Winnebago Industries, Inc. WGO recorded earnings of 32 cents per share in the first quarter of fiscal 2016 (ended Nov 28, 2015), down from 37 cents earned in the prior-year quarter. Also, the figure missed the Zacks Consensus Estimate of 37 cents. Net income dropped to $8.6 million from $9.9 million in the year-ago quarter.
Revenues for the first quarter fell 4.5% to $214.2 million from $224.4 million in the prior-ago quarter. Moreover, the figure fell short of the Zacks Consensus Estimate of $226 million. The year-over-year decline in revenues was due to lower motorized unit shipments.
Revenues from the towables segment increased 24.1%, backed by a 49.5% rise in unit volume, partly offset by a 175.5% fall in average selling price. Unit shipments of motorhomes declined 5.4% year over year. In first-quarter fiscal 2016, motorhome retail registrations rose 3%, while towable retail registrations increased 10%.
Operating profit for the reported quarter decreased to $12.8 million from $14.4 million in the prior-year quarter. Gross profit improved to $25.2 million or 11.8% of sales from $24.4 million or 10.9% of sales in the year-ago quarter. The year-over-year increase in gross margin was backed by better motorized product mix, higher contribution from towables, lower workers’ compensation expense and the realization of cost-saving benefits related to Winnebago’s strategic sourcing initiative. This was partly offset by continued labor-related manufacturing inefficiencies and unfavorable trends in warranty expense.
Financial Position
Winnebago had cash and cash equivalents of $55.7 million as of Nov 28, 2015, compared with $70.2 million as of Aug 29, 2015.
In first quarter fiscal 2016, Winnebago’s cash used in operations stood at $8.1 million, down from $19.6 million in the year-ago period. Capital expenditure increased to $3.1 million from $2.3 million in first-quarter fiscal 2015.
Dividend
On Dec 16, 2015, the board of directors of Winnebago approved a quarterly dividend of 10 cents per share. The dividend will be paid on Jan 27, 2016, to stockholders on record as of Jan 13.
Zacks Rank
Winnebago currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the same industry include General Motors Co. GM, O'Reilly Automotive Inc. ORLY and U.S. Auto Parts Network, Inc. PRTS. General Motors currently sports a Zacks Rank #1 (Strong Buy), while O'Reilly and U.S. Auto Parts carry a Zacks Rank #2 (Buy).
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