Thor Industries THO posted adjusted earnings for second quarter 2023 of 50 cents per share, which lagged the Zacks Consensus Estimate of $1.10 per share. This underperformance can be largely attributed to lower-than-anticipated revenues from the North American Towable RVs and North American Motorized RVs segments.
The bottom line declined massively by 89.5% from the year-ago profit of $4.79 per share. The company registered revenues of $2,347 million for the quarter under review, missing the Zacks Consensus Estimate of $2,531 million. The top line also declined 39.4% year over year.
Thor Industries, Inc. Price, Consensus and EPS Surprise
Thor Industries, Inc. price-consensus-eps-surprise-chart | Thor Industries, Inc. Quote
North American Towable RVs: Revenues from the segment came in at $830 million, down 58.2% year over year due to a decrease in unit shipments resulting from soft dealer and consumer demand. The top line also missed the Zacks Consensus Estimate of $1,120 million.
Gross profit totaled $52.9 million, declining 86% year over year. The pretax loss totaled $7,119 million, down from $275.9 million recorded in the year-ago period amid lower gross profit margins. The unit’s total backlog was $1.15 billion at quarter-end, down sharply from $10.4 billion as of Jan 31, 2022.
North American Motorized RVs: Revenues from the segment totaled $738.6 million, which fell 24.4% year over year, owing to a decrease in unit shipments. The top line also lagged the consensus mark of $1,040 million. Gross profit totaled $107.2 million, dwindling 31.4% year over year. Consequently, pretax profit came in at $61.5 million, declining 40.8% from the year-ago period. The segment’s backlog was $1.85 billion, down from $4.23 billion as of Jan 31, 2022.
European RVs: Revenues from the segment came in at $647 million, down 10.6% from the year-ago period. However, the top line outpaced the consensus mark of $547 million. Gross profit of $91.4 million, rising 1.4% year over year. The segment reported a pretax income of $12 million, higher than the year-ago level of $9.6 million. The backlog of the segment was $3,055 million, reflecting a rise from $3,051 million recorded on Jan 31, 2022.
As of Jan 31, 2023, Thor had cash and cash equivalents of $281.6 million and long-term debt of $1,758.5 million. During the second quarter of 2023, THO repurchased $25.4 million of common stock.
Revised Guidance for 2023
Thor revised its full-year guidance for fiscal 2023. Thor now projects its full year consolidated net sales in the range of $10.5-$11.5 billion, down from the range of $11.5-$12.5 billion estimated during the first quarter of 2023. The consolidated gross profit margin is now expected to be in the range of 13.4-14.2%, down from the range of 14.2-14.9%. Diluted earnings per share are now expected to be in the range of $5.50-$6.50, down from previously projected range of $7.40-$8.70.
Zacks Rank & Key Picks
THO currently carries a Zacks Rank #3 (Hold).
A few top-ranked players in the auto space include Mercedes-Benz Group AG MBGAF, Wabash National WNC and Modine Manufacturing MOD, all of which sport a Zacks Rank #1 (Strong Buy).
Mercedes-Benz develops, manufactures and sells passenger cars, including premium and luxury vehicles. The Zacks Consensus Estimate for MBGAF’s 2023 sales implies year-over-year growth of 4.02%.
Wabash is one of the leading manufacturers of semi-trailers in North America. The Zacks Consensus Estimate for WNC’s 2023 sales and earnings implies year-over-year growth of 13.06% and 24%, respectively.
Modine operates primarily in a single industry consisting of the manufacture and sale of heat transfer equipment. The Zacks Consensus Estimate for MOD’s 2023 sales and earnings implies year-over-year growth of 11.43% and 43.09%, respectively.
You can see the complete list of today’s Zacks #1 Rank stocks here.
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