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Why Is Winnebago (WGO) Up 25.6% Since Last Earnings Report?

Zacks Equity Research
In the latest trading session, Walmart (WMT) closed at $111.11, marking a +0.72% move from the previous day.

It has been about a month since the last earnings report for Winnebago Industries (WGO). Shares have added about 25.6% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Winnebago due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Winnebago Earnings and Revenues Beat Estimates in Q2

Winnebago reported adjusted earnings of 60 cents per share in the second quarter of fiscal 2019 (ended Feb 23, 2019), beating the Zacks Consensus Estimate of 56 cents. In the year-ago period, earnings were 69 cents a share. Net income decreased 2.2% year over year to $21.6 million.

Revenues in the reported quarter declined 7.6% to $432.7 million from $468.4 million in the prior-year quarter. However, the figure outpaced the Zacks Consensus Estimate of $426 million.

Operating income in the quarter under review decreased 18% to $28.9 million from $35.3 million in the year-ago quarter. Gross profit declined to $66.4 million from $67.7 million a year ago.

Segment Results

Revenues at the Motorhome segment were down 17.3% from a year ago to $164.7 million. Adjusted EBITDA declined 23.4% to $4.4 million.

Revenues at the Towable segment fell 5.9% to $250.7 million year over year. Adjusted EBITDA was $33.6 million, down 7.3% from the prior-year quarter.

Financial Position

Winnebago had cash and cash equivalents of $3.02 million as of Feb 23, 2019, compared with $2.34 million as of Aug 25, 2018.

For the first six months of fiscal 2019, Winnebago’s cash flow from operations was $51.9 million compared with $36.9 million in the same period of fiscal 2018.
 

How Have Estimates Been Moving Since Then?

Fresh estimates followed a downward path over the past two months. The consensus estimate has shifted -8.33% due to these changes.

VGM Scores

At this time, Winnebago has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Winnebago has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.



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