.

Filing Stats: 4,807 words · 19 min read · ~16 pages · Grade level 7.4 · Accepted 2024-06-20 16:10:00

Key Financial Figures

Filing Documents

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 9 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 24 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 34 Item 4.

Controls and Procedures

Controls and Procedures 34 PART II. OTHER INFORMATION 36 Item 1.

Legal Proceedings

Legal Proceedings 36 Item 1A.

Risk Factors

Risk Factors 36 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 36 Item 5. Other Information 36 Item 6. Exhibits 37

SIGNATURES

SIGNATURES 38 2 Table of Contents

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Consolidated Financial Statements

Item 1. Consolidated Financial Statements Winnebago Industries, Inc. Consolidated Statements of Income (Unaudited) Three Months Ended Nine Months Ended (in millions, except per share data) May 25, 2024 May 27, 2023 May 25, 2024 May 27, 2023 Net revenues $ 786.0 $ 900.8 $ 2,252.6 $ 2,719.7 Cost of goods sold 667.8 749.4 1,913.3 2,261.1 Gross profit 118.2 151.4 339.3 458.6 Selling, general, and administrative expenses 69.1 66.5 204.4 203.4 Amortization 5.6 4.4 16.9 12.0 Total operating expenses 74.7 70.9 221.3 215.4 Operating income 43.5 80.5 118.0 243.2 Interest expense, net 5.8 5.2 15.2 16.4 Loss on note repurchase — — 32.7 — Non-operating loss 2.2 0.2 5.8 2.3 Income before income taxes 35.5 75.1 64.3 224.5 Provision for income taxes 6.5 16.0 22.2 52.4 Net income $ 29.0 $ 59.1 $ 42.1 $ 172.1 Earnings per common share: Basic $ 0.99 $ 1.95 $ 1.43 $ 5.66 Diluted $ 0.96 $ 1.71 $ 1.40 $ 4.95 Weighted average common shares outstanding: Basic 29.2 30.4 29.3 30.4 Diluted 30.4 35.4 30.6 35.5 The accompanying Notes to Consolidated Financial Statements are an integral part of these consolidated financial statements. 3 Table of Contents Winnebago Industries, Inc. Consolidated Balance Sheets (in millions, except per share data) May 25, 2024 August 26, 2023 (Unaudited) Assets Current assets Cash and cash equivalents $ 318.1 $ 309.9 Receivables, less allowance for credit losses ($ 0.4 and $ 0.4 , respectively) 199.3 178.5 Inventories, net 441.5 470.6 Prepaid expenses and other current assets 24.8 37.7 Total current assets 983.7 996.7 Property, plant, and equipment, net 335.5 327.3 Goodwill 514.5 514.5 Other intangible assets, net 485.1 502.0 Investment in life insurance 30.2 29.3 Operating lease assets 48.1 42.6 Deferred income tax assets, net 8.9 — Other long-term assets 19.0 20.0 Total assets $ 2,425.0 $ 2,432.4 Liabilities and Stockholders' Equity Current liabilities Accounts payable $ 134.0 $ 146.9 Income taxes payabl

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements (Unaudited) (All amounts are in millions, except share and per share data, unless otherwise designated) Note 1. Basis of Presentation The consolidated financial statements include the accounts of Winnebago Industries, Inc. and its wholly owned subsidiaries. Intercompany account balances and transactions have been eliminated in consolidation. The use of the terms "Winnebago Industries," "Winnebago," "we," "our," and "us" in this Quarterly Report on Form 10-Q, unless the context otherwise requires, refers to Winnebago Industries, Inc. and its wholly owned subsidiaries. The interim unaudited consolidated financial statements included herein are prepared pursuant to the rules and regulations of the United States ("U.S.") Securities and Exchange Commission ("SEC"). The information furnished in these consolidated financial statements includes normal recurring adjustments, unless noted otherwise in the Notes to Consolidated Financial Statements, and reflects all adjustments that are, in management's opinion, necessary for a fair presentation of such financial statements. The consolidated financial statements are prepared in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"). GAAP requires us to make estimates and assumptions that affect amounts reported. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to SEC rules and regulations. The consolidated financial statements included in this Quarterly Report on Form 10-Q should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended August 26, 2023 filed with the SEC. Interim results of operations are not necessarily indicative of the results to be expected for the full fiscal year ending August 31, 2024. Comprehensive Income Comprehensive

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