On Thursday, KeyBanc Capital Markets provided insights into the recreational vehicle (RV) industry based on observations from the Florida RV SuperShow and investor sessions with companies such as Camping World Holdings Inc . (NYSE:CWH), Thor Industries Inc. (NYSE:THO), and Winnebago Industries Inc . (NYSE:WGO).
The analysts ovserved that " in our view, affordability remains a concern and, as a result, the magnitude of industry retail recovery heading into spring remains uncertain, though dealers are hopeful this year."
Camping World Holdings Inc. (CWH)
Camping World's management indicated a more positive retail environment, though they do not anticipate industry retail levels in 2025 to be significantly different from the previous year.
For instance, Camping World has introduced competitively priced motorized RVs and plans to re-enter the $25-$35K travel trailer segment more significantly.
The company also aims to improve gross profit and administrative expenses as a percentage of gross profit by 6-7% in 2025, which is expected to contribute to meaningful EBITDA growth.
The analysts observed "CWH focused/is focused on hitting price points across segments via attractive private label offerings, given affordability remains a key concern, with the full breadth of offerings representing a multiyear process of optimizing unit costs/identifying attractive price points. "
Winnebago Industries Inc. (WGO)
Winnebago Industries reported mixed early-year show results due to weather conditions but remains focused on expanding its product portfolio to cater to a broader range of consumers, emphasizing affordability.
The company has seen success with its Reflection and Solitude fifth wheels and aims to increase market share in entry-level trailers.
Winnebago's management is confident in the growth potential of towable RVs and has initiated a leadership realignment to engage more effectively with top towable dealers.
Thor Industries Inc. (THO)
Thor Industries also experienced mixed early-year show results but remains cautiously optimistic about retail prospects in 2025, driven by increased dealer optimism.
The company is prepared for various market scenarios, with the ability to ramp up production if necessary. Thor acknowledged potential margin pressures due to private label penetration but is optimistic about overall margin leverage on higher volumes.
The company continues to focus on improving gross margins, mainly through towable margins, and maintains a long-term goal of 17% gross margin, with its Parts strategy being a key component.
Overall, the RV industry is navigating a landscape marked by dealer optimism and strategic pricing initiatives, yet it faces challenges such as affordability and uncertain consumer demand.
Companies are adapting by offering value-driven products and focusing on operational efficiencies to position themselves for potential growth in the upcoming year.
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