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Thor Industries Q1 2020 net sales $2.16 billion

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Christian Fernsby ▼ | December 10, 2019
Thor Industries announced results for the first quarter of fiscal 2020 ended October 31, 2019.
Thor Industries
Thor Industries   First quarter net sales increased 22.9%
First quarter net sales were $2.16 billion, an increase of $402.8 million, or 22.9%, from the first quarter of fiscal 2019.

Topics: Thor Industries

The addition of $493.0 million in net sales from the European RV segment was partially offset by net sales decreases of 6.1% and 3.6% in the North American Towable RV and the North American Motorized RV segments, respectively.

Consolidated gross profit margin was 14.3% for the quarter, compared to 11.8% in the prior-year period, primarily reflecting favorable overall product mix and reductions in material, labor and warranty cost percentages in the North American RV segment, tempered by the gross profit margin from the European RV segment, which was lower than the overall North American gross margin for the current quarter.

Net income attributable to Thor and diluted earnings per share for the first quarter of fiscal 2020 were $51.1 million and $0.92, respectively, compared to $14.0 million and $0.26, respectively, in the prior period.

Results for the first quarter of fiscal 2020 included incremental interest expense and amortization of intangibles related to the acquisition of EHG amounting to $39.7 million, or $0.58 per diluted share, while first quarter fiscal 2019 results were adversely impacted by a foreign currency forward contract loss and costs related to the acquisition of EHG which, in aggregate, totaled $57.1 million, or $1.02 per diluted share.

The Company's effective income tax rate for the first quarter of fiscal 2020 was 24.5% compared to a tax rate of 55.7% in the prior year.

The primary reason for the decrease in the overall effective income tax rate between the comparative periods was the non-deductible foreign currency forward contract loss of $42.6 million that occurred during the first quarter of fiscal 2019.

The Company expects a worldwide effective tax rate for the remainder of fiscal 2020 ranging between 19% and 22%, before consideration of any discrete tax items.

North American independent dealer inventory rationalization continued during the fiscal first quarter, as North American industry wholesale shipments once again declined at a faster rate than retail registrations.

As a result, independent dealer inventory levels of Thor products in North America decreased by 22.8% to approximately 101,500 units as of October 31, 2019, compared to approximately 131,500 units as of October 31, 2018.

Independent dealer inventory of Thor products in North America, following the first quarter of fiscal 2020, was at its lowest point since the first quarter of fiscal 2017.

Management believes independent dealer orders will generally be commensurate with consumer demand during calendar 2020.

European dealer inventory is also going through a modest rationalization, though inventory levels were not as high as in North America on a relative basis.

Management believes that independent dealer inventory levels of EHG products in Europe, while somewhat elevated in certain locations, remain generally appropriate for seasonal consumer demand in Europe moving into calendar 2020.


 

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