Thor Industries (THO) Q2 Earnings & Revenues Beat Estimates

Thor Industries, Inc. (NYSE:THO) reported second-quarter fiscal 2018 (ended Jan 31, 2018) adjusted earnings of $1.92 per share, surpassing the Zacks Consensus Estimate of $1.82. Net income grew 4% to $79.8 million from $64.8 million in the prior-year quarter.

Revenues rose 24% year over year to $1.97 billion and also outpaced the Zacks Consensus Estimate of $1.9 billion.

Gross profit increased 27.7% to $270.3 million from $211.7 million in second-quarter fiscal 2017. The gross profit margin increased to 13.7% compared with 13.3% in the year-ago quarter, driven by strong production and process improvement, primarily by Jayco.

Thor Industries, Inc. Price, Consensus and EPS Surprise

Segment Results

Sales of Towable RVs went up 26.9% year over year to $1.08 billion. This upside was primarily driven by strong demand for its affordably-priced travel trailers. Pre-tax income shot up 49.7% to $116.7 million from $78 million in the comparable quarter last fiscal. Growth in the metric was backed by higher sales and improved gross margin plus decreased selling, general and administrative (SG&A) expenses.

Sales from Motorized RVs improved 17.9% to $559.9 million from $475 million in the year-ago quarter. The upside was driven by robust demand for its Class A and Class C motor-homes by dealers and end consumers. Pre-tax income from the segment surged 31.8% to $37.5 million from $28.5 million a year ago, driven by enhanced gross margins and operating efficiency.

Financial Position

Thor Industries had cash and cash equivalents of $109.8 million as of Jan 31, 2018, down from $134.7 million as of Jan 31, 2017. Long-term debt was $80 million as of Jan 31, 2018, compared with $325 million recorded in the prior-year quarter.

In the first six months of fiscal 2018, Thor Industries’ operating cash inflow increased to $56.8 million compared with $52.8 million during the same period in the previous fiscal.

The company incurred capital expenditures of $63,003 in the first six months of fiscal 2018 compared with $50,924 in the prior-year period.

Zacks Rank & Key Picks

Thor Industries has a Zacks Rank #3 (Hold). A few better-ranked stocks in the auto space are Honda Motor Co. Ltd. (NYSE:HMC) , Toyota Motor Corporation (NYSE:TM) and Genuine Parts Company (NYSE:GPC) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Honda has an expected long-term growth rate of 5.2%. In the last six months, shares of the company have gained 20.3%.

Toyota has an expected long-term growth rate of 5.8%. Shares of the company have gained 11.7% in the last six months.

Genuine Parts has an expected long-term growth rate of 6.6%. In the last six months, shares of the company have gained 6.8%.

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