THO - Thor Industries trims full-year sales outlook despite Q3 earnings beat

2023-06-06 06:59:39 ET

Thor Industries ( NYSE: THO ) tempered full-year for revenue forecast on Tuesday even after topping Q3 expectations by a comfortable margin.

For the third quarter report, the Indiana-based RV manufacturer notched GAAP EPS of $2.24, double the analyst expectation. Meanwhile, a 37% decline in revenue year over year was not as steep as the Street consensus had projected . Consolidated gross profit margin for the third quarter was 14.8%, down 250 basis points as compared to the prior year quarter.

“Market conditions continue to be challenging as dealers and consumers face increasing pressures from the macro environment. In this difficult setting, we remain focused on executing our business model that enables us to quickly adapt to market conditions,” CEO Bob Martin said. “Consequently, our performance during the fiscal third quarter was solid relative to broader market conditions.”

That said, he moved to temper expectations for the quarter ahead and thus the full fiscal year. Management noted that still-bloated inventories remain an overhang in particular.

“While we are encouraged by our fiscal third quarter results, we anticipate certain macroeconomic challenges to persist in the near-term,” Martin warned.

He explained that efforts to “lower overall channel inventory levels” will be beneficial in the long-term, but will hit fourth quarter performance. The company now expects consolidated net sales in the range of $10.5B to $11B, down from a prior guide of $10.5B to $11.5B and suggesting downside to the $10.96B Street consensus.

However, the company hiked its gross profit margin guidance to a range of 13.8% to 14.2%, narrowed from a prior 13.4% to 14.2% outlook. The lower end of guidance for diluted earnings per share was raised as well. The company now sees EPS in a range from $5.80 to $6.50 as compared to a previous guide of $5.50 to $6.50. The updated figure is well above the $5.48 analyst consensus, marking a contrast to the reeled-in revenue expectations.

Shares of Thor Industries edged upward on very light volume after the earnings announcement .

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