A recreational vehicle manufacturer in northern Iowa is reporting weaker-than-anticipated results for the second quarter. Forest City-based Winnebago Industries reports revenue climbed by 2.5-percent when compared to last year to $234.5 million, but analysts were projecting a profit of $253.3 million.
Winnebago CEO Randy Potts dismisses the projections, saying the company is headed in the right direction. “I think the analysts maybe aren’t taking everything into account and they’re just assuming straight-line growth,” Potts says. “This company has grown very fast in the last few years and it’s very difficult to maintain that momentum on multiple fronts.” Quarterly earnings at Winnebago totaled $8.1 million, compared to $9.6 million one year ago.
Potts says labor-related constraints continue to be an issue for the company and more changes are needed. “Things like continuing to look for ways of enhancing out ability to recruit and retain employees and also expanding into other labor markets,” Potts says. Potts says demand continues to be strong for Winnebago products, with motorized unit bookings growing 59-percent in the quarter, contributing to a very healthy backlog.
“Our product is very competitive and in demand, we’ve gained market share,” Potts says. “We are typically the premium product on the retail lot and that’s a good position to be in — when you can command that price for your product. All systems are go in that way, it’s just the headwinds that we’ve encountered in our ability to grow with the market has put a pause on things momentarily.”
Investors reacted to today’s report as Winnebago shares dropped nearly 13-percent on the New York Stock Exchange during the first two hours of trading.
(Reporting by Bob Fisher, KRIB, Mason City)