Fleetwood Enterprises Inc. executives had forecasted that the company would report a loss for the November-through-January period, but today (Jan. 30) they said the loss will be greater than they had suggested.
Additionally, President and CEO Ed Caudill said the company’s return to profitability during the February-through-April period, its fourth fiscal quarter, “is now in doubt.”
The caution recently shown by RV dealers in ordering new product and the continuation of challenges impacting Fleetwood’s manufactured housing business are the reasons for the less upbeat outlook.
“As previously announced, the company expects to lose money in the third (fiscal) quarter, but short-term uncertainty in the RV market and the continued deterioration in manufactured housing finance have exacerbated the seasonal negatives,” Caudill reported today. “Consequently, we expect to announce a greater-than-anticipated loss when our (full financial) results are released in about five weeks, and our previous expectation that we would return to profitability in the fourth (fiscal) quarter is now in doubt.”
During Fleetwood’s second fiscal quarter, which ended Oct. 27, Fleetwood posted net earnings of $4.6 million, its first quarterly profit in nine consecutive quarters.
During the six months ended Oct. 27, Fleetwood was in the black $3.1 million.
However, Caudill said today the rate of growth of Fleetwood’s RV Group slowed during its third fiscal quarter while “the manufactured housing industry is facing the most difficult financing environment in its history.”
Fleetwood’s RV sales revenue grew by 11% during the November-through-January period, which represents a slowdown from the 28% growth in Fleetwood RV sales experienced in the nine-month period that ended Sunday (Jan. 26).
Meanwhile, Fleetwood’s Manufactured Housing Group experienced a 27% decline in sales revenue in the three months ended Jan. 26 and a 21% decline in the nine months ended Jan. 26.