The coronavirus pandemic has altered Americans’ leisure behaviors, contributing to a high market for motorhomes and residential trailers. Winnebago Industries Inc. (WGO) has been one of the winners of the trend. The tremendous interest of Americans in mobile homes has provided a record year for the firm.
Cancellations of flights, closed resorts and social interaction limits have driven many Americans to travel only with their families. Motorhomes and residential trailers, which allow to stop visiting hotels, were the most comfortable transport in this situation. In recent years, the market for this form of transport has risen rapidly. Winnebago raised revenue by 35 percent in the past year (the first quarter of fiscal year 2021). Winnebago’s sales rose 22 percent outside the recently purchased Newmar brand, marking an increase from 15 percent growth in the same period last year. Solid demand was also observed in all segments: residential trailer sales grew by 33 percent year on year and motorhomes by 7 percent year on year.
Winnebago was able to translate growth in revenue into growth in earnings. Gross profit soared to 17.3% of income. This was attributed to a decrease in prices, among other factors. But the most critical aspect was stable pricing: retailers reduced promotional campaigns and kept costs steady because of the high demand for mobile homes. Overall, according to Winnebago, dealerships are failing to keep up with demand for mobile homes. Towables orders more than tripled year-on-year, and the number of orders rose by 400% in the motorhome category.
Winnebago forecasts that, particularly in the winter season, demand for mobile homes will not slow down. The organization therefore expects 2021 to be a record fiscal year, although it accepts the existence of such uncertainties, including a possible slowdown in the economy.
At the December 31 trading, the Winnebago Industries, Inc. (WGO) stock was down -4.68% to $59.94, with shares increasing by almost 13 percent over the year.