Thor (THO) Q4 Earnings Beat on European RVs Unit Strength
Recreational vehicle (RV) maker Thor Industries THO delivered adjusted earnings of $1.68 per share for fourth-quarter fiscal 2023, which surpassed the Zacks Consensus Estimate of 97 cents per share. This outperformance can be primarily attributed to better-than-expected results from the European RVs segment. The bottom line declined a massive 67.3% from the year-ago profit of $5.15 per share. The company registered revenues of $2,738 million for the quarter under review, outpacing the Zacks Consensus Estimate of $2,457 million. However, the top line declined 28.4% year over year.
As of Jul 31, 2023, Thor had cash and cash equivalents of $441.2 million and long-term debt of $1,291.3 million. THO currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Segmental Results
North American Towable RVs: Revenues from the segment came in at $930.6 million, down 48.2% year over year due to a decrease in unit shipments resulting from soft dealer and consumer demand. The top line also fell short of our estimate of $942.4 million. Gross profit totaled $110.7 million, declining 59.4% year over year amid higher manufacturing overhead costs and warranty expenses. Pretax income totaled $55.6 million, down from $181.6 million recorded in the year-ago period amid lower gross profit margins and reduced sales. The unit’s total backlog was $756 million at quarter-end, down sharply from $2.57 billion as of Jul 31, 2022.
North American Motorized RVs: Revenues from the segment totaled $656.1 million, which fell 36% year over year, owing to a decrease in unit shipments and net price per unit. The top line also lagged our forecast of $703 million. Gross profit totaled $56.4 million, dwindling 69.3% year over year amid higher material costs and an increase in sales discounts. Consequently, pretax profit came in at $21 million, tanking 83.5% from the year-ago period. The segment’s backlog was $1.24 billion, down from $3.43 billion as of Jul 31, 2022.
European RVs: Revenues from the segment came in at $1,019 million, up 26.3% from the year-ago period, thanks to higher shipments and an increase in price per unit. The top line also outpaced our projection of $546 million. Gross profit of $193.3 million rose 26.7% year over year on lower manufacturing overhead costs and higher sales. The segment reported a pretax income of $101.7 million, higher than the year-ago level of $74.8 million. The backlog of the segment was $3.55 billion, reflecting a rise from $2.75 billion recorded on Jul 31, 2022.
Fiscal 2024 Forecasts
Thor projects its full-year consolidated net sales in the range of $10.5-$11.0 billion. The consolidated gross profit margin is expected to be in the range of 14.5-15%. Earnings per share are now expected to be in the range of $6.25-$7.25.
Key Picks From the Auto Space
A few top-ranked stocks in the auto space include Gentex Corporation GNTX, Commercial Vehicle Group CVGI and Oshkosh Corporation OSK, each sporting a Zacks Rank #1.
The Zacks Consensus Estimate for GNTX’s 2023 sales and EPS implies year-over-year growth of 17.3% and 29.4%, respectively. The earnings estimate for 2023 has been revised upward by 7 cents in the past 60 days.
The Zacks Consensus Estimate for CVGI’s 2023 sales and EPS implies year-over-year growth of 4.05% and 102%, respectively. The earnings estimate for 2023 has been revised upward by 8 cents in the past 60 days.
The Zacks Consensus Estimate for OSK’s 2023 sales and EPS implies year-over-year growth of 15% and 125.7%, respectively. The earnings estimate for 2023 has been revised upward by $1.71 in the past 60 days.
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