Thor Industries has reported an unforeseen financial setback for its fiscal second quarter, revealing a net loss despite initially positive projections in a complex market landscape. As the recreational vehicle manufacturer grapples with a series of operational challenges, it has adjusted its full-year earnings forecast downward, now predicting earnings between $3.30 and $4 per share for fiscal 2025.
This marks a significant revision from the earlier guidance of $4 to $5 per share. Furthermore, sales are projected to range from $9 billion to $9.5 billion, also reflecting a pullback from the previous estimate of $9.8 billion. Current consensus from FactSet suggests that GAAP earnings per share (EPS) will be approximately $4.34, with sales estimated at $9.44 billion for the ongoing fiscal year. Throughout the first half of fiscal 2025, Thor's sales have remained in line with its forecasts, yet the pressure on profit margins has exceeded internal expectations.
Chief Operating Officer Todd Woelfer highlighted that much of this margin pressure stems from the difficult conditions evident within the North American motorized market and the European sector. Woelfer conveyed a cautiously optimistic outlook, stating, "We still expect that the retail market will begin trending more positively as we progress through the remainder of our fiscal 2025." The company is adopting a conservative stance for the remainder of the current year, reflecting on recent declines in consumer confidence alongside uncertainties in the market exacerbated by tariff implications, according to Chief Executive Bob Martin.
“We remain confident in our ability to navigate this uncertain market environment while continuing to position Thor for future success,” Martin noted. In premarket trading, shares of Thor Industries witnessed a drop of 5.5%, reflecting investor sentiments amid the company's cautious announcements.
For the three-month period ending January, Thor reported a net loss of $0.01 per share compared to a profit of $0.13 in the same period the previous year, falling short of analyst expectations for GAAP earnings of $0.07 per share. Sales also took a hit, declining by 8.6% year-over-year to reach $2.02 billion, although this figure did surpass the average estimate of $1.98 billion. Despite a challenging environment, North American towable RV sales saw a 13% increase, reaching $828.3 million, driven by a significant 28% rise in unit shipments.
However, this was slightly offset by a 14% decrease in pricing per unit. In contrast, revenue from motorized RVs in North America slumped by 22% to $446.3 million, correlating with a substantial drop in unit shipments of around 21%. Moreover, European RV sales fell to $612.5 million from $782.3 million, reflecting a staggering 28% decrease in shipments. "While the RV market has experienced an extended downturn, our focus has remained on prudently managing through the downturn by working with our vendor and dealer partners to improve what we build for retail customers," Woelfer reiterated.
He further stated that as the fiscal year progresses, substantial structural changes and brand rationalization announcements are expected, aimed at enhancing profit margins across operating segments. The gross profit margin narrowed by 20 basis points year over year to 12.1%, a result of initiatives taken to strengthen partnerships with key dealers.
Additionally, selling, general, and administrative expenses were reduced to $206.2 million from $220.1 million in the previous year’s quarter..