Thor Industries faced a significant setback on Wednesday as the recreational vehicle manufacturer revised its financial projections for 2024 downward, citing ongoing economic challenges.
The company now anticipates fiscal 2024 earnings to range between $5 and $5.50 per share, a decrease from the previous forecast of $6.25 to $7.25 per share. Analysts, however, had anticipated earnings of $6.70 per share for the year. Similarly, Thor lowered its revenue outlook to between $10 billion and $10.5 billion, down from the prior estimate of $10.5 billion to $11 billion, falling short of Wall Street’s expected $10.6 billion. Fiscal year 2024 for Thor ends on July 31.
CEO Bob Martin attributed the downward revision to the delay in interest rate relief and a sluggish return of the retail market amidst persistent macroeconomic challenges. He emphasized that the company had not factored in significant relief from these challenges for the remainder of fiscal 2024, prompting the revision in guidance.
High interest rates have contributed to increased costs for purchasing RVs, aligning with efforts by the Federal Reserve to combat inflation.
In its fiscal second-quarter earnings report, Thor posted earnings of 13 cents per share on revenue of $2.21 billion, falling short of analysts’ expectations of 67 cents per share in earnings and $2.27 billion in revenue.
Following the announcement, Thor’s stock plummeted by 15% to $108.08, marking its most significant percentage decline since March 16, 2020. Meanwhile, shares of fellow RV manufacturer Winnebago Industries dropped by 5.1% to $64.76, while mobile-home maker Skyline Champion experienced a marginal increase of 0.2%.
Despite Thor’s challenges, a February report from the RV Industry Association projected an increase in RV shipments for 2024, ranging between 8.8% and 18.8% compared to 2023. Additionally, many economists anticipate a decline in interest rates and inflation in the coming year.