Thor Industries(US:THO)2025-12-03 11:34Market Performance - THOR's North American RV market share is approximately 39.1% for travel trailers and fifth wheels combined, and 47.9% for motorhomes as of September 30, 2025[74]. - North American RV independent dealer inventory decreased by 5.5% to approximately 70,900 units as of October 31, 2025, compared to 75,000 units a year earlier[77]. - THOR's North American RV backlog increased by $36,333, or 1.9%, to $1,932,525 as of October 31, 2025, driven by increased orders for motorized products[79]. - North American wholesale unit shipments for THOR increased by 3.0% to 104,267 units for the nine months ended September 30, 2025, compared to 101,185 units in the same period of 2024[85]. - North American retail unit registrations for THOR decreased by 1.7% to 113,230 units for the nine months ended September 30, 2025, compared to 115,181 units in 2024[86]. - The RVIA projects a total of approximately 339,700 North American wholesale unit shipments for calendar year 2025, up 1.8% from 2024[80]. - The most likely scenario for calendar year 2026 wholesale unit shipments is projected to increase to approximately 349,000 units, or 2.8% higher than the 2025 forecast[81]. Sales and Revenue - North American total recreational vehicle net sales increased by 11.0% to $1,558,186, while European net sales rose by 8.4% to $655,479 for the three months ended October 31, 2025[108]. - North American motorized vehicle sales surged by 30.9% to $661,096, compared to $505,208 in the same period last year[108]. - European Recreational Vehicle net sales rose by 8.4% to $655,479, with a 1.0% increase in unit shipments[135]. Profitability and Margins - Gross profit margin for North American motorized vehicles improved significantly to 10.8% from 8.5%, reflecting a $28,895 increase in gross profit[108]. - Consolidated gross profit for the three months ended October 31, 2025 increased by $39,532, or 14.0%, with a gross profit margin of 13.4%[112]. - North American Motorized gross profit increased by $28,895, reflecting improved sales and reduced cost percentages[131]. Costs and Expenses - Selling, general and administrative expenses for the three months ended October 31, 2025 increased by $13,833, or 5.8%, primarily due to increased sales-related travel and advertising costs[113]. - The company is closely monitoring the impact of U.S. tariffs on imports, which may affect material costs and profit margins if not offset by pricing strategies[89]. - Labor costs and availability remain a concern, with potential future impacts on production efficiency and profit margins due to high labor costs and regulatory constraints[107]. Inventory and Backlog - European independent dealer inventory decreased by 9.8% to approximately 22,900 units as of October 31, 2025, compared to 25,400 units a year earlier[95]. - The European recreational vehicle backlog decreased by $113,173, or 5.5%, to $1,930,463 as of October 31, 2025, primarily due to improved chassis supply availability[96]. - The order backlog for North American Towable decreased by $277,049, or 29.7%, while North American Motorized backlog increased by $313,382, or 32.5%[110]. Cash Flow and Capital Expenditures - Cash and cash equivalents decreased to $509,878 as of October 31, 2025, down from $586,596 on July 31, 2025[145]. - Net working capital increased to $1,214,646 compared to $1,193,279 at July 31, 2025[146]. - The company plans to use cash generated from operations to reduce indebtedness, maintain and grow dividend payments, and fund growth through acquisitions[148]. - Committed capital expenditures for the remainder of fiscal 2026 are estimated at approximately $195 million, with two-thirds allocated to North America and one-third to Europe[149]. Dividends and Shareholder Returns - The company increased its quarterly dividend from $0.50 to $0.52 per share in October 2025, following a previous increase from $0.48 to $0.50 in October 2024[157]. - The company intends to continue regular quarterly cash dividend payments, with future dividends subject to Board determination based on earnings and cash flows[150]. Economic Outlook - Consumer confidence and discretionary spending are expected to influence near-term demand for RVs, with long-term growth anticipated as economic conditions improve[84]. - The company believes that the availability of camping and RV parking facilities will be crucial for future industry growth, supported by investments from campground owners and government[88]. - Future European RV retail sales outlook remains optimistic due to favorable demographic trends and increasing consumer interest in RV lifestyles[102]. Financial Risks - The company holds $376,064 of debt denominated in Euros, with a hypothetical 10% change in the Euro/U.S. dollar exchange rate potentially affecting the debt balance by approximately $37,606[163]. - A one-percentage-point increase in interest rates could result in an estimated $4,070 reduction in income before income taxes over a one-year period[164].