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Thor (THO) to Retain Beat Streak in Q2 Earnings on RV Demand

Thor Industries THO is scheduled to release second-quarter fiscal 2022 results on Mar 9, before the opening bell. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings per share and revenues is pegged at $3.40 and $3.55 billion, respectively.

The Zacks Consensus Estimate for Thor’s fiscal second-quarter earnings per share has been revised upward by 1 cent in the past seven days. The bottom-line projection calls for a year-over-year uptick of 42.9%. The Zacks Consensus Estimate for revenues also suggests a year-over-year rise of 30.2%.

The Indiana-based largest manufacturer of recreational vehicles (RVs) in the world, Thor 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 42.4%. This is depicted in the graph below:

Thor Industries, Inc. Price and EPS Surprise

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

Investors are expecting the leading RV maker to pull off an earnings beat this time as well. Encouragingly our model also predicts the same.

Earnings Whispers

Our proven model predicts an earnings beat for Thor for the to-be-reported quarter, as it does have 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 +1.24%. This is because the Most Accurate Estimate is pegged 4 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

Despite the relaxation of travel restrictions and people getting fully vaccinated, the demand for campers, motorhomes and other recreational vehicles didn’t subside. Demand for RVs continued its momentum 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 second-quarter fiscal 2022 revenues from the North American Motorized RVs segment is pegged at $774 million, indicating a significant rise from $577 million recorded in the comparable year-ago period. The consensus mark for revenues from the North American Towable RVs unit is $1,712 million, implying a year-over-year increase of 25%. Thor’s quarterly revenues from these two segments are expected to have been buoyed by the TiffinHomes buyout. The acquisition of Erwin Hymer Group — which bolstered Thor’s position in Europe — is set to have aided revenues of the European RVs unit. The consensus mark for revenues from the European RV segment is $799 million, calling for an increase from $733.5 million registered in the comparable year-ago period.

While supply-chain snarls, tight labor market, and high commodity and SG&A costs might have clipped fiscal second-quarter 2022 margins to some extent, high demand for Thor’s offerings along with buyout synergies are likely to have offset the headwinds.

Predictions for Peers

Winnebago Industries WGO: Our proven model does not conclusively predict an earnings beat for Winnebago this time around. The company has an Earnings ESP of -2.88% and a Zacks Rank #3. The company is expected to report fiscal second-quarter 2022 earnings on Mar 23.

The Zacks Consensus Estimate for WGO’s to-be-reported quarter’s earnings and revenues is pegged at $3.06 per share and $1.1 billion, respectively. Winnebago surpassed earnings estimates in the last four quarters, with an average of 40%.

REV Group REVG: 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 #3. The company is set to report fiscal first-quarter 2022 earnings on Mar 9.

The Zacks Consensus Estimate for REVG’s to-be-reported quarter’s earnings and revenues is pegged at 12 cents per share and $525.7 million, respectively. REV Group surpassed earnings estimates in three of the last four quarters and missed once, with the average being 72.6%.

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


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