Winnebago Industries Inc Q1 2026 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Craig Kennison - Robert W. Baird & Co Inc - Analyst : Mike, a lot of optimism building around the 2026 retail consumer driven by lower rates and tax policy. What signals are you looking for to ascertain whether your end markets might grow for the first time since the pandemic?

Question: Craig Kennison - Robert W. Baird & Co Inc - Analyst : And if I could, on a follow-up. I know you've got some affordable units in the market now that chase a new price point in a new consumer. But I'm wondering if you can look at your portfolio of customers today and wonder -- I guess I'm wondering when we might see an upgrade cycle. It feels like that has been deferred much like the housing market, but you should be pretty well positioned as consumers look for higher quality. And I'm wondering if you're seeing any of that in your checks or data. LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 19, 2025 / 3:00PM, WGO.N - Q1 2026 Winnebago Industries Inc Earnings Call

Question: Joe Altobello - Raymond James - Analyst : First question on the Towable business. It looks like incremental margins we're pretty light this quarter. I think revenue was up almost $40 million. Year-over-year, operating income was up about $2 million. I know you guys called out higher warranty expense, but what were the big driver or drivers of that? Bryan Hughes - Winnebago Industries Inc - Chief Financial Officer, Senior Vice President - Finance, IT and Strategic Planning Yes. Joe, this is Bryan. Warranty was certainly one of the drivers. We continue to have some mix that we are seeing as headwinds as well. I'd say those are the primary drivers. Down at this level of volume, a lot of the equation is leverage. We did have growth, as you pointed out, which contributed favorably. But overall, I think those are the drivers. It's mix, and it is that higher warranty expense.

Question: Tristan Thomas-Martin - Bank of Montreal - Analyst : You guys shift in the above retail during the quarter tied to new products. How should we think about that retail wholesale relationship in the rest of the year?

Question: Tristan Thomas-Martin - Bank of Montreal - Analyst : Okay. And this isn't necessarily a directly related follow-up. But just -- you mentioned a couple of times some of the operational margin improvement initiatives you've done. My understanding is a lot of that's on the Motorized side. So could you maybe just give an update on everything you've done and how much more there is to come and kind of what you're doing? LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 19, 2025 / 3:00PM, WGO.N - Q1 2026 Winnebago Industries Inc Earnings Call

Question: Mike Albanese - Benchmark StoneX. - Analyst : Nice to see some momentum in the business here. Just quickly on Grand Design Motor, could you just comment on where you're tracking relative to your expectations as it relates to kind of that initial $100 million dealer stock?

Question: Mike Albanese - Benchmark StoneX. - Analyst : That's great context. Just a quick follow-up, that initial stock if you will, for some of these new models. I mean, how would you frame the opportunity size relative to the original linage that came out? I'm just trying to think about growth here as new models are implemented.

Question: Mike Albanese - Benchmark StoneX. - Analyst : Fair enough. And then just another quick one, if I may. I just want to follow up on mix shift. Obviously, you have some selective price increases. You come out with new models across the board to kind of meet consumers where they're at from an affordability standpoint. Just taking a step back here and thinking about the overall mix shift from the consumer, they've obviously, over the last couple of years, have gravitated towards those value products. I mean, are we still moving in that direction? Or has that kind of stabilized? And again, that's a little more industry-specific than company-specific because you have some initiatives that are obviously affecting mix shift within your portfolio but.

Question: Bret Jordan - Jefferies LLC - Analyst : Pretty much everything has been asked. But I guess one macro question. When you think about your forecast for '26, what is the assumption on sort of a rate backdrop? And what kind of Fed move would make you either more positive or negative on that outlook? Bryan Hughes - Winnebago Industries Inc - Chief Financial Officer, Senior Vice President - Finance, IT and Strategic Planning Yes. Bret, this is Bryan. We hesitate to draw too much correlation to Fed action. We are anticipating from a macro perspective, another two three 25-point cuts over the next year. I think that that's the prevailing expectation and how the bond market is priced out right now. What happens to the 10-year, as I think you know, Bret, is probably more important for our industry as it relates to floor plan financing costs as well as retail financing. So we'll keep a close eye on that. There's different points of view, I think, as to what will happen with the 10-year rate as it relates to the correlation between that and the Fed funds rate. But that's kind of how we're thinking about it right now.

Question: Noah Zatzkin - KeyBanc Capital Markets Inc - Analyst : I guess first, just on the margin recapture initiatives at Winnebago Motorhomes. You touched on this a bit, but any way to like quantify kind of the magnitude of those initiatives on the improvement in Motorized margins in the quarter? And then just kind of thinking through like where you are maybe like in terms of innings or opportunity that's kind of left from a margin perspective structurally moving forward? Any thoughts would be helpful.

Question: Noah Zatzkin - KeyBanc Capital Markets Inc - Analyst : That's really helpful. And maybe just one more. Thinking about this from an industry perspective, I think Motorized shipments have been kind of stronger at least year-over-year overall for the industry of late. When you think about kind of inventory levels there for the industry as well as drivers of that, is that more that, that levels kind of got lower than ideal? Or what's kind of driven that pop? I know for you guys, part of that obviously is the new product, but more broadly?

Question: John Healy - Northcoast Research - Analyst : I want to ask one about the kind of the margin outlook in the business and how it ties into environment we're in. Mike, I know you've mentioned numerous times on the call that you guys are working on sourcing, working with your suppliers, you're doing all the things that we would expect it to. But I was curious if there's been any development in terms of tying cost and input costs to the actual tariff environment? Have you been able to develop any sort of linkage? So theoretically, if we do get some relief on tariffs and maybe certain ones kind of go to the wayside in calendar '26, is there any sort of kind of automatic kind of indexed type relief that you would get? Or is this going to be a situation where you have to go back and try to price some dollars out of things? And hypothetically, is there a view with your suppliers that, hey, we need to maybe share more of this or work with more of this than there was six months ago just to impact and solve this affordability issue? Because when I listened to calls of your industry, everyone talks about affordability and interest rates, but it seems like there could be more give back with the suppliers and the sourcing community. So I was hoping to hear your thoughts on that.

Question: David Whiston - Morningstar Inc - Analyst : Just one question for me. It's on the success drivers slide. You talked about Newmar having competitive in some lower-priced segments. Are we talking just a new product there? Or are you actually talking about the price reductions because that's a luxury brand, you don't have a lot of leeway to cut pricing there?