Motorhome manufacturer Winnebago Industries Inc., plans to increase prices on its 2005 units by 1.5% to 2%, Senior Vice President and CFO Ed Barker said during a conference call with investment analysts last week.
Despite sharp increases in the prices of many of the materials used for building RVs, Winnebago does not plan to increase prices on 2004 units it will build during the next few months, although the company does pass chassis price increases on to its dealers as they occur, Barker said.
Winnebago negotiates prices with its suppliers that are fixed for a period of time and the company follows “ a pricing philosophy that builds inflationary costs into our pricing at the beginning of the (model) year,” Barker said.
“We’ve seen certain commodity prices, most notably steel and aluminum, go up, but those commodities, in terms of the total product content are pretty small,” he said.
Additionally, Winnebago plans a product recall that will cost the company 3 cents per share of common stock, or about $1 million, Chairman, President and CEO Bruce Hertzke told the financial community last Thursday (March 18).
Winnebago will provide more details to its dealers soon and, meanwhile, it will work with one of its suppliers concerning the recall.
The $1 million recall-related expense was included as a cost for Winnebago’s second fiscal quarter, which ended on Feb. 28. Despite the expense, Winnebago’s net earnings during the December-through-February period amounted to $15.9 million.