Is Winnebago Steering Toward A Turnaround? Analysts Are Split

Shares of Winnebago Industries Inc WGO remained under pressure on Monday, after the company reported a higher-than-expected loss for the first quarter.

Here are some key analyst takeaways.

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Roth Capital Partners: Winnebago reiterated the midpoint of its fiscal 2025 earnings guidance, Stember said in a note. The company indicated prospects of the RV (recreational vehicle) environment becoming brighter, with monthly improvements in trend from October into November and the first two weeks of December showing year-on-year growth, he added.

“While encouraging, we note that December tends to be among the lowest selling volume months of the year, so one should be careful in drawing conclusions at this time,” the analyst wrote. Although Winnebago would likely be “among the first OEMs to come out of the RV recession,” there are limited signs of a sustained retail recovery, he further stated.

BMO Capital Partners: The company reported an adjusted loss of 3 cents per share. That’s below Street expectations of 20 cents, and a contraction from the year-ago quarter’s 95 cents. Management indicated there were several “green shoots” heading into 2025, “with improving consumer confidence and an expectation of more interest rate cuts in 2025,” Thomas-Martin said.

Management added that post-election retail trends had been positive, which could support a turnaround in the second half of fiscal 2025, the analyst stated. “For Q2, management expects sales to be in line with Q1 with a modest improvement to profitability,” he further wrote.

Truist Securities: Although Winnebago missed its first-quarter results and announced a muted guidance for the second quarter, conversations with management suggest that “the tide may finally be turning,” Swartz said in a note. The company’s own internal registrations strengthened on a year-on-year basis in November) and the trend has carried into mid-December, he added.

“In addition to WGO’s greater production constraint (it undershipped the RV industry considerably in FY1Q), mngts’ upbeat retail commentary, evidenced market share gains and (hopefully) a bottoming of Motorized RV profitability in FY1Q is suggestive of a relatively stronger recovery curve over the coming 12-18 months,” the analyst further wrote.

Benchmark: The shortfall on the company’s bottom-line was driven by a decline in sales and margin contraction, Albanese said. This resulted from factors such as “the GD Motor startup, increased warranty expense and absorption de-leverage,” he added.

Management suggested that consumer confidence had improved. Retail sales had inflected positively for the first time in 40 months. Also, inventory was close to the one-to-one ratio, which “should relieve some pricing pressures,” the analyst stated. “WGO likes what it is seeing in its internal data through the end of the year,” he further wrote.

Price Action: Shares of Winnebago had declined by 1% to $49.47 at the time of publication on Monday.

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Image: Courtesy of Winnebago