Thor Earnings: Fiscal 2024 Starts With No Surprises in First Quarter

We are raising our Thor Industries fair value estimate to $141 from $139 on the time value of money after the firm reported fiscal 2024 first-quarter results that maintained guidance while diluted EPS of $0.99 (down 60.9% year over year) beat the $0.98 Refinitiv consensus. Management has stressed a focus on profitability over volume and that showed in the results with revenue down 19.5% and unit deliveries falling 9.5%. North American towable and motorized deliveries fell by 13% and 31.5%, respectively, but the European segment grew volume 19.5% and swung to a profit from a loss a year ago. Europe saw higher pricing, including a 10-percentage-point revenue growth contribution from foreign currency translation as well as improvement in chassis availability, which the industry struggled with last year. Thor expects its European dealers to be at normalized levels for most brands by the end of fiscal second quarter, so we don’t expect robust first-quarter European growth to last for all fiscal 2024. Europe’s Oct. 31 backlog of $3.3 billion now makes up the majority of Thor’s total backlog of $5.4 billion and total backlog fell 27.8% from October 2022 and by 70.3% from October 2021.