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Winnebago Industries Inc. doesn’t anticipate the softness in the Class A motorhome market to get better before spring.
That was the main thrust of Winnebago executives’ conference call with stock analysts Thursday (Dec. 14). For their part, Winnebago officials stressed that the company’s main goal is to stay “solidly profitable.”
“We are encouraged by the stability of fuel prices and the pause in the interest rates by the Federal Reserve,” said Bruce Hertzke, Winnebago chairman and CEO. “At this time, however, we see no clear sign of a change in the motorhome buying patterns of our consumers, and expect continued softness through (the end of February). We continue to believe in the long-term growth of our industry and for Winnebago Industries.”
The conference call came on the heels of Winnebago reporting lower earnings and revenues for its fiscal 2007 first quarter that ended Nov. 25.
The Forest City, Iowa-based motorhome builder reported first quarter net income of $7.98 million compared to $14.6 million a year ago, while sales dropped 13% to $201.8 million from $232.3 million.
Winnebago President Ed Barker said that Winnebago raised prices on Nov. 1 because of the increased costs of steel, fiberglass and other commodities.
Hertzke and Barker said earnings were down in part because of the company’s increased focus on lower-margin Class C motorhomes – a sector where Winnebago’s market share grew to 25.6% through October compared to 20.2% in 2005 – and new entry-level Class A’s that also generate lower margins.
“The market has shifted, particularly on the Class A side, to lower-priced products,” Barker said, noting that mid- to high-priced buyers are “sitting on the sidelines right now. We think that is temporary.”
Barker declined to provide sales figures from the recent 44th Annual National RV Trade Show in Louisville, Ky., but Hertzke said sales at the show were “pretty decent.”