This week, only Thor Industries (THO) reported results.
Thor Industries (THO) - Revenues were $2 billion and adjusted per-share earnings were $0.67, up substantially from a year ago due to the February 2019 acquisition of Europe-based Erwin Hymer Group (EHG). Revenues were about 9% ahead of estimates while earnings were about 6% below.
North American revenues increased by 6% from a year ago. The backlog increased by 19%. Industry conditions appear to be improving as dealer inventories approach a more normal level after a glut in recent years. Thor is generally holding their market share although this has been a challenge for them. Gross margins in both the towables and motorized divisions improved from a year ago.
European revenues were $637 million, which produced a 12.5% gross margin.
The company-wide gross margin was 12.8%, up from 11.0% a year ago. The integration of EHG continues to make progress.
Thor Industries hasn’t had any shutdowns of its production facilities, nor any meaningful impact on its dealer orders or retail sales as a result of the coronavirus, as of its March 9th conference call. Lower interest rates and lower gasoline prices, combined with perhaps some incrementally higher demand if consumers lean toward more camping/recreational vehicle travel compared to airlines/cruise ships/hotels, could help strengthen demand. A recession would likely reduce demand.
We retain our Buy rating on Thor Industries (THO) with a $98 price target.