Financial Data and Key Metrics Changes - Net revenues declined modestly in Q3, primarily due to a shift in product mix as the new lower ASP Grand Design Transcend series travel trailers outpaced the broader portfolio in terms of units sold [23] - Gross margin decreased by 130 basis points year over year, attributed to higher warranty experience and product mix, partially offset by operational efficiencies [24] - Adjusted EBITDA margin declined by 140 basis points year over year, primarily due to the lower gross margin [24] Business Line Data and Key Metrics Changes - In the Towable RV segment, lower net revenues were largely due to a shift in product mix with the addition of new Grand Design travel trailers, leading to a 2.5% increase in segment unit volume [24] - Motorhome RV net revenues decreased due to lower unit volume related to current market conditions, with total motorhome RV volume declining by 14.8% compared to the prior year [26] - The Marine segment saw a 15% increase in net revenues driven by higher unit volume and targeted price increases, with unit volume up more than 11% year over year [27] Market Data and Key Metrics Changes - North American RV retail sales declined by 8.2% in April, marking the third consecutive month of retail sales dropping by more than 8% [15] - Wholesale RV shipments increased by 3.4% in April, with towable RVs leading the rise [16] - The company lowered its industry forecast for wholesale RV shipments to a range of 315,000 to 335,000 units for calendar year 2025 [17] Company Strategy and Development Direction - The company is focused on executing a comprehensive margin recapture plan centered on refreshing the product line, boosting operational efficiency, and rebuilding sustained profitability beginning in fiscal 2026 [10] - Strategic actions include conducting a capacity utilization analysis, reviewing the manufacturing footprint, and evolving the supply chain in light of expected tariff cost pressure [11] - The company aims to enhance long-term competitiveness and enterprise resilience through disciplined resource allocation and operational efficiency [11] Management Comments on Operating Environment and Future Outlook - Management acknowledged growing macroeconomic uncertainty leading to a downshift in RV activity, which is expected to continue through the remainder of the calendar year [8] - The company remains confident in the resilience of its brands and the long-term potential of its end markets, driven by the growing appeal of the outdoor lifestyle [35] - Management indicated that the second half of fiscal 2025 will see significantly lower net revenues in the Winnebago Motorhome branded business due to market pressures [34] Other Important Information - The company has been recognized by Newsweek as one of America's most trustworthy companies for the second consecutive year [14] - The company is focused on deleveraging its balance sheet while continuing to make targeted growth investments [28] - Free cash flow was negative $81.7 million for the nine-month period, driven primarily by operational inefficiencies [29] Q&A Session Summary Question: Steps to improve the Winnebago branded motorhome business - Management discussed significant production reductions to avoid pushing units to the field with high sales allowances, focusing on improving working capital and cash flow [38][39] Question: Profitability decline in the motorized business - Management indicated that the decline is due to deleverage and necessary discounting to move products in a competitive market [44][45] Question: Outlook for the back half of calendar 2025 - Management refrained from commenting on 2026 but acknowledged that the anticipated recovery in 2025 does not appear to be happening [50] Question: Impact of tariffs on pricing - Management explained that the potential net risk of tariffs could impact diluted earnings per share by $0.50 to $0.75 for fiscal 2026, with ongoing efforts to mitigate these costs [32][54] Question: Strategies from Newmar that could be applied to Winnebago - Management highlighted Newmar's strong product line and effective dealer inventory management as key factors in its success, which could inform strategies for Winnebago [100][102]