Winnebago Industries (WGO), the country’s largest maker of motor homes, is first in its class. With a leading market share, a pristine balance sheet, and an iconic name built over its 54-year history, Winnebago stands to gain as bullish demographics ahead hand it a growing customer base.
Things look stormy for the company over the short term, but the long term is bright. The issue for now is not the company but the U.S. economy. If things don't rebound in earnest this year, it will be difficult for Winnebago to increase sales.
Yet the recreational vehicle maker should benefit from changes in the U.S. population to come. Most RVs are bought by people aged 35 to 54, according to Morningstar. This age bracket, of course, is rising is number quickly. By 2030, the U.S. population older than 45 will expand by more than 30 million people, the Census Bureau estimates.
As of last year, 11.2 percent of 35- to 54-year-olds owned a motor home, up from 9 percent in 2005, and 8.5 percent of all U.S. households owned an RV, up from 8 percent, according to University of Michigan research.
Buying plans
Perhaps most importantly, 21 percent of all U.S. households plan to buy an RV, and 70 percent of current RV owners plan to buy another one at some point.
In addition, there’s a silver lining in high unemployment. Married people suffer much less joblessness than the general population, according to Morningstar. Ninety percent of Winnebago buyers are married.
Another positive statistic for Winnebago is that the typical household income for an RV owner is $68,000, according to the Recreational Vehicle Industry Association. The consumption habits of wealthy people are less affected by economic weakness, a fact which insulates Winnebago from the economy.
The company reported net income of $1 million in the quarter ended Nov. 26, down 74 percent from $3.8 million a year earlier. Revenue gained 7 percent to $131.8 million.
Of six analysts tracked by Thomson/First Call, two rate Winnebago shares a strong buy, and four rate it a hold.
The company next reports earnings March 15.
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