Winnebago 4Q23: Thesis Update (incl. Excel workbook)
This earnings release supports that we are close to a cyclical bottom. Once the company has turned the corner, earnings might spike making the unambitious valuation even more absurd.
On October 18, 2023, Winnebago released their 4Q23 earnings (they have a funny fiscal year ending in August).
In early September, I published a bullish thesis on the stock arguing that this is a highly asymmetric opportunity given the business is proving remarkably resilient versus stiff macro headwinds. It is very unambitiously valued even based on cyclically depressed earnings. They will continue to benefit from positive shifts in consumer preferences and demographics. And as icing on the cake, the stock is heavily shorted with limited trading volume. This article is an update on that thesis. I have also updated the financials in the attached workbook
Top-line
Industry
The current cyclical trough in the RV industry easily rivals the Great Recession 15 years ago. In 2020/21, RV demand surged due to lockdowns and low interest rates. That has temporary saturated the market. It was followed by the sharpest upward impulse that we have ever seen in interest rates which makes the purchase of a $200,000 motorhome quite unattractive.