Call it a blessing, or a curse, but it is a time-tested fact that consumers in the United States are sensitive to the changing economic scenarios of the country. Now that the economic recovery is being reported in the news more than ever, American consumers are showing a revival in their confidence and the demand for luxury items is increasing.
Recreational Vehicles (RV) have a long history in the United States. The RV industry has its beginning in the 1920s and 1930s, right after the advent of the automobile industry. The RV lifestyle is made up of those people who are interested in travelling rather than living at the same place, and also those who are vacationing. RV sales have increased after the recessionary period as consumers are now willing to commit to large purchases like RVs. The industry includes several companies that are worth a closer look. Thor Industries, Inc. (NYSE:THO)
and Winnebago Industries, Inc. (NYSE:WGO)
are two companies in the RV industry that have caught my attention. Polaris Industries Inc. (NYSE:PII)
is an American snowmobile and ATV manufacturer; however, demand for its products is also affected by the increase in recreational activities, much like that of the RV companies.
Thor Industries, Inc. (NYSE:THO)’s commanding position
Thor Industries, Inc. (NYSE:THO)’s commanding position makes it the largest producer of RVs in the world. The company has been profitable for the last 30 years. Amazingly, its business model allowed it to report a small profit in 2009, when other companies were going off the cliff and reporting huge losses because of the financial meltdown. The company manufactures various types of RVs, small and mid-sized busses, and parts for its products. The company reported record sales of $ 3.1 billion in the year ended 2012.
The majority of the company’s revenues come from the towable RV segment. The company’s sales and earnings have continued to increase in 3Q13 (the company’s fiscal year ends July 31.) Thor Industries, Inc. (NYSE:THO) sold off its ambulance manufacturing company in May 2013 in order to focus on its RV and bus segments. The company’s financial performance has never been better, and I expect it to show robust growth in the quarters to come.
Winnebago Industries, Inc. (NYSE:WGO)’s successful niche
Winnebago Industries, Inc. (NYSE:WGO), though small, is a direct competitor of Thor Industries, Inc. (NYSE:THO), that specializes in the production of motorhomes. For 3Q13, the company reported a mind boggling increase in its financial performance. On a YoY basis, the company’s revenues and net income increased by 40.1% and 94.4% respectively.