Thor’s RV Sales Follow Credit Off The Cliff (THO, WGO)

November 4, 2008 by Douglas A. McIntyre

Rv_picThor Industries, Inc. (NYSE: THO) issued its preliminary sales and backlog guidance, and as the company sells RV’s you could have likely guessed that sales were down sharply.  Thor said that for the quarter ended October 31, sales were roughly $439.2 million.  This is down a sharp 42% from $763.7 million last year, and significantly under estimates.

The company did not give earnings guidance.  ThomsonReuters (First Call) has estimates listed as over $484 million inrevenues, and the lowest estimates was just under $420 million.

RV sales were pretty grim.  The quarterly sales came in at roughly$331.2 million.  This is a drop of more than 50% from the$664.2 million seen last year.

The company better be thankful that it sells buses.  It reported thatquarterly bus sales were $108.0 million, a gain of 8.5% from $99.5million reported last year. 

One key area to focus on is backlog, as this is used to measurefuture strength or weakness.  Thatis not looking good at all. 

Thor’s backlog at the end ofthe quarter was $381.2 million, down almost 20% from the $476.1 million backlogat the end the same quarter in 2007.   RV backlog was$124.5 million, down a sharp 50% from the $249.7 million last year.Its backlog in buses was up more than 13% from lastyear to $256.6 million.

The company listed its cash and equivalents at roughly $286 million,which the company said will give it "a significant competitiveadvantage in these difficult times."  Thor better hoard that cash allit can.  It sounds like it is going to need it.

Thor’s shares have already been smacked by Thor’s Hammer.  Shares aredown 0.5% at $17.57 today, but the 52-week trading range is $14.68 to$46.00.  Its current market cap is $975 million.

Winnebago Industries Inc. (WGO), its key competitor in RV sales, isactually doing far worse in stock performance.  Its shares are downless than 1% today at $5.95, but its 52-week trading range is $4.22 to$24.83.

If you have ever wanted to own an RV and flush with cash to go on along driving tour around the USA, the RV dealers right now willprobably cut you the deal of a lifetime.

Jon C. Ogg
November 4, 2008