Winnebago Slashes Guidance As RV Slump Deepens; Management Uses Cautious Tone

Winnebago Industries' shares plummeted nearly 10% after the company lowered its full-year outlook due to declining consumer demand and elevated borrowing costs. The RV industry has been experiencing a downturn since the Federal Reserve began hiking interest rates in 2022. Winnebago CEO Michael Happe attributed the decline to growing macroeconomic uncertainty, which led to a decrease in RV activity from consumers and dealers. The company lowered its industry forecast for wholesale RV shipments to 315,000 to 335,000 units for 2025. Winnebago also reduced its net revenue guidance to $2.7 billion to $2.8 billion and adjusted earnings guidance to $1.20 to $1.70 per share. The company's third-quarter performance was solid in the marine and motorhome segments, but weak in the towables segment, with profitability and earnings declining sharply year-over-year. Wall Street analysts were mostly cautious in their response, citing concerns about consumer discretionary spending and interest rate uncertainty. The RV industry is expected to continue struggling until interest rates decrease, making it a challenging time for companies like Winnebago. However, this could be a good time for consumers to buy RVs at discounted prices. The stock is worth adding to a watch list, but its recovery depends on an interest rate-cutting cycle.