BMO Looks Past Winnebago’s Soft RV Outlook, Points To Market Share Gains

Winnebago shares jumped in the early cash session as Wall Street analysts shrugged off the weaker-than-expected earnings forecast and instead focused on market share gains across the RV market, as well as the company’s cost-cutting strategy and improving motorhome operations.

“Even as market pressure across our segments persisted, we began to see encouraging early signs across several strategic initiatives: real traction in the Winnebago Motorhome transformation, stabilizing share trends and improving market share at Grand Design Towables, growing market penetration for Grand Design Motorized, and impressive share growth at Winnebago Towables,” CEO Michael Happe wrote in the earnings release.

BMO Capital Markets leisure analyst Tristan Thomas-Martin noted, “Despite a tough macro backdrop, WGO took market share in the quarter behind new product momentum.”

Winnebago forecast fiscal 2027 adjusted earnings of $1.65 to $2.25 a share, well below the Bloomberg Consensus estimate of $2.20. Revenue is expected to reach $2.65 billion to $2.80 billion, compared with the $2.79 billion estimate.

Fourth-quarter adjusted earnings came in at around 49 cents a share, marginally higher than the 48-cent analyst estimate, although revenue tumbled 17% to $645.1 million, missing expectations of $659.2 million.

We have extensively covered the multi-year downturn in the RV market, especially following the boom during the Covid-19 era, fueled by cheap money. Higher interest rates followed shortly afterward, curbing buyers’ ability to finance RVs cheaply.

Winnebago also revealed that any sustainable recovery in the RV market is not a near-term story. It expects North American RV wholesale shipments to be 265,000 to 295,000 units in 2027, with retail demand softening due to elevated interest rates.

Raymond James analyst Joseph Altobello wrote in a note that fourth-quarter results were “largely as expected” amid the RV market downturn.

“The FY27 outlook reflects a still-challenging demand environment and limited visibility into a broader industry recovery, with ongoing cost/footprint actions and Motorhome improvement partially offsetting soft retail demand and continued Towable pressure,” Altobello said.

Winnebago shares soared as much as 8.6% in the early cash session. Year to date, shares are down 39% and have lost 74% of their value since peaking at around $87.53 in March 2021.

Any meaningful rebound in RV demand would require a lower-interest-rate regime. If the AI bubble implodes, then certaintly cheap RVs.