LCI Industries (NYSE: LCII) Interim CEO John Sirpilla said the expanded profitability reported for the company’s second quarter gives him “great confidence” for the future. Sirpilla shared that statement during the August 5 earnings call with investors, which followed the report’s release.
“Our 2026 performance has been driven first and foremost by our self-help initiatives,” Sirpilla said. “Through disciplined operational efficiencies and strategic cost reduction actions, we structurally improved our cost base and expanded net margins despite a challenging wholesale RV production environment and continued retail softness.
“Although I have been in the interim CEO role for only 2 months, I have served on LCI’s Board for more than 7 years. My first priority when taking the CEO role was to spend time with our dedicated team members, supply chain partners and valued customers.
“Those conversations have left me more impressed than ever by our team’s commitment to supplying outdoor recreation, transportation, and housing markets with a broad array of highly engineered quality products and related services at affordable prices.
“I am energized by the opportunities ahead and by the appreciation expressed for the value LCI delivers every day across the dynamic markets we serve. It is an incredible honor to serve in my new capacity, working alongside trusted colleagues while leading such an impressive organization.”
The call was also Sirpilla’s chance to share his approach to leadership, as he has only been in the role of Interim CEO for two months (see: Jason Lippert Announces Retirement; Sirpilla is Interim CEO for RVBusiness’ previous reporting).
“I come to my new role as a builder, not just a caretaker,” Sirpilla said. “My four proven, yet simple, guiding principles are: curiosity, alignment, accountability and gratitude. I intend to apply each of those as we move through this transition.”
But this was not Sirpilla’s first call.
“Less than 2 months ago, my first investor call for LCI was to announce the proposed merger with Patrick Industries,” he said. “As we continue to spend time with Patrick’s leadership team, our enthusiasm and confidence continue to build around the meaningful long-term value and opportunities the merger will unlock.
“We are excited about the compelling strategic and financial rationale for the proposed merger. Together, we expect to create a broader, more innovative product platform and cost-effectively bring more products within reach of outdoor recreation consumers. But for the time being, until the transaction closes, it remains business as usual at LCI.”
What follows is an edited account of the rest of the conference call with investment analysts.
Do you expect a rise in demand for aftermarket products?
John Sirpilla: We believe that we might. I have been in the industry for a long time, and I am very accustomed to where the aftermarket side can drive sales. It can also drive continued interest in the use of vehicles for our customers in the outdoor recreation space. We have worked to ensure our new distribution center footprint will be able to further service anyone in the aftermarket space so we can quickly deliver goods to customers who want them for their vehicles.
What can you share about expectations of end market driving increased aftermarket net sales?
JS: We have put considerable focus on aftermarket upgrades and made innovation a key lane for our business. The team continues to put out products that give those consumers products they would like as upgrades for their coaches. The upgrade is an opportunity to further enhance their enjoyment of the RV lifestyle.
Will there be additional AEPA refund pass-through in the second half of the year?
Yes, there will likely be some continued receipts. But with the accounting treatment that we’ve chosen, we have already accounted for everything that we expect to receive. So from a cash basis, it really is that as the tariff cash comes in, we’ll get that back to our customers on the pass-through as we’ve talked about. But from an accounting perspective, we have fully accounted for anticipated tariff activity in the second quarter financials.
What are the biggest factors currently impacting demand, and how do you think the industry is managing it?
Chief Financial Officer Lillian Etzkorn: There is the tail on the adjustment from when the market was flooded during COVID. Right now, the industry is improving in managing supply. When you look out in the marketplace today and see at the dealer level, 18 to 20 weeks of inventory in the field, we think that’s really responsible at this time of the year.
It’s putting them in a really good position in the back half of the year for them to see what’s going to happen here at Open House, which happens towards the end of September, and then be in a better position to stock up for Q1 and Q2 of 2027.
Will you update your retail expectation for calendar year 2026?
LE: We expect it to be higher than the wholesale. Dealers are telling us they are looking to continue to keep their inventories at a healthy range, and they are not planning to replenish unit for unit with retail.
Do you have any sense for where model year ’27 pricing is going to trend on a like-for-life unit basis?
JS: I think you are going to see it up just a bit, which does not surprise us. However, there has been good mitigation to the best of everyone’s ability.
What can you share about the international markets?
JS: Overall, our team in Europe is performing well. I think we are continuing to see steady growth. But there is the same softness there as we are seeing in North America, however it is not at the magnitude we are seeing in the United States.
Is there any profitability or sales difference when you compare sales related to a used RV unit moving to a new owner versus existing owners that are investing in their current unit and performing maintenance?
JS: There is always a good opportunity when somebody buys a used coach, because they might be investing in that unit in a way the previous owner did not. We like when people with that kind of enthusiasm come into the market. There is a better price point opportunity for them when they are buying used. Those buyers often want to upgrade and change flaws in the coach the previous owner may have been willing to accept. That is the space we enjoy. If we keep them enthused, we can keep them in the market.
