Editor’s Note: The following “Motley Fool” column offers a look at Thor Industries Inc. and its continued growth and strong earnings performance. For the full story click here.
According to a forecast published by the Recreational Vehicle Industry Association (RVIA), shipments of RVs by manufacturers are expected to grow nearly 4% during 2013. This may not seem like a big increase, but it follows two straight years of very strong growth.
Drivers of this growth include the desire to experience nature and outdoor activities while sharing these experiences with family members. RV enthusiasts also save money on their trips compared to other forms of travel and lodging. A study by PKF in 2011 showed that a family of four in an RV can save 23% to 59% on trips, even including the cost of owning the vehicle and fuel.
Today we’ll look at Thor Industries Inc. , which is the leader in the RV manufacturing industry in North America. We’ll also look at close competitor Forest River Inc., owned by Berkshire Hathaway, and Winnebago Industries Inc., which is much smaller in terms of unit sales but just as mighty as Thor in terms of brand recognition.
Industry leadership as shown by the numbers
Thor manufactures both towable RVs that are pulled by another vehicle and motorized RVs that have their own engines. The company is No. 2 in travel trailer sales, No. 1 in fifth-wheel sales (which anchor to the back of a truck bed rather than being pulled by a trailer hitch), and No. 2 in motorhome sales, where it is clearly gaining strength.
Thor’s excellent performance isn’t just a recent thing. The company has been profitable every year since it began operations in 1980. The RV market is highly cyclical and Thor has been able to weather down times and still remain profitable.
Since the RV industry bottomed out from the Great Recession in 2009, Thor’s wholesale unit sales have grown at a CAGR of 15.2%. In its motorized segment, the CAGR was an even more spectacular 26%.
For the full story click here.