Winnebago (WGO) Warming Up to Q4 Earnings: What to Expect?

Winnebago Industries WGO is scheduled to release fourth-quarter fiscal 2021 results on Oct 20, before the opening bell. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings per share and revenues is pegged at $1.98 and $936.32 million, respectively.

One of the leading recreational vehicle (RV) makers, Winnebago posted better-than-expected earnings in the last reported quarter on higher-than-anticipated revenues from the Towable & Motorhome segments.

Winnebago surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average being 50.11%. This is depicted in the graph below:

Winnebago Industries, Inc. Price and EPS Surprise

Winnebago Industries, Inc. price-eps-surprise | Winnebago Industries, Inc. Quote

Trend in Estimate Revisions

The Zacks Consensus Estimate for Winnebago’s fiscal fourth-quarter earnings per share has been revised upward by 4 cents to $1.98 in the past 90 days. Moreover, this compares favorably with the year-ago quarter’s $1.45 per share. Also, the Zacks Consensus Estimate for revenues suggests a year-over-year rise of 26.91%.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Winnebago for the to-be-reported quarter, as it does not have the right combination of the two key ingredients. A combination of a positive Earnings ESP, and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), increases the odds of an earnings beat. However, this is not the case as elaborated below.

Earnings ESP: Winnebago has an Earnings ESP of -0.17%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Winnebago — peers of which include Thor Industries THO, REV Group, Inc. REVG and LCI Industries LCII — carries a Zacks Rank of 2, currently. You can see the complete list of today’s Zacks #1 Rank stocks here.

Factors at Play

The sustained recovery of the auto sector from the pandemic-induced disruptions is likely to have favorably impacted Winnebago’s fiscal fourth-quarter performance. It is also to be noted that even after the gradual easing of restrictions, the risks of availing public transport like flights prompted many first-time buyers to opt for RVs to go camping around the country or enjoy a vacation, which is anticipated to have boosted the demand for Winnebago’s products during the to-be-reported quarter.

The Zacks Consensus Estimate for the Towable segment revenues is pegged at $543 million, indicating a year-over-year jump of 23.8%. The strong consumer demand for the Grand Design and Winnebago’s product lines is likely to have driven revenues. The Consensus Estimate for the Motorhome segment revenues is pinned at $405 million, suggesting year-over-year growth of 34.1%.

Winnebago completed the acquisition of Barletta during the quarter under discussion, thereby fortifying its marine market foothold. The acquisition, which has broadened Winnebago’s customer network, and augmented its revenue stream beyond RVs, is likely to have boosted the company’s top line during the to-be-reported quarter.

However, rising operating expenses amid the elevated selling, general and distribution (SG&A) expenses and amortization cost are expected to have dented Winnebago’s cash flows and overall margins during the fiscal fourth quarter. Apart from this, rising input costs might have strained the firm’s margins during the quarter.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.