Thor Industries reported first-quarter 2023 earnings that topped views early Wednesday but still fell sharply vs. a year earlier as demand for RVs appears to be retreating from pandemic highs. Thor stock edged lower Wednesday.
The company, which has its headquarters in Elkhart, Ind., sells both towable and motorhome-type RVs. It operates through the brand names Airstream, Heartland RV, Jayco and Livin Lite RV.
RV sales had been on a decade-long upward trend, but the coronavirus pandemic supercharged consumer interest. Americans, cautious of traveling in airplanes, packed into RVs and motor homes.
However, more than two years on, that interest appears to be decreasing.
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Thor Stock: Earnings
Estimates: Wall Street forecast the RV camper and emergency vehicle manufacturer earning $1.76 per share, a 59% drop vs. a year earlier, according to FactSet. Sales were expected to fall 26% to $2.89 billion.
Results: Thor earnings fell 42% vs. a year earlier to $2.53 a share. Revenue fell 21.5% to $3.11 billion.
Outlook: Thor sees fiscal 2023 EPS of $7.40-$8.70, with the $8.05 midpoint slightly below consensus. It expects full-year sales of $11.5 billion to $12.5 billion, with the midpoint above analyst targets.
Thor stock pared early gains, dropping 4.8% to 79.97 Wednesday during market trading. On Tuesday shares fell 1.40% to 83.88. THO shares are in a cup-with-handle base with a 93.24 buy point, according to MarketSmith analysis.
In Q4 2022, the company beat estimates, with EPS growing 25% to $5.15. Revenue edged up 6.4% to $3.82 billion.
In Thor Industries' 2022 fiscal year, earnings exploded 74% to $20.59 per share while sales shot up 32% to $16.31 billion.
RV Industry Demand Waning
There were a total of 32,652 RV shipments in October, a decrease of 43.7% compared to October 2021, according to the most recent numbers from the RV Industry Association. The industry association also reports that between January 2022-October 2022, RV shipments are down 12% compared to the same point last year.
"As we enter the holiday season, shipments of RVs continue to normalize from last year's record production," RV Industry Association CEO Craig Kirby said in a statement.
On Monday DA Davison analyst Brandon Rolle raised the firm's price target for Thor stock to 65 from 60. Rolle maintained an "underperform" rating on THO shares.
Rolle wrote there are likely to be production cuts across the RV industry in January 2023, coupled with decelerating retail demand. However, Rolle told investors in his research note he expects THO to top earnings views in the first quarter.
The fall in RV demand comes as diesel and gasoline prices are declining. Average U.S. gasoline prices on Wednesday were $3.35 per gallon, down around 11% from a month ago, according to the AAA gas price tracker. Meanwhile, U.S. diesel prices hovered on average around $5.03 per gallon Wednesday, also about a 11% drop from lost month, the AAA reports.
Thor stock has an 84 Composite Rating of 98. It has a 77 Relative Strength Rating, an exclusive IBD Stock Checkup gauge for share price movement. The EPS rating is 92.
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