Thor Industries(THO) - 2025 Q4 - Annual Report

PART I Business Overview THOR Industries, established in 1980, is the world's largest recreational vehicle (RV) manufacturer, dominating North American and European markets through decentralized operations - THOR Industries is the world's largest recreational vehicle (RV) manufacturer, dominating both North American and European markets[10] - The company manufactures towable and motorized RVs in North America through subsidiaries like Airstream, Jayco, and Keystone, and various RV types in Europe via Erwin Hymer Group (EHG)[11][12] - Subsidiaries like Airxcel and Postle provide RV-related components and aluminum extrusions, supporting RV manufacturers and the aftermarket[22][23] General - THOR Industries, founded in 1980, is the world's largest recreational vehicle (RV) manufacturer and a leading producer in both North America and Europe[10] - The company manufactures various RVs, related components, and accessories in the U.S. and Europe, primarily selling to independent dealers in the U.S., Canada, and Europe[10] North American Recreational Vehicles - THOR is the largest RV manufacturer in North America by both volume and revenue, maintaining a leading position through fiscal years 2025, 2024, and 2023[13] - Key North American operating subsidiaries include Airstream (premium towable and motorized RVs), Jayco (towable, fifth-wheel, and motorized RVs), Keystone, KZ, Thor Motor Coach, and Tiffin Group[11][13][15][16][17][18][19] - Heartland's operations (conventional travel trailers and fifth-wheel RVs) will be reported under Jayco starting in fiscal year 2026[14] European Recreational Vehicles - THOR is a leading recreational vehicle manufacturer in Europe through its Erwin Hymer Group (EHG) subsidiary[20] - EHG produces multiple brands, including Buccaneer, Buerstner, Carado, Dethleffs, and Hymer, across nine primary European production facilities, covering both motorized and towable RVs[21] Other Businesses - Airxcel, Inc. produces a comprehensive range of high-quality RV-related products through its operating divisions and subsidiaries, primarily for RV OEMs and aftermarket sales via dealers and retailers[22] - Postle Operating, LLC manufactures and sells aluminum extrusions and specialty component products to RV and other manufacturers[23] Product Line Sales and Segment Information - The company operates with three reportable segments: North American Towable Recreational Vehicles, North American Motorized Recreational Vehicles, and European Recreational Vehicles[24] - Airxcel and Postle subsidiaries' operations are categorized under "Other," primarily involving sales of aluminum extrusions and specialty RV components[25] Contribution to Net Sales by Reportable Segment (Fiscal Years 2023-2025) | | 2025 | | | 2024 | | | | 2023 | | |---|---|---|---|---|---|---|---|---|---| | | Amount | % | Amount | % | Amount | % | | Recreational vehicles: | | | | | | | | North American Towable | $3,784,666 | 39.5 | $3,679,671 | 36.6 | $4,202,628 | 37.8 | | North American Motorized | 2,175,604 | 22.7 | 2,445,850 | 24.4 | 3,314,170 | 29.8 | | European | 3,023,961 | 31.6 | 3,364,980 | 33.5 | 3,037,147 | 27.3 | | Total recreational vehicles | 8,984,231 | 93.8 | 9,490,501 | 94.5 | 10,553,945 | 94.9 | | Other | 859,609 | 9.0 | 781,927 | 7.8 | 777,639 | 7.0 | | Intercompany eliminations | (264,350) | (2.8) | (229,020) | (2.3) | (209,979) | (1.9) | | Total | $9,579,490 | 100.0 | $10,043,408 | 100.0 | $11,121,605 | 100.0 | Recreational Vehicle Product Classification - North American RVs primarily include towable RVs (such as conventional travel trailers and fifth-wheel travel trailers) and motorized RVs (Class A, C, and B)[28][29][30][31] - European RVs include towable caravans, motorcaravans, campervans, and urban vehicles, with European products emphasizing lightweight and compact designs[28][32][33][37][38] Production - RVs are typically produced based on dealer orders to minimize inventory; North American capacity adjustments are relatively quick and low-cost, while European adjustments are longer and more expensive[39] - The company relies on a limited number of chassis suppliers, and chassis supply constraints have previously caused production disruptions and may recur[40][41] - Europe continues to face increased costs, intermittent shortages, and delivery delays for non-chassis raw material components in the current fiscal year, impacting production efficiency[43] Seasonality - RV sales are seasonal, typically lower in winter months (second fiscal quarter) and higher in spring and summer, though strong consumer demand or macro/social disruptions may alter these patterns[46] Marketing and Distribution - The company primarily sells RVs through independent, non-franchised dealers in the U.S., Canada, and Europe, with approximately 2,400 dealers in North America and 1,100 in Europe as of July 31, 2025[47] - FreedomRoads, LLC accounted for approximately 14.0% of the company's consolidated net sales in fiscal 2025, and 14.0% and 13.0% in fiscal 2024 and 2023, respectively[52] - The company generally does not directly finance dealer purchases but enters into repurchase agreements with lenders upon request, committing to repurchase vehicles if a dealer defaults[53] Backlog - The increase in North American motorized RV backlog is primarily due to lower retail sales as of July 31, 2024, and dealer and consumer concerns regarding higher interest rates and carrying costs[54] - The decrease in European recreational vehicle backlog is primarily due to improved chassis supply and normalized dealer inventory levels as of July 31, 2025[56] Recreational Vehicle Backlog (as of July 31) | | July 31, 2025 | | July 31, 2024 | | Change | % | |---|---|---|---|---|---|---| | Recreational vehicles | | | | | | | | North American Towable | $525,014 | $552,379 | $(27,365) | (5.0) | | North American Motorized | 1,004,620 | 776,903 | 227,717 | 29.3 | | Total North America | 1,529,634 | 1,329,282 | 200,352 | 15.1 | | European | 1,525,592 | 1,950,793 | (425,201) | (21.8) | | Total | $3,055,226 | $3,280,075 | $(224,849) | (6.9) | Product Warranties - North American RV retail purchasers typically receive a one-to-two-year limited warranty for defects in materials and workmanship, with longer terms for certain structural components[58] - European RVs generally offer a two-year limited warranty on structural components and up to a 12-year warranty against water ingress[58] Regulation - The company complies with vehicle safety and compliance standards from the U.S. RVIA, NHTSA, and those in Canada and Europe[59] - Operations are subject to environmental control standards for air, water, and noise pollution, as well as workplace health and safety standards[60][61] - The company believes its products and facilities comply in all material respects with applicable regulations and anticipates no significant impact on capital expenditures, earnings, or competitive position from ongoing compliance in the foreseeable future[62] Competition - The RV industry is highly competitive with low barriers to entry, featuring approximately 80 North American and 30 European manufacturers[63] - As of June 30, 2025, THOR's retail market share in the U.S. and Canada was approximately 39.1% for towable and fifth-wheel RVs and 48.3% for motorized RVs[64] - EHG's retail market share in Europe was approximately 26.1% for motorized RVs and campervans and 17.3% for caravans[65] Trademarks and Patents - The company holds registered trademarks and patents in the U.S., Canada, Germany, and other international markets, and does not rely on third-party patents or technology licenses[66] Human Capital Resources - As of July 31, 2025, the company employed approximately 20,900 full-time team members globally, with 13,200 in the U.S. and 7,700 in Europe[68] - The company is committed to a "people-first" culture, offering competitive compensation and benefits, and prioritizing team member safety and well-being[70][71][72][73] - The company provides annual training on its Business Ethics Policy to certain employees and offers an anonymous reporting channel to ensure ethical conduct[74] Forward-Looking Statements - This annual report contains forward-looking statements, and actual results may differ materially from expectations[76] - Risk factors include inflation, raw material and chassis supply constraints, geopolitical events, interest rate fluctuations, warranty and recall claims, dealer financial health, regulatory changes, and competition[76][79] Available Information - The company's annual reports (10-K), quarterly reports (10-Q), current reports (8-K), and proxy statements are available free of charge on its website and the SEC's website[78] Risk Factors The company faces risks from macroeconomic volatility, intense competition, supply chain dependency, product liabilities, dealer concentration, international operations, and regulatory compliance - RV industry sales are highly volatile, influenced by macroeconomic conditions (such as inflation and interest rates) and consumer sentiment, exhibiting cyclical and seasonal patterns[82][83] - The company heavily relies on suppliers for timely raw materials and components, especially chassis, where shortages or price fluctuations can disrupt production and increase costs[94][97][100] - Product recalls, customer satisfaction initiatives, and product liability claims could materially and adversely affect the company's financial condition and reputation[105][106][107] - Reliance on key independent dealers (e.g., FreedomRoads, LLC) and dealer consolidation trends could negatively impact business[109][110] - International operations face risks from exchange rate fluctuations, tariffs, regulatory differences, and geopolitical events[111][113][114] - Increasingly stringent climate-related regulations, ESG matters, data privacy, and AI regulations may lead to additional costs, restrict product use, or harm the company's reputation[133][136][139][140] Macroeconomic, Market, and Strategic Risks - RV industry sales are highly volatile, influenced by macroeconomic conditions (such as inflation and interest rates) and consumer sentiment, exhibiting cyclical and seasonal patterns[82][83] - The company's stock price may fluctuate significantly due to various factors, including competitor new products, government regulatory changes, global economic conditions, interest rate changes, and investor sentiment[85][86] - The RV industry is highly competitive with low barriers to entry, featuring competition from existing manufacturers, new entrants, the used RV market, and other leisure spending options[88][89][90][91] - The company's long-term success depends on its ability to innovate, including developing and marketing new products (e.g., electric and hybrid RVs) that meet consumer demand, but these investments are costly and uncertain[92][93] Operational Risks - The company heavily relies on suppliers for timely raw materials and components, especially chassis, where shortages, production issues, or transportation delays can disrupt operations and increase manufacturing costs[94][97][101] - Fluctuations in raw material and component prices, along with changes in tariff policies, could increase costs and impact profit margins if not passed on to dealers[100] - Product recalls, customer satisfaction initiatives, and product liability claims could materially and adversely affect the company's financial condition and reputation[105][106][107] - Reliance on key independent dealers (e.g., FreedomRoads, LLC) and dealer consolidation trends could negatively impact business and increase concentration risk for repurchase obligations[109][110] - International sales (accounting for 36.1% of consolidated sales in fiscal 2025) expose the company to risks from exchange rate fluctuations, tariffs, international legal compliance, supply chain disruptions, and economic/social instability[111][113][114] - Attracting and retaining experienced skilled labor, managing rising labor costs and employee benefits, and potential unionization efforts are critical for the company's long-term success and competitiveness[117][118][119][122][123] Legal and Regulatory Risks - Climate-related regulations (e.g., emissions standards, zero-emission vehicle mandates) and increasing ESG focus may lead to additional compliance costs, restrict product use, or harm the company's reputation and stock price[133][134][136][138] - Stricter privacy, data use, data protection, and artificial intelligence laws and regulations could result in increased compliance costs, fines, litigation, or reputational damage[139] - The company's operations are subject to numerous national, regional, federal, state, and local regulations, and any non-compliance or product recalls could materially and adversely affect operating results and reputation[140][141][142] - Anti-takeover provisions in the company's organizational documents may delay or prevent a change in control, thereby limiting shareholders' ability to receive a premium[143][144] Financial Risks - Changes in tax rates, tax laws, or tariffs could negatively impact the company's operating results, cash flows, financial condition, dividend payments, or strategic plans[145][147] - The company's repurchase agreements with lenders financing dealer inventory, totaling $3.484 billion in commercial commitments as of July 31, 2025, could lead to increased future costs[149][150][457] - The company holds significant goodwill, intangible assets, equity investments, and other long-term assets, which may incur impairment charges due to changes in business conditions, poor operating performance, or adjustments to valuation assumptions[151][283][284] - The availability and terms of financing for dealers and retail purchasers, particularly interest rates and credit availability, significantly impact product demand and company performance[152][153] - The company's debt arrangements (totaling $933.8 million as of July 31, 2025) make it more sensitive to economic downturns and may limit future financing capacity and debt costs[155][158] Unresolved Staff Comments There are no unresolved staff comments in this report - There are no unresolved staff comments in this report[160] Cybersecurity Risk Management, Strategy, and Governance The company dedicates significant resources to its cybersecurity program, integrating it into the overall risk management system to identify, assess, and mitigate cyber threats, with board oversight - The company dedicates significant resources to its cybersecurity program, integrating it into the overall risk management system to identify, assess, and mitigate cyber threats[160] - Cybersecurity measures include penetration testing, internal testing, phishing simulations, and employee training, with cybersecurity insurance purchased to cover potential information security breach costs[161][162] - The Board's Audit Committee oversees cybersecurity threat risks, with the Data Protection Officer (possessing nearly 25 years of cybersecurity experience) regularly reporting to the Audit Committee and the Board[164][165] - No cybersecurity threats with a material impact on the company's business strategy, operating results, or financial condition were identified in fiscal year 2025[163] Risk Management and Strategy - The company integrates cybersecurity risk management processes into its overall risk management system, regularly identifying and assessing threats, and developing mitigation strategies[160] - Internal measures include penetration testing, internal testing/code reviews, phishing simulations, and employee cybersecurity training[161] - The company maintains cybersecurity insurance to cover potential information security breach costs, and no material cybersecurity threats were identified in fiscal year 2025[162][163] Governance - The company's Board of Directors' Audit Committee is responsible for overseeing cybersecurity threat risks[164] - The Data Protection Officer, reporting directly to the General Counsel, is responsible for the overall cybersecurity risk management program and regularly provides cybersecurity risk reports to the Audit Committee and the Board[164][165] Properties As of July 31, 2025, THOR Industries owns or leases approximately 24.136 million square feet of manufacturing and office space globally, primarily in Indiana and Germany, which are well-maintained and sufficient for intended use - As of July 31, 2025, the company owns or leases approximately 24,136,000 square feet of manufacturing and office space globally[166][167] - Primary properties are concentrated in Indiana, U.S. (12,612,000 square feet), and Germany, Europe (4,065,000 square feet)[167] - The company believes its existing facilities are well-maintained, in good condition, and sufficient for their intended purposes[166] Legal Proceedings The company is involved in routine litigation, including 'lemon law' and warranty claims, but management believes these will not materially impact its financial position, with past product recalls and investigations resolved - The company is involved in routine litigation, primarily based on state "lemon laws," warranty claims, and vehicle accidents, and maintains insurance coverage exceeding its self-insured retention for these matters[168] - Management believes the ultimate disposition of any current legal proceedings or claims will not have a material adverse effect on the company's financial condition, results of operations, or cash flows[168] - A product recall at the end of fiscal 2021 and a German vehicle weight disclosure investigation in fiscal 2022 have been resolved, with no material impact on the company's operating results in fiscal 2025[169][170][463] Mine Safety Disclosures This item is not applicable - This item is not applicable[171] PART II Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities The company's common stock trades on the NYSE, with 131 registered shareholders as of September 16, 2025; the Board plans to continue quarterly cash dividends, and the company repurchased $52.647 million of common stock in fiscal 2025, with a new $400 million authorization approved - The company's common stock (par value $0.10 per share) trades on the New York Stock Exchange (NYSE) under the ticker symbol 'THO'[173] - As of September 16, 2025, there were 131 registered holders of the company's common stock[173] - The Board plans to continue regular quarterly cash dividends in the future, subject to earnings, cash flow, and existing financing agreement conditions[175] - In fiscal 2025, the company repurchased 586,558 shares of common stock totaling $52.647 million; as of July 31, 2025, $379.3 million remained under a new $400 million stock repurchase authorization (approved June 18, 2025, expiring July 31, 2027)[178][977][978] Market Information - The company's common stock (par value $0.10 per share) trades on the New York Stock Exchange (NYSE) under the ticker symbol 'THO'[173] Holders - As of September 16, 2025, there were 131 registered holders of the company's common stock[173] Dividends - The company's Board of Directors currently plans to continue regular quarterly cash dividends in the future[175] - Dividend payments are subject to specific payment conditions in existing credit agreements, including minimum adjusted excess cash availability and fixed charge coverage tests[175] Quarterly Dividend Payments | Fiscal Year | Quarterly Dividend Per Share | | :--- | :----------- | | 2025 | $0.50 | | 2024 | $0.48 | Unregistered Sales of Equity Securities and Use of Proceeds - In fiscal 2025, the company repurchased 586,558 shares of common stock at a weighted-average price of $89.76, totaling $52.647 million[178][977] - On June 18, 2025, the Board approved a new $400 million stock repurchase authorization, effective until July 31, 2027, with $379.3 million remaining under the authorization as of July 31, 2025[178][975][978] Stock Repurchase Summary (Three Months Ended July 31, 2025) | Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs | | :--------------- | :------------------------------- | :--------------------------- | :----------------------------------------------------------------------- | :------------------------------------------------------------------------------------- | | 5/1/25 – 5/31/25 | — | — | — | $421,095 | | 6/1/25 – 6/30/25 | 453,116 | $88.98 | 453,116 | $389,903 | | 7/1/25 – 7/31/25 | 117,242 | $90.44 | 117,242 | $379,300 | | | 570,358 | $89.28 | 570,358 | | (Reserved) This item is reserved - This item is reserved[8] Management's Discussion and Analysis of Financial Condition and Results of Operations In fiscal 2025, consolidated net sales decreased 4.6% to $9.579 billion, gross margin fell 0.5 percentage points to 14.0%, and income before taxes dropped 15.1% to $296 million, driven by demand shifts and macroeconomic factors - Consolidated net sales for fiscal 2025 decreased by 4.6%, primarily due to lower demand in the North American motorized and European segments, partially offset by sales growth in the North American towable segment[227] - Income before income taxes for fiscal 2025 decreased by 15.1%, primarily impacted by lower consolidated net sales and increased selling, general, and administrative expenses[231] - The company prioritizes using cash flow to reduce debt, maintain and grow dividend payments, fund organic growth, and pursue opportunistic acquisitions[266] Consolidated Financial Performance Summary (Fiscal Years 2025 vs. 2024) | Metric | Fiscal 2025 (Amount) | Fiscal 2024 (Amount) | Change (Amount) | Change (%) | | :------------------------------------ | :------------------- | :------------------- | :---------------- | :--------- | | Net Sales | $9,579,490 | $10,043,408 | $(463,918) | (4.6) | | Gross Profit | $1,340,641 | $1,451,962 | $(111,321) | (7.7) | | Gross Profit % of Net Sales | 14.0% | 14.5% | (0.5) pp | | | Selling, General & Administrative Expenses | $922,554 | $895,531 | $27,023 | 3.0 | | SG&A % of Net Sales | 9.6% | 8.9% | 0.7 pp | | | Income Before Income Taxes | $296,191 | $348,844 | $(52,653) | (15.1) | | Effective Income Tax Rate | 13.4% | 23.9% | (10.5) pp | | Executive Summary - THOR is the world's largest RV manufacturer, dominating both North American and European markets with a business model that includes decentralized operating units[183][184] - In fiscal 2025, consumer confidence, inflation, and high interest rates negatively impacted RV wholesale and retail demand in North America and Europe[186] Significant Fiscal 2025 Events - The Omnibus Beautiful Bill (OBBB) was signed into law on July 4, 2025, with the most relevant impact for fiscal 2025 being 100% bonus depreciation for qualified assets[187] - Other relevant OBBB provisions will impact the company in fiscal years 2026 and 2027, including the expensing of U.S. R&D costs and changes to international tax provisions[187] Significant Fiscal 2024 Events - On November 15, 2023, the company amended its term loan and ABL agreements, extending maturity dates and reducing applicable interest rates for U.S. dollar-denominated loans[188] - On July 1, 2024, the company further amended its term loan, reducing applicable interest rates for both U.S. dollar and Euro-denominated loans[189] - These amendments resulted in total charges of $14.741 million recognized in fiscal 2024, primarily comprising debt extinguishment costs and third-party expenses[188][429] North American RV Industry - As of July 31, 2025, North American RV independent dealer inventory decreased by 2.3% to approximately 73,300 units[191] - As of July 31, 2025, THOR's total North American RV backlog increased by 15.1% to $1.5296 billion, primarily driven by an increase in North American motorized RV backlog[193] - RVIA forecasts North American wholesale unit shipments to increase by 1.0% to approximately 337,000 units in calendar year 2025, and by 3.6% to approximately 349,300 units in calendar year 2026[195][196] - Despite recent challenges, the company remains optimistic about the long-term outlook for North American retail sales, believing consumer interest in the RV lifestyle remains strong[202][203] North American RV Industry Wholesale Unit Shipments (Six Months Ended June 30) | | U.S. and Canada Wholesale Unit Shipments | | | | |---|---|---|---|---| | | Six Months Ended June 30, | | Increase | % | | | 2025 | 2024 | (Decrease) | Change | | North American Towable units | 172,041 | 159,407 | 12,634 | 7.9 | | North American Motorized units | 18,664 | 19,189 | (525) | (2.7) | | Total | 190,705 | 178,596 | 12,109 | 6.8 | North American RV Industry Retail Unit Registrations (Six Months Ended June 30) | | U.S. and Canada Retail Unit Registrations | | | | |---|---|---|---|---| | | Six Months Ended June 30, | | Increase | % | | | 2025 | 2024 | (Decrease) | Change | | North American Towable units | 166,013 | 169,013 | (3,000) | (1.8) | | North American Motorized units | 19,665 | 21,697 | (2,032) | (9.4) | | Total | 185,678 | 190,710 | (5,032) | (2.6) | European RV Industry - As of July 31, 2025, European RV independent dealer inventory was approximately 22,200 units, down from 26,200 units as of July 31, 2024[210] - As of July 31, 2025, European recreational vehicle backlog decreased by 21.8% to $1.5256 billion, primarily due to improved chassis supply and normalized dealer inventory levels[211] - Despite short-term macroeconomic impacts, the company remains positive about the long-term growth prospects for European RV retail sales, driven by favorable demographic trends and increasing popularity of the RV lifestyle[216] European RV Industry Retail Unit Registrations (Six Months Ended June 30) | | European Unit Registrations | | | | | | |---|---|---|---|---|---|---| | | (2) Motorcaravan and Campervan | | | Caravan | | | | | Six Months Ended June 30, | | % | Six Months Ended June 30, | | % | | | 2025 | 2024 | Change | 2025 | 2024 | Change | | (1) OEM Reporting Countries | 82,524 | 82,909 | (0.5) | 24,869 | 26,898 | (7.5) | | (1) Non-OEM Reporting Countries | 12,139 | 11,901 | 2.0 | 6,393 | 7,776 | (17.8) | | Total | 94,663 | 94,810 | (0.2) | 31,262 | 34,674 | (9.8) | Results of Operations Consolidated Financial Performance - Consolidated net sales for fiscal 2025 decreased by 4.6% year-over-year to $9.579 billion, primarily due to lower demand in the North American motorized and European segments[227] - Consolidated gross profit for fiscal 2025 decreased by 7.7% year-over-year to $1.341 billion, with gross margin declining from 14.5% to 14.0%, primarily due to lower sales and increased sales discounts[228] - Income before income taxes for fiscal 2025 decreased by 15.1% year-over-year to $296 million, primarily impacted by lower consolidated net sales and increased selling, general, and administrative expenses[231] - The effective income tax rate for fiscal 2025 decreased from 23.9% to 13.4%, primarily benefiting from foreign tax law changes (revaluation of deferred tax liabilities due to lower German corporate income tax rates) and a favorable mix of profitable jurisdictions[232][445] Consolidated Operating Results (Fiscal Years 2025 vs. 2024) | | | FISCAL 2025 | FISCAL 2024 | | Change | % | |---|---|---|---|---|---|---| | NET SALES: | | | | | | | | Recreational vehicles | | | | | | | | North American Towable | $3,784,666 | $3,679,671 | $104,995 | 2.9 | | North American Motorized | 2,175,604 | 2,445,850 | (270,246) | (11.0) | | Total North America | 5,960,270 | 6,125,521 | (165,251) | (2.7) | | European | 3,023,961 | 3,364,980 | (341,019) | (10.1) | | Total recreational vehicles | 8,984,231 | 9,490,501 | (506,270) | (5.3) | | Other | 859,609 | 781,927 | 77,682 | 9.9 | | Intercompany eliminations | (264,350) | (229,020) | (35,330) | (15.4) | | Total | $9,579,490 | $10,043,408 | $(463,918) | (4.6) | Consolidated Gross Profit (Fiscal Years 2025 vs. 2024) | | | % of | | | % of | | | | |---|---|---|---|---|---|---|---|---| | | FISCAL 2025 | Segment | FISCAL 2024 | Segment | | Change | % | | | | Net Sales | | Net Sales | Amount | Change | | GROSS PROFIT: | | | | | | | | | Recreational vehicles | | | | | | | | | North American Towable | $496,976 | 13.1 | $427,386 | 11.6 | $69,590 | 16.3 | | North American Motorized | 210,634 | 9.7 | 277,840 | 11.4 | (67,206) | (24.2) | | Total North America | 707,610 | 11.9 | 705,226 | 11.5 | 2,384 | 0.3 | | European | 460,319 | 15.2 | 581,211 | 17.3 | (120,892) | (20.8) | | Total recreational vehicles | 1,167,929 | 13.0 | 1,286,437 | 13.6 | (118,508) | (9.2) | | Other, net | 172,712 | 20.1 | 165,525 | 21.2 | 7,187 | 4.3 | | Total | $1,340,641 | 14.0 | $1,451,962 | 14.5 | $(111,321) | (7.7) | Consolidated Income Before Income Taxes (Fiscal Years 2025 vs. 2024) | | | | % of | | % of | | Change | % | |---|---|---|---|---|---|---|---|---| | | | FISCAL 2025 | Segment | FISCAL 2024 | Segment | Amount | Change | | | | | Net Sales | | Net Sales | | | | INCOME (LOSS) BEFORE INCOME | | | | | | | | | TAXES: | | | | | | | | | Recreational vehicles | | | | | | | | | North American Towable | $247,012 | 6.5 | $169,232 | 4.6 | $77,780 | 46.0 | | North American Motorized | 85,343 | 3.9 | 126,496 | 5.2 | (41,153) | (32.5) | | Total North America | 332,355 | 5.6 | 295,728 | 4.8 | 36,627 | 12.4 | | European | 101,634 | 3.4 | 231,377 | 6.9 | (129,743) | (56.1) | | Total recreational vehicles | 433,989 | 4.8 | 527,105 | 5.6 | (93,116) | (17.7) | | Other, net | 53,740 | 6.3 | 45,299 | 5.8 | 8,441 | 18.6 | | Corporate | (191,538) | — | (223,560) | — | 32,022 | 14.3 | | Total | $296,191 | 3.1 | $348,844 | 3.5 | $(52,653) | (15.1) | Segment Reporting North American Towable Recreational Vehicles - Net sales increased by 2.9%, primarily driven by a 6.2% increase in unit shipments, despite a 3.3% decrease in net price per unit due to a product mix shift towards mid-priced units[237][238] - Gross profit increased by 16.3%, with gross margin improving from 11.6% to 13.1%, primarily due to a lower percentage of cost of products sold, including reduced sales discounts and improved warranty costs[239][241] North American Towable Recreational Vehicles Segment Performance (Fiscal Years 2025 vs. 2024) | Metric | Fiscal 2025 (Amount) | Fiscal 2024 (Amount) | Change (Amount) | Change (%) | | :------------------------------------ | :------------------- | :------------------- | :---------------- | :--------- | | Net Sales | $3,784,666 | $3,679,671 | $104,995 | 2.9 | | Unit Shipments | 119,790 | 112,830 | 6,960 | 6.2 | | Gross Profit | $496,976 | $427,386 | $69,590 | 16.3 | | Gross Profit % of Net Sales | 13.1% | 11.6% | 1.5 pp | | | Income Before Income Taxes | $247,012 | $169,232 | $77,780 | 46.0 | North American Motorized Recreational Vehicles - Net sales decreased by 11.0%, primarily due to an 8.6% decrease in unit shipments and a 2.4% decrease in net price per unit, the latter influenced by increased sales discounts and a product mix shift towards mid-priced gasoline models[245][246] - Gross profit decreased by 24.2%, with gross margin declining from 11.4% to 9.7%, primarily due to lower sales and an increased percentage of cost of products sold, driven by higher sales discounts and product mix changes[247][249] North American Motorized Recreational Vehicles Segment Performance (Fiscal Years 2025 vs. 2024) | Metric | Fiscal 2025 (Amount) | Fiscal 2024 (Amount) | Change (Amount) | Change (%) | | :------------------------------------ | :------------------- | :------------------- | :---------------- | :--------- | | Net Sales | $2,175,604 | $2,445,850 | $(270,246) | (11.0) | | Unit Shipments | 17,153 | 18,761 | (1,608) | (8.6) | | Gross Profit | $210,634 | $277,840 | $(67,206) | (24.2) | | Gross Profit % of Net Sales | 9.7% | 11.4% | (1.7) pp | | | Income Before Income Taxes | $85,343 | $126,496 | $(41,153) | (32.5) | European Recreational Vehicles - Net sales decreased by 10.1%, primarily due to a 19.7% decrease in unit shipments, partially offset by a 9.6% increase in net price per unit, influenced by foreign currency exchange rate changes and a product mix shift towards motorized RVs[254][255] - Gross profit decreased by 20.8%, with gross margin declining from 17.3% to 15.2%, primarily due to lower sales and an increased percentage of material and manufacturing costs[258][259][260] European Recreational Vehicles Segment Performance (Fiscal Years 2025 vs. 2024) | Metric | Fiscal 2025 (Amount) | Fiscal 2024 (Amount) | Change (Amount) | Change (%) | | :------------------------------------ | :------------------- | :------------------- | :---------------- | :--------- | | Net Sales | $3,023,961 | $3,364,980 | $(341,019) | (10.1) | | Unit Shipments | 44,445 | 55,317 | (10,872) | (19.7) | | Gross Profit | $460,319 | $581,211 | $(120,892) | (20.8) | | Gross Profit % of Net Sales | 15.2% | 17.3% | (2.1) pp | | | Income Before Income Taxes | $101,634 | $231,377 | $(129,743) | (56.1) | Liquidity and Capital Resources - As of July 31, 2025, cash and cash equivalents increased by $85.28 million to $586.6 million, with $412.1 million held in the U.S. and $174.5 million in Europe[263] - As of July 31, 2025, net working capital was $1.193 billion, up from $1.083 billion as of July 31, 2024[264] - The company expects its cash and cash equivalents on hand, funds generated from operations, and available funds under its revolving asset-based credit facility (approximately $840 million as of July 31, 2025) to be sufficient for foreseeable operating needs[265] - The company prioritizes using cash flow to reduce debt, maintain and grow dividend payments, fund organic growth, and pursue opportunistic acquisitions and stock repurchases[266] Operating Activities - Net cash provided by operating activities for fiscal 2025 was $577.9 million, primarily from net income adjusted for non-cash items ($512 million) and an increase in accounts payable[270] Net Cash Provided by Operating Activities | Fiscal Year | Amount | | :--- | :------- | | 2025 | $577,923 | | 2024 | $545,548 | Investing Activities - Net cash used in investing activities for fiscal 2025 was $64.465 million, primarily for capital expenditures ($122.9 million), partially offset by proceeds from the disposal of property, plant, and equipment ($63.305 million)[272] Net Cash Used in Investing Activities | Fiscal Year | Amount | | :--- | :--------- | | 2025 | $(64,465) | | 2024 | $(146,812) | Financing Activities - Net cash used in financing activities for fiscal 2025 was $426.3 million, primarily for term loan repayments ($205 million), quarterly dividend payments ($106.1 million), and treasury stock repurchases ($52.647 million)[274] - The company increased its quarterly dividend from $0.48 to $0.50 per share in October 2024[276] Net Cash Used in Financing Activities | Fiscal Year | Amount | | :--- | :--------- | | 2025 | $(426,306) | | 2024 | $(337,677) | Principal Contractual Obligations and Commercial Commitments - As of July 31, 2025, the company's total commercial commitments under dealer inventory financing repurchase obligations amounted to $3.484 billion[280][457] Principal Contractual Cash Obligations (as of July 31, 2025) | Contractual Obligations | Total | Fiscal 2026 | Fiscal 2027-2028 | Fiscal 2029-2030 | After 5 Years | | :---------------------- | :------ | :---------- | :--------------- | :--------------- | :------------ | | Debt principal payments | $933,812 | $3,367 | $11,331 | $505,608 | $413,506 | | Finance leases | $2,062 | $1,107 | $955 | — | — | | Operating leases | $57,348 | $17,476 | $20,181 | $6,902 | $12,789 | | Purchase obligations | $201,391 | $201,391 | — | — | — | | Total | $1,194,613 | $223,341 | $32,467 | $512,510 | $426,295 | Other Commercial Commitments (as of July 31, 2025) | Commercial Commitments | Total Committed | Less Than One Year | 1-3 Years | 4-5 Years | Over 5 Years | | :----------------------- | :-------------- | :----------------- | :---------- | :---------- | :----------- | | Standby repurchase obligations | $3,484,235 | $2,130,127 | $1,354,108 | — | — | Application of Critical Accounting Estimates - Critical accounting estimates include the valuation of goodwill, intangible assets, and long-lived assets, as well as product warranty reserves[282] - Goodwill ($1.841 billion as of July 31, 2025) is tested annually for impairment, with its fair value determined using a discounted cash flow model involving significant management judgments such as sales growth rates, gross margin patterns, and discount rates[283][284] - Product warranty liabilities ($291.1 million as of July 31, 2025) are estimated based on retail sales history, dealer inventory, average costs, and the distribution of warranty expenditures[288][425] Accounting Pronouncements - The company adopted ASU 2023-07, 'Segment Reporting: Improvements to Reportable Segment Disclosures,' as of July 31, 2025[380] - The company is evaluating ASU 2023-09, 'Income Taxes: Improvements to Income Tax Disclosures' (effective fiscal 2026), and ASU 2024-03, 'Income Statement—Reporting Comprehensive Income—Disaggregation of Expenses Disclosures' (effective fiscal 2028)[381][382] Quantitative and Qualitative Disclosures About Market Risk The company faces market risks from foreign currency exchange rates, interest rates, and commodity prices, managing these through forward contracts, economic hedges, and supplier negotiations - The company primarily faces foreign currency exchange rate risk from the Euro and British Pound, which it manages using forward foreign exchange contracts[292] - As of July 31, 2025, the company held $373.8 million in Euro-denominated debt, serving as an economic hedge against foreign currency exchange rate risk for its Euro-denominated subsidiary investments[293][398] - Regarding interest rate risk, assuming constant floating-rate debt levels, a one percentage point increase in interest rates is projected to reduce income before income taxes by $4.138 million annually[294] - The company faces commodity price risk from fluctuations in raw material prices, such as steel and aluminum, and manages these risks through negotiations with suppliers[295] Currency Exchange Risk - The company primarily faces currency exchange rate risk from the Euro and British Pound, and uses forward foreign exchange contracts to manage risks associated with anticipated sales transactions[292] - As of July 31, 2025, the company held $373.8 million in Euro-denominated debt, and a hypothetical 10% change in the Euro/U.S. dollar exchange rate would alter the debt balance by approximately $37.381 million[293] Interest Rate Risk - The company faces market risk from changes in interest rates, which could impact operating results and financial condition[294] - Based on the company's assumed level of floating-rate debt for the next 12 months, a one percentage point increase in interest rates is projected to reduce income before income taxes by $4.138 million annually[294] Commodity Price Risk - The company faces market risk from price fluctuations in purchased raw materials like steel and aluminum, which are integrated into its products and components[295] - The company manages the timing and magnitude of commodity price increases through negotiations with suppliers[295] Financial Statements and Supplementary Data – See Item 15 This item references the financial statements and supplementary data at the end of the report, including unaudited quarterly financial data for fiscal years 2025 and 2024 - This item references the financial statements and supplementary data found on pages F-1 through F-35 at the end of the report[297] Quarterly Financial Data (Unaudited) Quarterly Financial Data (Unaudited) - Fiscal Year 2025 | | | | | | Quarter Ended | | | | |---|---|---|---|---|---|---|---|---| | Fiscal 2025 | | October 31 | | January 31 | | April 30 | | July 31 | | Net sales | $2,142,784 | $2,018,107 | $2,894,816 | $2,523,783 | | Gross profit | 281,442 | 245,197 | 443,119 | 370,883 | | Net income (loss) attributable to THOR Industries, Inc. | (1,832) | (551) | 135,185 | 125,757 | | (1) Earnings (loss) per common share: | | | | | | | Basic | $ (0.03) | $ (0.01) | $ 2.54 | $ 2.37 | | Diluted | $ (0.03) | $ (0.01) | $ 2.53 | $ 2.36 | | Dividends paid per common share | $ 0.50 | $ 0.50 | $ 0.50 | $ 0.50 | | Market prices per common share | | | | | | | High | $ 115.86 | $ 118.85 | $ 105.75 | $ 97.32 | | Low | $ 93.86 | $ 92.45 | $ 63.16 | $ 72.07 | Quarterly Financial Data (Unaudited) - Fiscal Year 2024 | | | | | | Quarter Ended | | | | |---|---|---|---|---|---|---|---|---| | Fiscal 2024 | | October 31 | | January 31 | | April 30 | | July 31 | | Net sales | $2,500,759 | $2,207,369 | $2,801,113 | $2,534,167 | | Gross profit | 357,932 | 270,847 | 421,852 | 401,331 | | Net income attributable to THOR Industries, Inc. | 53,565 | 7,217 | 114,511 | 90,015 | | (1) Earnings per common share: | | | | | | | Basic | $ 1.01 | $ 0.14 | $ 2.15 | $ 1.70 | | Diluted | $ 0.99 | $ 0.13 | $ 2.13 | $ 1.68 | | Dividends paid per common share | $ 0.48 | $ 0.48 | $ 0.48 | $ 0.48 | | Market prices per common share | | | | | | | High | $ 116.31 | $ 122.00 | $ 129.31 | $ 110.32 | | Low | $ 84.55 | $ 87.52 | $ 96.99 | $ 88.37 | Changes In and Disagreements With Accountants on Accounting and Financial Disclosure There are no changes in or disagreements with accountants on accounting and financial disclosure in this report - There are no changes in or disagreements with accountants on accounting and financial disclosure in this report[300] Controls and Procedures Management, including the CEO and CFO, affirmed the effectiveness of disclosure controls and internal controls over financial reporting as of July 31, 2025, with no significant changes in Q4 FY2025, and Deloitte issued an unqualified opinion on internal controls - The company's management assessed and confirmed that its disclosure controls and procedures were effective as of July 31, 2025[300] - Management, based on the COSO framework, assessed and concluded that the company's internal control over financial reporting was effective as of July 31, 2025[303] - No significant changes in internal control over financial reporting occurred during the fourth fiscal quarter of 2025[305] - Deloitte & Touche LLP, the independent registered public accounting firm, issued an unqualified opinion on the effectiveness of the company's internal control over financial reporting[307][308] Part A – Disclosure Controls and Procedures - The company's management, including the Chief Executive Officer and Chief Financial Officer, assessed and confirmed that its disclosure controls and procedures were effective as of July 31, 2025[300] - These controls are designed to ensure that required information is recorded, processed, summarized, and reported within SEC-prescribed timeframes, and communicated to management for disclosure decisions[300] Part B – Management's Annual Report on Internal Control Over Financial Reporting - Management is responsible for establishing and maintaining effective internal control over financial reporting and assessed its effectiveness based on the COSO framework (2013)[301][303] - Management concluded that, as of July 31, 2025, the company's internal control over financial reporting was effective[303] Part C – Changes in Internal Control Over Financial Reporting - No changes in internal control over financial reporting occurred during the fourth fiscal quarter of 2025 that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[305] Part D – Attestation Report of Independent Registered Public Accounting Firm - Deloitte & Touche LLP issued an unqualified opinion on the effectiveness of the company's internal control over financial reporting as of July 31, 2025[307] - Deloitte & Touche LLP also audited the company's consolidated financial statements for the year ended July 31, 2025, and issued an unqualified opinion[308] Other Information The company permits directors and officers to trade company stock under Rule 10b5-1 plans, subject to insider trading policies and ownership requirements, with no new plans adopted or terminated in the three months ended July 31, 2025 - The company's insider trading policy permits directors and officers to trade company stock under Rule 10b5-1 trading arrangements, subject to applicable regulations, company insider trading policies, and stock ownership requirements[313] - No Rule 10b5-1 trading arrangements or "non-Rule 10b5-1 trading arrangements" were adopted or terminated by any director or officer during the three months ended July 31, 2025[314] Rule 10b5-1 Trading Arrangements - The company's insider trading policy permits directors and officers to enter into Rule 10b5-1 trading arrangements during open trading windows and when not in possession of material non-public information[313] - The company generally requires Rule 10b5-1 trading arrangements adopted by directors or officers not to expire within one year of implementation and to comply with mandatory cooling-off period requirements[313] - No Rule 10b5-1 trading arrangements were adopted or terminated by any director or officer during the three months ended July 31, 2025[314] Disclosure Regarding Foreign Jurisdictions That Prevent Inspection This item is not applicable - This item is not applicable[315] PART III Directors, Executive Officers, and Corporate Governance The company has adopted a Business Ethics Policy applicable to all directors, officers, and employees, with additional governance information incorporated by reference from its 2025 proxy statement - The company has adopted the "THOR Industries, Inc. Business Ethics Policy," applicable to all directors, officers, and employees, available on its website[318] - Additional information regarding directors, executive officers, and corporate governance is incorporated by reference from the company's 2025 Annual Meeting of Shareholders proxy statement[319] Executive Compensation Information regarding executive compensation is incorporated by reference from the company's proxy statement - Information regarding executive compensation is incorporated by reference from the company's proxy statement[320] Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters As of July 31, 2025, 703,062 outstanding options, warrants, and rights were issuable under the 2016 Equity and Incentive Plan, with 652,508 shares available for future issuance - The 703,062 securities in column (a) represent restricted stock units and performance stock units granted under the 2016 Plan, which do not have an exercise price[322][323] - Additional information regarding security ownership of certain beneficial owners and management is incorporated by reference from the company's proxy statement[323] Equity Compensation Plan Information - The 703,062 securities in column (a) represent restricted stock units and performance stock units granted under the 2016 Plan, which do not have an exercise price[322][323] Equity Compensation Plan Information (as of July 31, 2025) | Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) | Weighted-average exercise price of outstanding options, warrants and rights (b) | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) | | :------------------------------------------ | :-------------------------------------------------------------------------- | :-------------------------------------------------------------------------- | :------------------------------------------------------------------------------------------------------------------------------------------------ | | Equity compensation plans approved by security holders | 703,062 | $— | 652,508 | | Equity compensation plans not approved by security holders | — | — | — | | Total | 703,062 | $— | 652,508 | Certain Relationships and Related Transactions and Director Independence Information regarding certain relationships, related transactions, and director independence is incorporated by reference from the company's proxy statement - Information regarding certain relationships, related transactions, and director independence is incorporated by reference from the company's proxy statement[324] Principal Accounting Fees and Services Information regarding principal accounting fees and services is incorporated by reference from the company's proxy statement - Information regarding principal accounting fees and services is incorporated by reference from the company's proxy statement[325] PART IV Exhibits and Financial Statement Schedules This item lists the financial statements and exhibits included in the annual report, with all financial statement schedules omitted as the information is inapplicable, immaterial, or already presented in the consolidated financial statements and notes - The financial statements on pages F-1 through F-35 at the end of this report are incorporated by reference into this item[327] - All financial statement schedules have been omitted because the required information is inapplicable, immaterial, or presented in the consolidated financial statements and their notes[328] - The exhibit list includes the company's articles of incorporation, debt agreements (e.g., term loan agreement, ABL credit agreement), equity and incentive plans, and various certification documents[329][330] Financial Statements - Financial statements include the Report of Independent Registered Public Accounting Firm, Consolidated Balance Sheets, Consolidated Statements of Income and Comprehensive Income, Consolidated Statements of Stockholders' Equity, and Consolidated Statements of Cash Flows, along with Notes to Consolidated Financial Statements[327] Financial Statement Schedules - All financial statement schedules have been omitted because the required information is inapplicable, immaterial, or presented in the consolidated financial statements and their notes[328] Exhibits - The exhibit list includes the company's articles of incorporation, debt agreements (e.g., term loan agreement, ABL credit agreement), equity and incentive plans, and various certification documents[329][330] Signatures This report was signed by Robert W. Martin (Director, President, and CEO) and Colleen Zuhl (SVP and CFO) on September 24, 2025, with Deloitte issuing an unqualified opinion on financial statements and internal controls, highlighting Airxcel's goodwill valuation as a critical audit matter - This report was signed by Robert W. Martin, Director, President, and Chief Executive Officer, and Colleen Zuhl, Senior Vice President and Chief Financial Officer of THOR Industries, Inc. on September 24, 2025[334][335][336] - Deloitte & Touche LLP issued an unqualified opinion on the consolidated financial statements and the effectiveness of internal control as of July 31, 2025[338][339] - The valuation of goodwill for the Airxcel reporting unit was identified as a critical audit matter due to significant management judgments in estimating fair value, particularly regarding sales growth rates and discount rates[342][343] Report of Independent Registered Public Accounting Firm - Deloitte & Touche LLP issued an unqualified opinion on the consolidated balance sheets of THOR Industries, Inc. and subsidiaries as of July 31, 2025 and 2024, and the related consolidated statements of income and comprehensive income, stockholders' equity, and cash flows for each of the three years ended July 31, 2025[338] - Deloitte & Touche LLP also issued an unqualified opinion on the effectiveness of the company's internal control over financial reporting as of July 31, 2025[339] Opinion on the Financial Statements - Deloitte & Touche LLP believes the company's financial statements fairly present, in all material respects, the financial position as of July 31, 2025 and 2024, and the results of operations and cash flows for each of the three years ended July 31, 2025, in conformity with U.S. generally accepted accounting principles[338] Critical Audit Matter - The valuation of goodwill for the Airxcel reporting unit was identified as a critical audit matter due to significant management judgments in estimating fair value, particularly regarding sales growth rates and discount rates[342][343] - As of July 31, 2025, the goodwill balance was $1.841 billion, with $392 million allocated to the Airxcel reporting unit, whose fair value exceeded its carrying value, with no impairment identified[342] - Audit procedures included testing management's controls over determining the reporting unit's fair value, evaluating the reasonableness of sales growth rates, and utilizing a fair value specialist to assess the reasonableness of discount rates[344][345]