Winnebago Industries, Inc. 2026 Q4 Earnings Call

Thank you, operator. Good morning, everybody, and thank you for joining us to discuss our fiscal 2026 fourth quarter and full-year results. This call is being broadcast live on our website at investor.wgo.net, and an audio replay of the call will be available on our website later today. Our earnings release was issued and posted to our website earlier this morning. Please note that the earnings slide deck, which accompanies our prepared remarks, is also available in the investor section of our website under quarterly results. Turning to slide 2. Certain statements made during today's conference call may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The company cautions you that forward-looking statements involve a number of risks and uncertainties, many of which are beyond the company's control, and could cause the actual results to differ materially from these statements.

These risks and uncertainties are identified in our SEC filings, including our annual report on Form 10-K, which we encourage you to read. We undertake no obligation to update or revise any forward-looking statements to reflect events or circumstances that may arise after today's call, except as required by law. In addition, on today's call, we will refer to GAAP and non-GAAP financial measures. The reconciliation of the non-GAAP measures to the comparable GAAP measures are available in our earnings press release and in the appendix of today's presentation, both available on the investors page of our website. Please turn to slide 3. Hosting today's call are Michael Happe, President and Chief Executive Officer of Winnebago Industries, and Bryan Hughes, Senior Vice President and Chief Financial Officer. Mike will begin with an overview of our fourth quarter performance and our perspective on the market outlook.

Bryan will discuss the associated drivers of our financial results and our fiscal year 2027 guidance. Mike will conclude our prepared remarks, and then management will be happy to take your questions. With that, please turn to slide 4 as I hand the call over to Mike.

Good morning, everyone. I want to begin by thanking our employees across Winnebago Industries. Fiscal 2026 was another challenging year for the RV and marine industries, requiring us to make difficult decisions about the structure and size of our organization in response to market conditions. Through it all, our teams demonstrated tremendous agility and discipline while continuing to serve our customers and dealer partners at the highest levels possible. I am incredibly grateful for their commitment and hard work. Their dedication and ingenuity give me great confidence in our ability to drive stronger, more durable performance over time. Starting on slide four, consumer interest in the RV and boating lifestyle remains healthy, with continued engagement across shows, digital channels, campgrounds, marinas, and the used market.

At the same time, affordability pressures, elevated financing costs, and broader macroeconomic uncertainty continue to weigh on consumers and delay the conversion of that interest into new product purchases. That caution is also reflected in dealer ordering, with dealers continuing to manage inventory carefully. Against that backdrop, we remain focused on the areas within our control, bringing relevant new products to market, improving operational execution, and managing our product offerings, costs, and cash with discipline. As a result, our fourth quarter results were substantially in line with our expectations. We maintained disciplined production and wholesale shipment levels, and while there are pockets of softness, dealer inventory quality remained broadly within acceptable ranges. RV dealer inventory turns improved to 1.8 times, reflecting our continued focus on aligning shipments with retail demand and supporting the health of our dealer network. Moving to slide five. The latest SSI retail results provide encouraging evidence of our brand's competitiveness.

At a time when affordability remains a significant consideration for consumers, our premium portfolio is holding its overall RV position while gaining unit and dollar share in select categories. We believe this performance reflects the strengths of our brands, the appeal of our new products, and strong dealer advocacy, reinforced by the steps we have taken to make our offerings accessible across a broader range of price points. For the trailing 12 months ended August 31, Newmar expanded its leadership in Class A diesel, helping drive enterprise retail unit share to 35.4% and dollar share to 41%. We also gained share in Class C, where Grand Design Motorized reached 3.6% retail unit share, up 170 basis points from the prior year period.

In travel trailers, we gained share in the trailing 12-month period in both units and dollars, even as industry retail units declined approximately 13%. Within that category, Winnebago-branded travel trailers reached 1.7% retail unit share, up approximately 30 basis points from the prior year period. At Grand Design Towables, our largest business, dealer inventory turns improved to two times exiting the fiscal year, up from 1.6 times in the third quarter. This turns improvement reflects healthier channel inventory and provides a stronger foundation for the business in the future. On slide six, Barletta increased its 12-month trailing market share of the U.S. aluminum pontoon segment to 9.7%, up approximately 70 basis points from the prior year. That share gain against both established competitors and a growing field of newer entrants reinforces our confidence in the strength of the Barletta brand and the appeal of its differentiated products.

Across our portfolio, we are committed to driving profitable share growth, bringing new products to market, and maintaining healthy dealer inventories. A financially strong dealer network is essential to delivering sustainable performance for our partners and for Winnebago Industries. Throughout fiscal 2026, we took deliberate actions across four strategic initiatives outlined here in slide seven to improve efficiency, strengthen financial flexibility, and position the business for future growth. Our objective is a more resilient and higher-performing enterprise with a disciplined and efficient cost structure, stronger through-cycle margins, and over time, EPS growth that outpaces revenue growth. Some of these initiatives are already contributing to our competitive position while others will take some time to implement, mature, and then translate into improved financial performance. First, we took further steps to improve operational efficiency and align our manufacturing footprint with demand.

During the fourth quarter, we announced plans to relocate Winnebago Towables production to Grand Design's Middlebury campus, consolidate select Grand Design manufacturing lines, and also bring Winnebago B Van production together with our core motorhome operations in Forest City. These collective actions are designed to improve facility utilization, simplify operations, and increase the efficiency and flexibility of our manufacturing network. Our focus now is on executing these transitions well with the financial benefits expected to build over time as implementation progresses and operations stabilize. Second, we continued investing in innovation that matters to our owners. Grand Design's Omega Frame platform and the expanded use of the composite roof technology across that brand's portfolio are some examples of our focus on product quality and durability. These investments are intended to strengthen quality and the ownership experience, reinforcing the premium positioning of our brands and giving consumers additional reasons to choose them.

Third, we maintained a prudent approach to costs, working capital, and liquidity. Throughout the year, our teams aligned spending and inventory levels with prevailing demand while continuing to support key product and growth priorities. We ended the quarter with net leverage of 2.2 times, down meaningfully from 3.1 times in the prior year, strengthening our balance sheet and increasing our capacity to invest selectively in the business. We also successfully renewed our $350 million asset-based lending facility, preserving ample liquidity as we enter fiscal 2027. Fourth, we broadened our product portfolio and expanded access to our brands. The products introduced during fiscal 2026 expand our participation across customer segments, use cases, and price points. Taken together, these actions are designed to strengthen our ability to compete through the cycle.

There is more work ahead and our focus in fiscal 2027 is on disciplined execution and translating these initiatives into sustained financial improvement. Slide eight shows several of the products introduced during the year. These launches represent deliberate extensions of our portfolio designed to reach new customer segments, enter additional categories, and offer a broader range of price points. At multiple retail, trade, and dealer meeting events in September, dealer feedback across our brands was encouraging and reinforced that the investments we have made to broaden our portfolio and reach more consumers are well-aligned with evolving consumer preferences. With that, I'll turn the call over to our CFO, Bryan Hughes, to review the quarter and our fiscal 2027 outlook in more detail.

Bryan? Thank you, Mike. Turning to our consolidated results on slide 10, fourth quarter net revenues were approximately $645.1 million, while adjusted EBITDA was approximately $32.6 million, representing a 5.1% margin.

Adjusted earnings per diluted share was $0.49. For the full year, net revenues were approximately $2.7 billion, and adjusted earnings per diluted share was $1.79. Consolidated revenue declined from the prior year quarter due to lower unit volume and an unfavorable product mix, partially offset by selective price adjustments. Retail demand remained subdued and dealers continued to order cautiously. We deliberately improved dealer inventory turns across our brands, which, along with retail trends, was a significant driver of volume decline. Profitability reflected the impact of lower volume, partially offset by lower SG&A expense, focused cost management, and improving performance within the motorhome RV segment.