Winnebago Industries Inc. has increased its output rate and scheduled overtime at its factories because the company believes “wholesale and retail sales have normalized,” according to Bruce Hertzke, chairman, president and CEO.
The motorhome manufacturer’s business experienced a positive turnaround during the fourth quarter of its fiscal year 2003, which ended on Aug. 30, because dealers “began stocking their shelves with new 2004 models,” toward the end of the June-through-August period, Hertzke said.
However, because of the slow start to the company’s fourth fiscal quarter, Winnebago’s sales revenue increased only 2.5% for the three months ended Aug. 30 to $225.7 million, compared with $220.1 million a year earlier.
Winnebago’s net earnings declined 27% during the June-through-August period to $12 million, compared with $16.4 million earned a year earlier. That was because of higher manufacturing costs because of lower production volumes at the beginning of the quarter, higher discounts, costs associated with ramping-up production at its new Charles City, Iowa, plant and the absence of the EuroVan Camper business, which was discontinued last year.
On a positive note, Hertzke said, “Our 2004 models have been well received by both our dealers and retail customers and our dealers have experienced increased traffic and retail sales at fall RV shows.”
For all of fiscal year 2003, Winnebago’s sales revenue increased 2.4% to $845.2 million, compared with $825.3 million in fiscal 2002. Net earnings declined 8.7% during the 12 months ended Aug. 30 to $49.9 million, compared with $54.7 million earned in fiscal 2002.
“We were very pleased with the results for the fiscal year, which started at a record pace in the first half of the (fiscal) year,” Hertzke said. “We experienced lower sales volume in the third quarter as a result of dealers choosing to trim inventory levels due to low consumer confidence levels, uncertainty about the war in Iraq and the coming model year changeover.
“It now appears that both wholesale and retail sales have normalized,” he said.