Stock to watch: Thor Industries, Inc. (NYSE: THO)

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Thor Industries, Inc. (NYSE: THO) stock surged 15.78% on September 30th, 2019 (Source: Google finance) and is fighting hard to maintain its bullish momentum on 1st October, 2019 as the company posted mixed results for the fourth quarter of FY 19. Net income for the quarter grew to $92.1 million, from $88.2 million, in the same period a year ago.

But, North American Towable RV backlog decreased $73.8 million, or 9.6%, to $693.2 million, compared to $767.0 million at the end of fiscal 2018, reflecting independent dealers continuing to rationalize inventory levels. The Company believes the current towable RV backlog is more closely aligned with retail demand and continuing trends toward smaller, but more frequent, dealer order patterns. North American Motorized RV backlog decreased $175.2 million to $458.8 million from $634.1 million a year earlier, reflecting independent dealers continuing to rationalize inventory levels. The Company believes the current motorized RV backlog is reflective of a continuing return to a normalized level and the shift in dealer order patterns to smaller and more frequent orders. European RV backlog was $852.7 million as of July 31, 2019, reflecting current levels of demand within the European market.

THO in the fourth quarter of FY 19 has reported the adjusted earnings per share of $1.67, beating the analysts’ estimates for the adjusted earnings per share of $1.47, according to the FactSet consensus. The company had reported the adjusted revenue growth of 23.3 percent to $2.31 billion in the fourth quarter of FY 19, slightly missing the analysts’ estimates for revenue of $2.33 billion. North American Towable RV sales fell 18% to $1.16 billion, below the FactSet consensus of $1.21 billion, N/A motorized RV sales fell 8% to $387.4 million, above expectations of $357.2 million and Erwin Hymer Group (EHG) sales totaled $719.5 million, missing expectations of $767 million.

For fiscal 2020, the company expect to post strong top-line growth with the addition of a full year of net sales from EHG, but since the dealer inventory adjustment may continue through the first half of the fiscal year, the company’s outlook is for a flat to modest decline in the North American markets in the near-term, barring a significant macroeconomic change.

Meanwhile, EHG integration plan is proceeding, and the company had made measurable progress in a number of areas. The working capital management has already led to an increase in net cash provided by operating activities, which totaled more than $500 million in FY19, which the company had used to fund payments on the acquisition-related debt.

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