One of the oldest and best known brands in the recreational vehicle industry said Wednesday (March 24) that the COVID-era’s lure of the outdoors is prompting younger people, families and first-timers to take up camping, a trend that drove record quarterly results at Winnebago Industries.
For the three months ending Feb. 27, the Iowa-based company said “robust consumer demand” drove its fiscal second-quarter revenues 34 percent higher to a record $840 million, while its net income rose 300 percent.
Like many in the RV sector, the 60-year-old maker of motorhomes, towable trailers and Chris-Craft boats has benefitted from changing consumer tastes, and told investors it sees no signs of that shift slowing down.
“While we are pleased with the exceptional financial and operating results delivered for the second quarter, we are also optimistic about the positive retail and wholesale conditions for the rest of our fiscal year,” CEO Michael Happe said, noting the company’s efforts to work with suppliers to deliver more products to the market for the foreseeable future.
“Strong retail demand, low field inventory, and record committed dealer orders set the table for continued robust performance, but it should be especially noted [that] we also believe there is secular and ongoing growth in outdoor lifestyle products as consumer priorities have changed due to the pandemic,” he added.
The Secular Shift
According to Winnebago’s investor presentation, the company’s diverse line of products and brands, coupled with a broad rise in consumer demand, has seen its share of the RV market quadruple over the past five years, going from just 3 percent share in 2016 to almost 13 percent currently.
But it’s not just campers and trailers that are rising, as Winnebago said its Chris-Craft unit was facing a long order backlog into the fall of 2021, with more than 50 percent of its boats being sold to retail buyers at a time when dealer inventories are at a 12-year low.
At the same time, Winnebago highlighted several changing dynamics that it is benefitting from as consumer interest in outdoor activity broadens and diversifies.
Specifically, the company said 60 percent of the U.S. population pursued some form of outdoor activity last year, and nearly 70 percent of consumers under the age of 55 participated in an outdoor activity such as camping, hiking, boating or visiting a state or national park.
What’s significant is the fact that almost one-third of these new outdoorsy people were first-timers, more than half of whom were millennials.
As far as family vacations go, part of the allure of RV life is often a value proposition when compared to the cost of traditional hotel, resort and air travel expenditures, and Winnebago said since the pandemic took hold 82 percent of new campers have children.
Work From Road
As much as the work-from-home trend has caused sweeping impacts on the daily routines and buying habits of consumers, it has also sparked a work-from-anywhere mentality among adventurous souls who are able to do their jobs anywhere there is a good Wi-Fi connection.
There are also more baby boomers turning 65 each year now than at any point in history, which is leading to a boom in retirement-age consumers who are adopting an on-the-road Winnebago lifestyle.
While some consumers can swap a house for a $400,000 top-of-the-line Class-A motorhome, record numbers of other people are choosing to test the water, so to speak, and renting the RV lifestyle first before taking the ultimate plunge. It’s a trend that has seen companies like Outdoorsy also posting record results and struggling to meet demand.
Even with the increase of late, Winnebago said that household penetration of RV ownership stood at just 11 percent.
Happe said with end consumers continuing to flock to the great outdoors in search of extraordinary experiences with family and friends, “[Winnebago] is seeing strong retail momentum heading into the prime spring season.”
Winnebago Industries is worth about $2.6 billion and its stock has risen more than 250 percent over the past 12 months.
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