THO - Thor Industries stock slides on Q2 earnings miss downbeat demand forecast

2023-03-07 06:54:41 ET

Thor Industries ( NYSE: THO ) shares tumbled on Tuesday after the RV manufacturer missed the mark for its fiscal second quarter earnings and cut its full-year forecast.

The Indiana-based company reported $0.50 in earnings per share for the second quarter, less than half the consensus expectation. Meanwhile, a 39.4% drop in revenue from the prior year to $2.35B came in $140B below Street expectations. Gross profit margin of 12.1% for the quarter represented a 530 basis point drop from Q2 2022.

“During the quarter, we continued to proactively and decisively balance wholesale production with the pace of softening retail sales through the traditionally slower winter retail season. This commitment to a disciplined production approach, combined with a softer-than-expected order intake, resulted in second quarter North American wholesale shipments of 25,372 units,” CEO Bob Martin said. “Despite a significant slowdown of both sales and production, we expect the successful execution of our aggressive, proactive actions and our variable cost model to position our operating companies and independent dealer partners favorably heading into the second half of our fiscal 2023, which typically experiences stronger retail activity than our second quarter.”

Martin added that the company is seeing “a strong spring retail show season” with solid retail traffic. Nonetheless, he said that near-term demand is likely to be impacted by adverse macroeconomic conditions in 2023.

“While we are encouraged by these positive indicators, the current macroeconomic environment is still very dynamic. As a result, we have taken decisive steps to position our company to navigate the near-term softening market conditions,” Martin said.

For the full year, the company cut its revenue forecasts by $1B on the low and high end. The company now expects $10.5B to $11.5B from a prior $11.5B to $12.5B revenue guide, which also places the guidance below the $11.54B analyst consensus. Consolidated gross profit margin in the range of 13.4% to 14.2% reflects an update from the previously forecast 14.2% to 14.9% as well. Management now expects diluted earnings per share in the range of $5.50 to $6.50, down from a prior $7.40 to $8.70 guide and well below the consensus of $7.51.

Shares of Thor Industries ( THO ) slid 9.16% on thin volume before the bell on Tuesday.

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