Fleetwood Enterprises Inc. reported its earnings for the quarter that will end April 30 would be below stock market analysts’ expectations.
Slower RV and manufactured housing sales are the reasons the company’s earnings will be below expectations for the February-through-April period, according to Fleetwood President Nelson Potter.
“Consumer demand for recreational vehicles has been robust in recent months but the rate of growth has been slowing,” Potter reports. “We have observed some regional pockets of softening demand and have already adjusted our production schedules and shipping rates accordingly to avoid building potential excess retail inventory.
“We believe that RV retail inventories have now reached levels commensurate with consumer demand, which means that our factory shipments going forward will depend entirely on retail sales,” Potter said.
The unfavorable developments are largely concentrated in Fleetwood’s motorhome business, where Potter said profit margins are under pressure due to the composition of its product mix. “Overall, Fleetwood motorhome retail sales in the fiscal fourth quarter (ending April 30) have been fairly comparable to the prior-year period,” Potter added.
Fleetwood’s earnings during the February-through-April period will fall to around 30% to 40% below Wall Street’s consensus estimate of 52 cents per diluted share, Potter said.