Thor Industries Inc (NYSE:THO) jumped 1.2 percent higher in after-hours trading yesterday, following the release of the recreational vehicle manufacturer’s fourth-quarter and fiscal 2016 financial results. The company posted earnings of $1.57 per share, which is nearly 15 percent higher than the consensus estimate – as analysts were anticipating $1.37 per share, on average.
The RV-seller brought in $1.29 billion in total revenue during the three-month period, which ended on July 31 – the highest quarterly revenue in the company’s history. Wall Street analysts were expecting $1.28 billion in revenue.
For the full fiscal year, Thor also broke its own sales record with $4.8 billion in revenue – more than 14 percent higher than last year’s figure. Earnings per share reached $4.91, which is both a record for Thor as well as a 29.6 percent increase year-over-year.
Gross profit margins grew to 15.9 percent during the 12-month period, up from 13.9 percent last year. Thor’s management team attributed this improvement to higher volumes, favorable changes in product variety and better material costs.
“The fourth quarter was the culmination of the strongest year in Thor’s history, with solid revenue and earnings growth generated by the tremendous efforts of our entire team augmented by strong industry conditions,” said Thor’s President and Chief Executive Officer, Bob Martin. “During the fourth quarter, we saw continued year-over-year industry growth in most product categories and were able to capitalize on opportunities to expand our production capacity and output to meet the growing demand for affordably priced travel trailers and motorhomes.”
Back in July, the company announced that it closed a deal to purchase Jayco Corporation, a Middlebury, Indiana-based company that makes RVs, camping trailers, travel trailers, fifth wheels, motorhomes and toy haulers. The deal was announced on July 1, but officially closed on July 30 – after Thor forked over $576 million in cash.
Jayco, which had a number of its own subsidiaries at the time of the acquisition, was absorbed as a wholly-owned subsidiary of Thor, while maintaining its existing management team. When the merger was announced, Thor told investors that its fiscal fourth-quarter revenue would include one full month of Jayco’s revenue.
Mr. Martin told shareholders yesterday that the integration of Jayco into the Thor group has been going smoothly, adding that the success of Jayco is a crucial element to its future growth path – as well as a “critical action item” within its strategy plan moving forward.
“In addition to the positive impacts from the Jayco acquisition, I see many positive signs for Thor and the RV industry, with opportunities for growth among a variety of consumer demographics, which should result in an expansion of our overall market,” Martin added.
Thor’s stock price has grown 47 percent this year-to-date, and – running up to yesterday’s closing price – the company’s common stock has appreciated by 61 percent in the past 12 months. The stock has an average rating of “Buy” with a price target of $88.13. Monday’s closing price was $82.74.
DISCLAIMER: The author does not hold any positions in any of the above companies.
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