Thor Industries (THO) is down 11% despite reporting record second quarter results.
Second quarter net income per share rose 45% to $1.23 while revenue rose 63% to $1.6 billion. Strong growth was a combination of organic growth as well as the inclusion of results from the Jayco acquisition.
Towable RV sales were $1.08 billion for the second quarter, up 55.0% from $698.3 million in the prior-year period. Jayco contributed $294.1 million to towable sales, while the towable growth excluding the acquisition was 12.9%, driven primarily by strength in smaller, more affordably priced travel trailers.
Motorized RV sales were $475.0 million for the second quarter, up 95.6% from $242.9 million in the prior-year second quarter. The increase in motorized RV sales was a result of continued strong growth in the more moderately priced gas Class A and Class C motorhomes, which have been well received by dealers and consumers. Motorized revenues also benefited from the inclusion of Jayco's motorized revenues of $137.2 million.
The company's backlog rose 89% to $2.09 billion.
"The second quarter marked another period of growth for Thor, as we experienced a positive start to the spring retail show season around the country," said Bob Martin, Thor President and CEO. "Growing demand from new consumers broadening our market has continued, with younger families increasingly buying more affordably priced travel trailers and smaller motorhomes. These positive trends give us confidence that Thor and the industry will outpace volumes achieved in 2016, which was the best year of wholesale RV shipments since the 1970s."
"We continue to expect double-digit growth in revenues and improvements in earnings throughout fiscal 2017. Industry growth dynamics should continue as consumers remain optimistic about future economic conditions and new consumers continue to enter the RV market. We also expect a strong contribution to sales and earnings from the inclusion of a full year's results from Jayco's operations. Given our increased production to meet demand in the seasonally slower first half of the fiscal year, we may see lower sequential and year-over-year growth rates in the second half of the year."
It seems that the stock was due for a pullback and some consolidation. THO was trading at $90/share before last quarter's blow out results in late November and in the $50s one year ago.
The stock has given up its 50-day moving averages near above the $105 level today.
Thor's retail RV market share is ~47%. The company has a ~$5.4 billion market capitalization and trades at ~10x enterprise value over EBITDA for fiscal 2017.
Smaller competitor Winnebago (WGO -6%) has a $1 billion market cap and trades at a similar EV/EBITDA multiple.