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Fleetwood Enterprises Inc. reported that preliminary sales for its second quarter, ended Oct. 29, dropped 16% versus last year, as demand for recreational vehicles and manufactured housing remained soft.
The Riverside, Calif., builder said motorhome sales were hurt by concerns over fuel prices and interest rates while travel trailer revenues compared with prior year sales that were boosted by disaster relief efforts.
Revenues for the quarter were approximately $528 million compared with $630 million in last year’s second quarter. Sales of temporary housing for disaster relief efforts in the second quarter of the prior fiscal year were $60 million, evenly divided between the RV Group and the Housing Group.
In its preliminary report, Fleetwood also warned of a wider operating loss in the quarter due to “lower overall sales and expenses related to continued operational changes, combined with labor inefficiencies in our travel trailer division.”
Recreational vehicle sales for the second quarter were approximately $365 million versus $393 million a year ago. Motorhome sales declined 7% to $230 million and travel trailer sales were down 12% at $105 million while folding camping trailer revenues were up 18% to $30 million.
“As expected, motorhome sales were impacted by concerns over fuel prices and interest rates, although we are encouraged by more stable trends in both,” said Elden L. Smith, president and CEO. “If these trends continue through the winter, we believe that prospects for the upcoming spring selling season will improve considerably. We are also encouraged by the performance of our ’07 motorhome product lineup, and expect that our products will fully participate in any market resurgence.
“The decline in travel trailer revenues was created by last year’s $30 million in emergency living units,” Smith continued. “Prior year sales also included a significant number of conventional units that were used in disaster relief efforts, although the precise amount is impossible to accurately quantify.”
Smith reported that the company’s 2007 lines had been well received and that travel trailer sales increased 25% during the recent RV show in Pomona, Calif.
Fleetwood cited a “financing driven slump” that had tightened the manufactured housing sector and pulled down sales.
Fleetwood expects to announce its full results for the second quarter on Dec. 7, and will hold a conference call to discuss the results at 1:30 EST the same day.