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Thor Industries(THO-N)

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Why Thor Industries Stock Jumped Today

Motley Fool - Tue Jun 6, 2023

What happened

Shares of Thor Industries (NYSE: THO) were moving higher today after the RV manufacturer posted better-than-expected results in its third-quarter earnings report.

The stock was up 17.6% as of 3:12 p.m. ET.

So what

Thor, which is the parent of Airstream and other RV brands, posted a decline in sales and profits as the boom in RVs during the pandemic rolled off, but it still beat analyst estimates.

Revenue in the quarter fell 37.1% to $2.93 billion, beating estimates at $2.83 billion.

Gross margin in the quarter was 14.8%, a 250-basis-point decline, and earnings per share fell from $6.32 to $2.24, though that was still well ahead of estimates at $1.07.

While sales in North America were down sharply, the company saw growth in Europe, with sales up 20% to $866.7 million. That growth was driven by an increase in price and a change in product mix, as units sold were nearly flat.

CEO Bob Martin said: "Market conditions continue to be challenging as dealers and consumers face increasing pressures from the macro environment. In this difficult setting, we remain focused on executing our business model that enables us to quickly adapt to market conditions."

Now what

Thor also adjusted its guidance for the full year to reflect better-than-expected results in the third quarter but a reduction in production volumes for the fourth quarter due to changing production for the model year 2024.

As a result, it now sees revenue of $10.5 billion to $11 billion, down from a previous range of $10.5 billion to $11.5 billion, and it expects earnings per share of $5.80 to $6.50, up from a prior range of $5.50 to $6.50.

Those forecasts compare to the analyst consensus at $10.96 billion in revenue and earnings per share of $5.64.

Thor now trades at a forward P/E of 15 based on this year's forecast, and analysts expect profits to rebound next year, meaning this could be a good buying opportunity for this cyclical stock.

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Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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