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Thor Industries (THO) Down 4.8% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Thor Industries (THO - Free Report) . Shares have lost about 4.8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Thor Industries due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Thor Q4 Earnings Surpass Estimates But Decline Y/Y
Thor delivered adjusted earnings of $1.68 per share for fourth-quarter fiscal 2023, which surpassed the Zacks Consensus Estimate of 97 cents per share. This outperformance can be primarily attributed to better-than-expected results from the European RVs segment. The bottom line declined a massive 67.3% from the year-ago profit of $5.15 per share. The company registered revenues of $2,738 million for the quarter under review, outpacing the Zacks Consensus Estimate of $2,457 million. However, the top line declined 28.4% year over year.
As of Jul 31, 2023, Thor had cash and cash equivalents of $441.2 million and long-term debt of $1,291.3 million.
Segmental Results
North American Towable RVs: Revenues from the segment came in at $930.6 million, down 48.2% year over year due to a decrease in unit shipments resulting from soft dealer and consumer demand. The top line also fell short of our estimate of $942.4 million. Gross profit totaled $110.7 million, declining 59.4% year over year amid higher manufacturing overhead costs and warranty expenses. Pretax income totaled $55.6 million, down from $181.6 million recorded in the year-ago period amid lower gross profit margins and reduced sales. The unit’s total backlog was $756 million at quarter-end, down sharply from $2.57 billion as of Jul 31, 2022.
North American Motorized RVs: Revenues from the segment totaled $656.1 million, which fell 36% year over year, owing to a decrease in unit shipments and net price per unit. The top line also lagged our forecast of $703 million. Gross profit totaled $56.4 million, dwindling 69.3% year over year amid higher material costs and an increase in sales discounts. Consequently, pretax profit came in at $21 million, tanking 83.5% from the year-ago period. The segment’s backlog was $1.24 billion, down from $3.43 billion as of Jul 31, 2022.
European RVs: Revenues from the segment came in at $1,019 million, up 26.3% from the year-ago period, thanks to higher shipments and an increase in price per unit. The top line also outpaced our projection of $546 million. Gross profit of $193.3 million rose 26.7% year over year on lower manufacturing overhead costs and higher sales. The segment reported a pretax income of $101.7 million, higher than the year-ago level of $74.8 million. The backlog of the segment was $3.55 billion, reflecting a rise from $2.75 billion recorded on Jul 31, 2022.
Fiscal 2024 Forecasts
Thor projects its full-year consolidated net sales in the range of $10.5-$11.0 billion. The consolidated gross profit margin is expected to be in the range of 14.5-15%. Earnings per share are now expected to be in the range of $6.25-$7.25.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -15.86% due to these changes.
VGM Scores
Currently, Thor Industries has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Thor Industries has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Thor Industries (THO) Down 4.8% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Thor Industries (THO - Free Report) . Shares have lost about 4.8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Thor Industries due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Thor Q4 Earnings Surpass Estimates But Decline Y/Y
Thor delivered adjusted earnings of $1.68 per share for fourth-quarter fiscal 2023, which surpassed the Zacks Consensus Estimate of 97 cents per share. This outperformance can be primarily attributed to better-than-expected results from the European RVs segment. The bottom line declined a massive 67.3% from the year-ago profit of $5.15 per share. The company registered revenues of $2,738 million for the quarter under review, outpacing the Zacks Consensus Estimate of $2,457 million. However, the top line declined 28.4% year over year.
As of Jul 31, 2023, Thor had cash and cash equivalents of $441.2 million and long-term debt of $1,291.3 million.
Segmental Results
North American Towable RVs: Revenues from the segment came in at $930.6 million, down 48.2% year over year due to a decrease in unit shipments resulting from soft dealer and consumer demand. The top line also fell short of our estimate of $942.4 million. Gross profit totaled $110.7 million, declining 59.4% year over year amid higher manufacturing overhead costs and warranty expenses. Pretax income totaled $55.6 million, down from $181.6 million recorded in the year-ago period amid lower gross profit margins and reduced sales. The unit’s total backlog was $756 million at quarter-end, down sharply from $2.57 billion as of Jul 31, 2022.
North American Motorized RVs: Revenues from the segment totaled $656.1 million, which fell 36% year over year, owing to a decrease in unit shipments and net price per unit. The top line also lagged our forecast of $703 million. Gross profit totaled $56.4 million, dwindling 69.3% year over year amid higher material costs and an increase in sales discounts. Consequently, pretax profit came in at $21 million, tanking 83.5% from the year-ago period. The segment’s backlog was $1.24 billion, down from $3.43 billion as of Jul 31, 2022.
European RVs: Revenues from the segment came in at $1,019 million, up 26.3% from the year-ago period, thanks to higher shipments and an increase in price per unit. The top line also outpaced our projection of $546 million. Gross profit of $193.3 million rose 26.7% year over year on lower manufacturing overhead costs and higher sales. The segment reported a pretax income of $101.7 million, higher than the year-ago level of $74.8 million. The backlog of the segment was $3.55 billion, reflecting a rise from $2.75 billion recorded on Jul 31, 2022.
Fiscal 2024 Forecasts
Thor projects its full-year consolidated net sales in the range of $10.5-$11.0 billion. The consolidated gross profit margin is expected to be in the range of 14.5-15%. Earnings per share are now expected to be in the range of $6.25-$7.25.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -15.86% due to these changes.
VGM Scores
Currently, Thor Industries has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Thor Industries has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.