THOR incentives increase 28% YoY

Recreational vehicle manufacturer THOR Industries continued to increase incentives in the third quarter of 2023 as RV sales, backlog and dealer inventory declined. The RV manufacturer increased its promotions and rebates liabilities to $158 million, up 27.5% year over year, largely due to dealer inventory concerns over too any model year 2022 units in the retail cycle, according to an investor Q&A letter on the company’s Q3 earnings, ended April 30. The increase follows a 25.3% YoY increase in Q2 2023 , which the company attributed to competitive pricing. THOR’s net sales totaled 51,512 units in Q3, a decrease of 44.9% YoY compared with record sales in Q3 2022, according to the company’s 10-Q. North American motorized RV sales tallied 6,203 units, down 21.2% YoY, while North American towable sales came in at 29,716 units, down 57.3% YoY. “Despite strong underlying interest for the RV lifestyle, calendar 2023 retail activity has been negatively impacted by near-term macroeconomic pressures, particularly in North America,” according to the letter. “Given these economic headwinds, we experienced softening demand trends to begin calendar 2023 with approximate 20%-plus year-over-year declines in North America retail registrations through April 30, 2023.” Preparing for 2024 inventory THOR’s North American independent dealer inventory decreased 16.6% YoY to 113,000 units, according to the company’s earnings presentation today. Inventory declined 8,300 units sequentially, in line with the company’s focus on reducing dealer channel inventory, Senior Vice President and Chief Operating Officer Todd Woelfer said in the company’s earnings release. “In North America, we continue to prudently manage wholesale production levels given cautious ordering patterns by our independent dealers amid an uncertain market environment,” he said. “Given the seasonal step-up in retail demand we experienced as we progressed through the fiscal third quarter, our teams were able to assist independent dealers in destocking approximately 8,300 units from channel inventory and reducing a substantial number of prior-model-year units.” [caption id="attachment_58330182" align="aligncenter" width="1024"] © Can Stock Photo / urbanlight [/caption] The focus on reducing dealer inventories comes as dealers and THOR navigate economic doubt ahead of the release of model year 2024 inventory, according to the letter. “Given the current dynamic market conditions and macroeconomic uncertainty, we continue to work closely with our independent dealer partners in aligning the levels and mix of field inventory,” Woelfer said in the letter. “In the near term, we are working with independent dealers to further reduce their inventory levels as we approach the July release of model year 2024 towable products and as dealers mitigate the impact of elevated interest rates and other associated carrying costs.” Backlogs plummet THOR’s order backlog totaled $5.5 billion in Q3, down 60.4% YoY, according to the earnings presentation. The North American towables backlog sat at $757.1 million, down 89% YoY, while the North American motorized vehicles backlog clocked in at $1.3 billion, down 69.2% YoY. North American shipments totaled 78,600 units in Q3, down 54.2% YoY, according to the company’s 10-Q. North American towable unit shipments landed at 65,208, down 58.1% YoY, and North American motorized unit shipments declined 15.1% YoY to 13,392. The reduction in shipments comes as the company adjusts manufacturing and cuts costs as the market normalizes following record pandemic performance, Woelfer said, noting, “these actions, and the progress we achieved during our third fiscal quarter, enhance our position as we execute through the balance of the fiscal year.” The company reduced its fiscal 2023 net sales forecast in Q3 by $500 million at the high-end to between $10.5 billion and $11 billion, after cutting the guidance by $1 billion in Q2 to between $10.5 billion and $11.5 billion, according to the company’s press release. The reduction reflects the company’s inventory management efforts and the expectation of lower Q4 financial results, Bob Martin , president and chief executive of THOR, emphasized. Shares of THOR Industries [NASDAQ: THO ] were trading at $93.15 as of market close today, up $13.99 or 17.67% from market open. THOR has a market capitalization of $4.39 billion. The Big Wheels Auto Finance Data 2023 report , the only tabulation of the top 200 auto lenders by outstandings, is available now.

THOR incentives increase 28% YoY

Dealer inventory down 17% YoY

May auto sales increase for 10th month on pent-up demand

Dealer floorplan interest income falls 67% YoY

Related Posts

RV dealerships should use these 3 strategies to remain compliant

RV dealers say rate cuts needed as cash flow tightens

MarineMax F&I revenue up 8.6%

RV dealers, lenders skeptical about AI

Dealer floorplan interest income falls 67% YoY

Stay Informed with Our Newsletters

The Roadmap Podcast

Welcome Back!

Retrieve your password