* 2nd-qtr EPS $0.22 vs est $0.15
* Revenue $177.2 mln vs est $170.9 mln
* Motorhome order backlog rises 174 percent to 2,752 units
* CEO says demand still not even close to normal
By Tej Sapru and James B. Kelleher
March 28 Winnebago Industries Inc
reported surprisingly strong profit on Thursday, suggesting the
growing confidence among U.S. consumers is shared by the 50 and
older crowd, the prime demographic for the No. 1 U.S. maker of
The company said renewed momentum in the broader economy -
from surging stock prices to signs of recovery in the housing
market - helped push its order backlog to pre-recession levels
and its profit past market expectations for the third quarter in
The company's top executive said demand is still below the
levels seen before the housing bubble burst - a collapse that
sent recreational vehicle demand plummeting and half dozen of
Winnebago's rivals, including Fleetwood Enterprises and Monaco
Coach, into bankruptcy.
Winnebago, known for its large touring vehicles that provide
home-like comfort on the road, said its order backlog had nearly
tripled from a year earlier to 2,752 units as of March 2, the
fifth quarterly rise in a row.
The Forest City, Iowa-based company's order backlog for
motor homes is now at its highest level since the fourth quarter
of 2004, said Kathryn Thompson, chief executive of equity
research firm Thompson Research Group.
Winnebago said the buyers returning to RV showrooms are
showing an appetite for products across its line, which range in
price from about from $65,000 to more than $300,000.
Most of Winnebago's customers are either retired or
semi-retired, the company said.
The apparent rebound in the U.S. housing market may be the
most important factor of all. Motor home sales are sensitive to
a lot of factors, but tend to be most strongly influenced by the
housing market and energy prices.
Winnebago says its sales closely track the ups and downs of
the market for new homes. Earlier this month, the Commerce
Department reported that permits for future construction jumped
4.6 percent in February, the fastest pace since June 2008.
Randy Potts, the company's CEO, cautioned that while retail
trends are positive, consumer demand is still "not even close"
to where it has been historically - before industry sales peaked
in 2004 and began their long slide in 2005.
"What we've gone through in recent years wasn't a cycle, it
was a catastrophe," Potts said in an interview with Reuters.
But pent-up demand from consumers who postponed purchases
waiting for the economy to recover may change that.
Potts said that in the 25 years before 2004 and 2005, the RV
industry would ship an average of 60,000 motorhomes annually. In
2013, even with the current rebound in demand, the industry
expects to ship about 32,000 units.
"That's still just 50 percent of what we want to say is a
normal market," Potts said.
"So if you believe that the RV lifestyle is alive and well
and that normal hasn't changed ... there should be a real
pent-up demand out there."
Winnebago's stock, which has risen about 30 percent since
the start of the year, closed down 5.6 percent at $20.64 on the
New York Stock Exchange on Thursday. The stock hit a five-year
high of $22.34 on March 14.
There has been some concern that the RV market might be hurt
by cuts in federal spending as well as rising fuel prices.
But data released late last month showed that consumer
confidence is rebounding.
Winnebago reported a profit of $6.3 million, or 22 cents per
share, in the quarter ended March 2, compared with a loss of
$9.1 million, or 3 cents per share, a year earlier. Revenue rose
35 percent to $177.2 million.
Analysts had expected earnings of 15 cents per share on
revenue of $170.9 million, according to Thomson Reuters I/B/E/S.
Rival Thor Industries Inc ' reported a higher
second-quarter profit earlier this month.