Motorized segment reported single-digit increases in sales, offset by lower margins. However, the company reported a 12.2% decline in its backlog due to capacity additions and better delivery times and expects the motorized recreational vehicle backlog to return to normalized levels going forward.
“Our third quarter results reflect another period of solid growth of both sales and earnings. While labor costs have moderated, we are experiencing inflationary price increases in certain raw material and commodity-based components due in large part to the headwinds created by the announcement and implementation of the steel and aluminum tariffs and other regulatory actions, as well as higher warranty costs,” said Bob Martin, Thor CEO.
Looking into the fourth quarter of 2018, Thor expects to see tougher comparisons on the top and bottom line results. Additionally, the company expects to bring wholesale and retail growth rates closer to parity by the end of 2018.
As for the long-term outlook, the company is seeing a strengthening trend of many new customers at a younger age adopting the recreational vehicle lifestyle and expects this growth to be sustainable in the long run.
Thor stock hasn’t had a positive trend through the year, though it touched an all-time high of $155 in January 2018. The stock fell 1.7% over the last one year, while plunged more than 36% since January. Post the earnings release the stock fell about 4%.