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Winnebago Industries is facing issues with its financial forecasting due to economic challenges.

Winnebago Industries is facing a challenge with its financial forecasting, telling investors that, in a historically cyclical industry, its plummeting sales are likely temporary — but, in a shaky economy, it isn’t sure when they will fully recover, according to an article by Kristin Broughton at the Wall Street Journal website. 

Winnebago, best known for making motor homes and camper vans, benefited from a surge in consumer spending on outdoor activities during the early days of the pandemic. But sales to retailers plummeted as concerns about Covid-19 waned and people spent more money on air travel and hotels. High-interest rates have also made purchases unaffordable for some buyers. During the quarter that ended Feb. 24, net revenue at the company fell 19% from a year earlier, to $703.6 million.

RV sales typically rise and fall with the economy. Winnebago’s business model is built to weather such downturns, even after RV shipments to retailers sank to the lowest point since 2012. Roughly 85% of the company’s costs are variable, meaning they can be quickly cut, Chief Financial Officer Bryan Hughes said. Over the past year, Winnebago cut its expenses by operating its production lines fewer than five days a week.

Any rebound in the company’s revenue will be largely tied to a stronger economy — and that is difficult to predict when many consumers are pessimistic and interest rates remain high.

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