Hot Stock to watch: Winnebago Industries, Inc. (NYSE: WGO)

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Winnebago Industries, Inc. (NYSE: WGO) stock rose over 1.3% on 25th June, 2020 (as of 12:47 pm GMT-4 ; Source: Google finance) after the company posted better than expected results for the third quarter of FY 20. The company reported the net loss of $12.4 million in third quarter compared to net income of $36.2 million in the third quarter of last year. As of the end of the third quarter, the company had outstanding debt of $465 million. The cash on hand at the end of the quarter rose to $152.5 million, which was 24.4% higher than the pre-COVID February balance of $122 million.

Moreover, in the Towable segment, revenues declined by 46% to $189 million for the quarter from the prior year period, mainly due to the suspension of manufacturing and the disruption of consumer buying patterns related to the COVID pandemic. The appeal of the Grand Design and Winnebago-branded Towable products has allowed the company to outpace the industry and gain retail market share. The adjusted EBITDA margin of the segment was 8.7% in the third quarter, mainly due to deleverage and cost impacts related to COVID. Towable backlog for the third quarter rose approximately 87% in units over the prior year period, on back of strong rebound in dealer demand in May, since April was the period most impacted by COVID driven by strong retail sales recovery in May. For the third quarter Motorhome segment revenues grew by approximately 27% from the prior year period. Excluding Newmar, organic revenues fell approximately 28%. Motorhome backlog increased approximately 99% in units from the prior year driven by the addition of Newmar and a strong rebound in dealer demand in May.

WGO in the third quarter of FY 20 has reported the adjusted loss per share of 26 cents, beating the analysts’ estimates for the adjusted loss per share of 41 cents, according to Zacks Investment Research. The company had reported 23.9 percent decline in the adjusted revenue to $402.5 million in the third quarter of FY 20, beating the analysts’ estimates for revenue of $325.9 million. The company delivered the operating loss of $8.2 million for the third quarter compared to operating income of $49 million in the third quarter of 2019.

Additionally, the company has declared a quarterly cash dividend of $0.11 per share payable on July 1, 2020, to common stockholders of record at the close of business on June 17, 2020.

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