Net Sales Of $2 Billion, But Supplier Questions Loom

Net Sales Of $2 Billion, But Supplier Questions Loom

Thor Industries, Inc. (NYSE: THO) announced results for the second quarter of fiscal 2020, which ended January 31, 2020.

“All key indicators for Thor Industries were strong in the second quarter,” said Bob Martin, President and CEO of Thor Industries.

  • Second-quarter net sales were $2.0 billion, up $712.6 million, or 55.2%, from the second quarter of fiscal 2019. This increase includes the addition of $637.1 million in net sales from the European RV segment and an increase of $102.3 million in net sales in the North American Towable RV segment, partially offset by a decrease of $27.8 million in net sales in the North American Motorized RV segment.
  • Consolidated gross profit margin was 12.8% for the second quarter of fiscal 2020, compared to 11.0% in the corresponding period a year ago. This reflects the positive impact of ongoing, management-led actions to reduce material and labor costs as a percentage of sales in both North American RV segments and the addition of 12.5% gross profit margin from the European RV segment.
  • Net income attributable to Thor and diluted earnings per share for the second quarter of fiscal 2020 were $28.7 million and $0.52, respectively, compared to a net loss and diluted loss per share of $(5.4) million and $(0.10), respectively, in the prior-year period.

 

Outlook

Bob Martin noted, “The last weeks have seen a sharp increase in the concern and market reaction related to the coronavirus and the effect it may have on individuals and communities impacted by the virus, supply chains – particularly for materials sourced from China or other areas that are facing increased infection rates, and on the domestic and global economies. This is a fast developing situation that we are monitoring on a daily basis. We are hopeful that the virus will be contained very quickly and that its impact on individuals will be minimized. In the meantime, in addition to monitoring the situation, we have put in place various action items, including travel limitations for the safety of our employees, and we are in frequent contact with our key vendors discussing availability of the component parts needed to meet our production schedules. We are also evaluating and arranging alternative supply sources for all critical parts which we deem to have potential supply concerns.

As of today:

  • We have not experienced any production shutdowns at any of our facilities in the U.S. or Europe as a result of the coronavirus.
  • We are monitoring our raw material availability closely and where needed, establishing alternative sources of supply.
  • We have not seen any reduction of dealer orders nor any negative impact on retail sales.
  • We do not expect the virus to delay the start-up of our newly announced Hymer USA facility.

Absent the uncertainties related to coronavirus, as we enter the peak selling quarters of our fiscal year in both North America and Europe, we are optimistic about our Company, our products and the global RV marketplace,” Bob Martin noted. “Our new Class B products from Thor Motor Coach, the Sequence and Tellaro, broaden our product line in the fast-growing Class B market and have been performing very well at retail. Dealer inventories, which were a concern last year, have largely rationalized and are now building ahead of the peak selling season. We have seen record attendance at several early-season RV consumer shows, in both North America and Europe. Also, Germany, which is Europe’s leading RV market, continues to report strong RV industry growth. We have delivered solid results for the first half of the fiscal year and, while we are still forecasting calendar 2020 North American retail sales to be flat to modestly down at this point in the selling season, we are also seeing signs of potential upside for the remainder of our fiscal year.”

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