Winnebago revenue shows weak discretionary spending

winnebago Ending the financial year with solid results Fourth-quarter profit beats expectations. Adjusted profit of $1.59 per share easily topped Wall Street expectations thanks to the recreational vehicle maker’s ability to effectively manage costs, production and inventory during the quarter.

But that masks a big problem for the company – weak discretionary spending.This is a challenge that spans multiple areas, from blue jeans to pizza deliverybecause high inflation weakens consumer vitality.

The company also reported revenue of $771 million on Wednesday, down nearly 35% from the same period last year. The company’s sales fell short of Wall Street expectations of $784 million, as sales in its RV division were significantly lower than consensus ($318 million vs. $355 million expected, according to StreetAccount).

Winnebago blamed “current market conditions and dealer efforts to reduce inventory and higher discounts and subsidies that resulted in lower unit sales.” RV sales were down 52% from the same period last year.

Price increases have not been enough to overcome weak demand.

Chief Executive Officer Michael Happe said: “Consumer markets continue to face challenges, and our fourth-quarter results reflect a stubborn retail environment.”

While the company didn’t give financial guidance, Happe said he expects these trends to continue into the first half of the new fiscal year. However, Happe is optimistic that inventories will return to normal and consumer demand will stabilize by the second half of the fiscal year.

Winnebago’s shares fell 3% on Wednesday and have fallen about 13% in the past three months, lagging far behind the broader market.competitors Sol Industries Shares also fell about 17% during the same period, reflecting challenging demand conditions across the industry.