Should Investors Sell Winnebago Ahead Of A Recession?
Winnebago (NYSE: WGO) reported a 1% decline in year-over-year sales and a nearly 2% decline in operating income. Quarterly revenues of $530 million still exceeded consensus estimates by $10 million. The company's towable segment expanded by 6.3% for the full fiscal year, but the motorhome segment suffered a 17.8% slump over the year and 12% for the fourth quarter. While these trends are troubling on the motorhome side, Winnebago was able to increase its market share in both segments.
Despite declining operating profits, Winnebago's net earnings per share actually rose 7% due to increased research and development tax credits. Analysts were expecting a 3% earnings decline, so these flat results were a favorable surprise. In a conference call, company management also alluded to improving sales mix from the towable segment driving margins higher. But investors who are looking further down the road would do well to consider how this company and the broader RV segment would perform in a recession.
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Source Fool.com
