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Will Winnebago's (WGO) Q3 Earnings Pull Off a Surprise?

Winnebago Industries WGO is scheduled to release third-quarter fiscal 2022 results on Jun 22, before the opening bell. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings per share and revenues is pegged at $3.01 and $1.2 billion, respectively.

The Zacks Consensus Estimate for Winnebago’s fiscal third-quarter earnings per share has been revised upward by 4 cents in the past 30 days. The bottom-line projection implies a year-over-year uptick of 39.4%. The Zacks Consensus Estimate for revenues also suggests a year-over-year rise of 25.4%.

One of the leading recreational vehicle (RV) manufacturers in the world, Winnebago posted better-than-expected earnings in the last reported quarter on higher-than-anticipated revenues from the Towable segment. The company surpassed the Zacks Consensus Estimate in the trailing four quarters, with the average being 27.1%. Investors are expecting WGO to pull off an earnings beat this time as well. Encouragingly, our model also predicts the same.

Factors Shaping Q3 Results

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 Winnebago’s products during the to-be-reported quarter.

The Zacks Consensus Estimate for the Towable segment revenues is pegged at $704 million, indicating year-over-year growth of 26.6%. Strong consumer demand for Grand Design and Winnebago’s product lines is likely to have driven revenues. The consensus estimate for the Motorhome segment revenues is pinned at $408 million, suggesting year-over-year growth of 6%. Additionally, the acquisition of Barletta has fortified Winnebago’s marine market foothold and augmented its revenue stream beyond RVs. The buyout is likely to have boosted the company’s top line during the to-be-reported quarter.

On the flip side, Winnebago is facing temporary hiccups owing to supply constraints and the shortage of various RV components. Rising commodity and operational costs might have also limited overall margins during the fiscal third quarter.

Earnings Whispers

Our proven model conclusively predicts an earnings beat for Winnebago for the to-be-reported quarter, as it has the right combination of two key ingredients. A 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: Winnebago has an Earnings ESP of +1.39%. This is because the Most Accurate Estimate is pegged at $3.05, 4 cents higher than 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: Winnebago currently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Snapshots of Peer Releases

Winnebago’s closest peer Thor Industries THO unveiled third-quarter fiscal 2022 results on Jun 8. The RV maker posted adjusted earnings of $6.32 per share, which beat the Zacks Consensus Estimate of $4.97. The bottom line jumped 92% from the year-ago profit of $3.29 per share. The company registered revenues of $4,657.5 million for the quarter under review, topping the Zacks Consensus Estimate of $4,173 million. The top line also recorded a 34.6% year-over-year increase.

As of Apr 30, 2022, Thor had cash and cash equivalents of $331.9 million and long-term debt of $1,983.6 million. The consolidated backlog as of quarter-end was $13.88 billion, reflecting a year-over-year decline of 3%. Thor currently carries a Zacks Rank #3.

REV Group REVG, a manufacturer of industry-leading specialty vehicles, posted fiscal second-quarter 2022 results on Jun 7. The company came out with quarterly earnings of 17 cents per share, missing the Zacks Consensus Estimate of 27 cents. The bottom line also compared unfavorably with earnings of 39 cents per share a year ago. Revenues of $576 million for the quarter ended April 2022 fell short of the Zacks Consensus Estimate of $605 million. The top line also deteriorated from $644 million recorded in the comparable year-ago period.  

As of Apr 30, 2022, REV Group had cash and cash equivalents of $5.9 million and long-term debt of $243 million. REVG forecasts fiscal 2022 net sales in the band of $2.25-$2.4 billion. Net income is envisioned in the range of $43-$62 million. Free cash flow is expected between $58 million and $70 million. REV Group currently carries a Zacks Rank #3.

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




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