Winnebago posts loss; shares up on inventory news

By James B. Kelleher

CHICAGO (Reuters) - U.S. mobile-home maker Winnebago Industries Inc (WGO.N) posted a wider-than-expected quarterly loss on Thursday, but its shares jumped more than 15 percent on improvement in inventory levels and signs the company is gaining market share.

During a conference call to discuss the results, Bob Olson, the company's chairman and chief executive, said the economic downturn was creating pent-up demand among existing recreational vehicle owners keen to trade up. As a result, he predicted a "bigger increase in demand than we are anticipating" once the industry rebounds.

"We're an eyelash away from being at the lowest inventory levels in the history of our company ... and an eyelash away from a replenishment cycle," Olson said during the call.

"We're getting very, very close."

The Forest City, Iowa-based company reported a fiscal third-quarter net loss of $8.6 million, or 29 cents a share, compared with a net profit of $3.0 million, or 10 cents a share a year ago, hurt, in part, by significant increases in discounting.

Sales fell nearly 64 percent to $50.8 million during the period.

Analysts were looking for a loss of 27 cents a share, before special items, on revenue of $60.2 million, according to Reuters Estimates.

Winnebago shares were up $1.01 at $7.49 on the New York stock exchange. Last fall, the company's shares were trading above $15.

The biggest issue facing the industry continues to be the availability of credit to dealers looking to finance showrooms and customers looking to buy the RVs, which can cost $100,000 or more.

The two biggest lenders to dealers, Bank of America (BAC.N) and General Electric (GE.N) have "toughened up their credit standards," Olson said, contributing to a sharp consolidation in that area of the business. Year to date, Winnebago has seen more than three dozen of its dealers grind to a stop, with many of them forced to seek bankruptcy protection.

Credit at the retail level is hard to get, too. Buyers these days are often required to have a downpayment of at least 20 percent of the RV's purchase price -- a big change from the go-go days of easy credit just a few years ago. And even those downpayments need to have credit scores of at least 725 to 730 "before you're even looked at," Olson said.

The consolidation of the RV manufacturing industry -- several top names including Monaco Coach and Fleetwood Industries have declared bankruptcy -- contributed to the headwinds Winnebago faced in the most recent quarter.

(Additional reporting by Dhanya Ann Thoppil, editing by Dave Zimmerman)