Winnebago Industries (WGO) Q2 2025 earnings summary

Executive summary

• Net revenues for Q2 FY25 were $620.2M, down 11.8% year-over-year, with sequential profitability improvement and margin growth in all segments.

• Adjusted EPS was $0.19, down 79.6% year-over-year, and adjusted EBITDA was $22.8M (3.7% margin), down 54.2% year-over-year.

• Marine segment showed strong growth and market share gains, while Motorhome RV segment faced significant declines; Towable RV segment was stable with slight revenue growth.

• Company continues to invest in product innovation, new launches, and revitalization efforts across brands, with notable market share gains in select segments.

• Completed $100M high-yield debt tender and $20M in share repurchases, enhancing capital efficiency.

Financial highlights

• Gross margin for Q2 FY25 was 13.4%, down 160 bps year-over-year due to product mix; adjusted EBITDA margin fell 340 bps to 3.7%.

• Adjusted diluted EPS dropped to $0.19 from $0.93 year-over-year.

• Free cash flow for the trailing twelve months was $72.3M, down from $224.9M in the prior year.

• SG&A expenses rose 8.6% to $69.7M, driven by incentive compensation and investments in Grand Design and Barletta.

• Cash flow used in operations was $27.2M for the quarter.

Outlook and guidance

• FY25 net revenues expected between $2.8B and $3.0B, with adjusted EPS guidance of $2.10–$3.10 and reported EPS $2.75–$3.75.

• Guidance reflects dynamic RV/marine sector trends, dealer inventory reductions, and macroeconomic headwinds including interest rates and tariffs.

• Wholesale RV shipment forecast for 2025 set at 320,000–350,000 units, below industry consensus.

• Sequential improvement in top line and margins expected in Q3 and Q4 as the selling season progresses.

• Management expects dealer demand to stabilize as the spring selling season begins, with long-term confidence in RV and marine demand.