A month has gone by since the last earnings report for Thor Industries (THO). Shares have added about 4.3% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Thor Industries due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Thor Q2 Earnings Miss Estimates

Thor reported earnings of 40 cents per share for the second quarter of fiscal 2024 (ended Jan 31, 2024), which missed the Zacks Consensus Estimate of 69 cents. The bottom line tumbled 20% from the year-ago quarter’s earnings of 50 cents per share. The company registered revenues of $2.21 billion for the quarter under review, lagging the Zacks Consensus Estimate of $2.30 billion. The top line declined 5.9% year over year.

Segmental Results

North American Towable RVs: Revenues from the segment came in at $730.97 million, down 11.9% year over year due to a decrease in overall net price per unit. The figure also missed our estimate of $805.7 million.

Gross profit totaled $53.9 million, rising 2% year over year. The pretax income totaled $661,000 against a pretax loss of $7.1 million recorded in the year-ago period, primarily due to lower amortization costs and larger gains on the sales of fixed assets. The unit’s total backlog was $836.2 million at the quarter's end, down from $1.15 billion as of Jan 31, 2023.

North American Motorized RVs: Revenues from the segment totaled $570.4 million, which fell 22.8% year over year, owing to a decrease in unit shipments, product mix and net price per unit. The figure also missed our estimate of $702.6 million.

Gross profit totaled $60.7 million, falling 43.4% year over year. Consequently, pretax profit came in at $26.4 million, declining 57% from the year-ago period due to lower sales and gross margin. The segment’s backlog was $1.07 billion, down from $1.85 billion as of Jan 31, 2023.

European RVs: Revenues from the segment came in at $782.3 million, up 20.9% from the year-ago period, driven by an increase in unit shipments and net price per unit. The figure beat our estimate of $695.9 million.

Gross profit of $119.3 million increased 30.5% year over year. The segment reported a pretax income of $38.1 million, higher than the year-ago pretax income of $12 million. The backlog of the segment was $2.75 billion, which declined from $3.01 billion recorded as of Jan 31, 2023.



Financials

As of Jan 31, 2024, Thor had cash and cash equivalents of $340.2 million and long-term debt of $1.39 billion. During the second quarter of fiscal 2024, THO did not repurchase any shares of its common stock.

Guidance for Fiscal 2024

Thor has revised its full-year guidance for fiscal 2024. It now projects its full-year consolidated net sales in the range of $10-$10.5 billion, down from the previous guidance of $10.5-$11 billion. The consolidated gross profit margin is now expected in the band of 14-14.5%, down from the previous range of 14.5-15%. Earnings per share (EPS) are now expected in the range of $5-$5.50, down from the previous guidance of $6.25-$7.25.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended downward during the past month.

The consensus estimate has shifted -25.22% due to these changes.

VGM Scores

At this time, Thor Industries has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Thor Industries has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.

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