Recreational vehicle manufacturer Thor Industries, Inc. (NYSE: THO) announced second quarterly earnings and revenue above consensus EPS of $1.22 per share on revenues of $1.51 billion. The company’s net income was $64.8 million, or $1.23 per diluted share, on record revenues of $1.59 billion. Gross profit increased 42.3% to $211.7 million, though gross profit margins decreased to 13.3% in the second quarter compared to 15.3% in the prior-year period, due primarily to acquisition-related dilution. Net income increased 45.0% on sales growth of 62.9% when compared with the second quarter of last year. This strong growth was a combination of organic growth as well as the inclusion of results from Jayco. Diluted earnings per share for the fiscal 2017 second quarter increased 44.7% from the previous year. Shares fell nearly 10 percent as the company’s profit margins continue to shrink.
"The second quarter marked another period of growth for Thor, as we experienced a positive start to the spring retail show season around the country," said Bob Martin, Thor President and CEO. "Growing demand from new consumers broadening our market has continued, with younger families increasingly buying more affordably priced travel trailers and smaller motorhomes. These positive trends give us confidence that Thor and the industry will outpace volumes achieved in 2016, which was the best year of wholesale RV shipments since the 1970s. We remain convinced that these trends will continue to drive industry growth in future periods, as we provide new consumers with positive experiences that prompt them to become lifelong RVers."
Mr. Martin added, "We increased production in the first half of fiscal 2017, which is typically a slower seasonal period, to respond to the high demand. We continue to make progress in expanding our production capacity, including expansion projects announced at Keystone, Jayco and Heartland, which should begin to ramp up over the remainder of fiscal 2017 and into fiscal 2018. The investments we are making in expanding our production facilities will position us well for long-term growth, which is a consistent focus of our strategic plan."