Makers of recreational vehicles and mobile and manufactured homes fared well on Wall Street on Wednesday (Aug. 5), led by RV maker Thor Industries Inc. and by Drew Industries Inc., a maker of parts primarily used in travel trailers and fifth-wheel RVs, according to Investor’s Business Daily.
Thor climbed for 13 consecutive sessions through Wednesday, gaining 30% in July and 14% in August.
On Tuesday, the Ohio-based company said second-quarter earnings fell 92% to 4 cents, a full 60% below consensus views. Revenue dropped to $415.5 million, 41% below year-ago levels.
Despite the miss, the stock climbed 6% Tuesday and another 6% Wednesday in huge trade.
The trigger appears to have been a rising backlog of undelivered orders.
Thor’s total backlog rose 45% to $588 million by July 31, its highest level in two years.
Thor’s RV segment backlog was $298 million, up from $146 million a year ago.
The increase suggests RV dealers have worked through the bulk of an inventory reduction imposed by their lenders, primarily Bank of America and GE Capital, says analyst Bret Jordan with Avondale Partners.
That could mean increasing orders for manufacturers, Jordan says, but it doesn’t show an increase in consumer demand.
Drew, which reported July 31, saw second-quarter earnings drop 71%. That was 300% above analysts’ consensus views.
But the company says most of the surprise came from low-end, towable products, rather than its higher priced fifth-wheel RV lines.
“The RV category is not dead,” Jordan said, “but the consumer has sort of traded down.”