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Winnebago (WGO -9.5%) is trading lower following its Q3 (May) report this morning. The RV manufacturer, which produces both towables and motorhomes, reported EPS slightly above analyst expectations, while revenue came roughly in-line.

The company already provided Q3 guidance on June 5, as such, these results were largely anticipated. We suspect investor focus shifted to the remainder of FY25 and any early reads on FY26. Unfortunately, WGO lowered FY25 EPS guidance pretty substantially. Perhaps just as troubling, analysts had asked questions about FY26, but management denied to provide specifics, prompting a negative reaction in the stock.

• WGO continues to see the macroeconomic uncertainty weighing on consumer sentiment and the dealer network. This echoes commentary we heard from industry peer Thor Industries (THO) earlier in June. The sentiment from both companies is that this is a challenging period for the RV industry as a whole.
• WGO's disappointing numbers are more pronounced on the motorhome side, with 2HFY25 revenues expected to be significantly lower. Motorhome RV volume in Q3 declined 14.8% yr/yr and shipments 8.7% yr/yr. WGO cited market conditions and dealers reducing excess inventory.
• In response, WGO is aligning production to demand, reducing field inventory, and reevaluating its manufacturing footprint, which is expected to have a more meaningful impact in FY26.
• It is important to note that WGO did see some relative strength in its marine segment with revenue up 15%. WGO expects its marine segment to show continued momentum. Investors are likely pleased to see the marine segment mitigate problems on the RV side.

Overall, it's clear the RV industry remains in a downturn. Investors who have been hoping for a light at the end of the tunnel look like they have to wait a little longer. WGO reiterated what we heard from THO earlier in June, that it is going to take some time for the market to turnaround. We suspect investors are going to want to see at least some stabilization in the industry before buying back in.