Winnebago beats estimates as motorhome segment surges 29%
RV manufacturer raises annual earnings guidance after paying down $100M in debt and improving leverage ratio
Winnebago Industries reported better-than-expected second-quarter results, driven by a surge in motorhome demand that helped the recreational vehicle manufacturer overcome weakness in its towable segment and beat Wall Street forecasts.
The Forest City, Iowa-based company posted adjusted earnings per diluted share of $0.27 for the quarter ended February 28, exceeding the $0.24 consensus estimate. Net revenues rose 6% year-over-year to $657.4 million, surpassing analyst projections of approximately $628 million.
The standout performance came from the motorhome segment, where revenues jumped 29.3% to $304.7 million, up from $235.6 million in the prior-year quarter. The division swung to an operating profit of $7.5 million from a loss of $0.6 million a year earlier, with margins improving to 2.4% from negative 0.3%.
"Our team delivered a solid quarter in a challenging market environment," said Michael Happe, president and chief executive officer, noting that new products drove the motorhome gains. "Dealers remain focused on profitable cash flow and disciplined inventory."
Despite the top-line beat, profitability metrics showed some pressure. Gross profit of $85.6 million represented a 13% gross margin, down 40 basis points from 13.4% in the year-ago period. The towable RV segment struggled, with revenues declining 9% to $262.4 million, hurt by lower unit volumes and a shift toward lower-price models.
Winnebago raised its full-year reported earnings per share guidance to a range of $1.50 to $2.20, up from the previous $1.40 to $2.10. The company maintained its adjusted EPS outlook of $2.10 to $2.80 and projected full-year revenues of $2.8 billion to $3.0 billion.
On the balance sheet, Winnebago redeemed $100 million of senior secured notes during the quarter, reducing total outstanding debt to $442.3 million. The leverage ratio improved to 3.2 times from 4.0 times at the end of November, while net leverage stood at 2.9 times.
The earnings beat comes after Winnebago shares lost approximately 23% of their value from February highs, with the stock recently trading around $35. The technical indicator Relative Strength Index sits at 31, suggesting oversold conditions.
Analysts had been largely cautious heading into the print, with a consensus "Hold" rating and average price targets ranging from $42.80 to $48.00, according to pre-earnings data. JMP Securities recently upgraded its outlook, while Citigroup maintained an "Outperform" recommendation.
The broader RV industry is forecasting modest growth in 2026, with wholesale shipments projected in the mid-300,000 unit range. Motorhome shipments increased 12.7% in January compared to the prior year, led by a 21.6% jump in Class C models, according to industry data.
Winnebago's results reflect the divergent fortunes across RV categories. While higher-end motorhomes appear to be benefiting from wealthier consumers' spending power, towable RVs—typically more affordable and accessible to middle-income buyers—continue facing headwinds from inflation and elevated interest rates that have made financing more expensive.
The company also noted that seasonal factors and unfavorable winter weather impacted retail activity during the quarter. However, management expressed confidence in its operational strategy, emphasizing product innovation, inventory management, and cost control actions that should support performance in the second half of fiscal 2026.
Winnebago's diversified portfolio, which includes marine products through brands like Barletta, helped offset some variability across categories. The marine segment faced challenging industry conditions but continued gaining market share, according to the earnings presentation.
Looking ahead, the company expects North American RV wholesale shipments for calendar 2026 to reach 315,000 to 345,000 units, aligning with broader industry projections. Interest rate declines anticipated in 2026 could stimulate demand, particularly for higher-feature models that have seen slower uptake during the recent tightening cycle.