Hot Stock to Track After Earnings: Thor Industries Inc. (NYSE:THO)

Thor Industries Inc. (NYSE:THO) reported earnings for the three months ended April 2016 on June 06, 2016. The company earned $1.51 per share on revenue of $1.28B. Analysts had been modeling earning per share of $1.43 with $1.29B in revenue.

Thor Industries Inc. (NYSE:THO) announced net income from continuing operations of $79.2 million, or $1.51 per diluted share, on revenues of $1.28 billion for the third quarter ended April 30, 2016.  Net income from continuing operations increased 24.6% on sales growth of 9.4% when compared with the third quarter of last year.  Diluted earnings per share from continuing operations in the third quarter increased 26.9% compared to the previous year.  Diluted earnings per share, including the loss from discontinued operations in the quarter, also rose 27.4% to $1.49 compared with the third quarter of 2015.

Third-Quarter Highlights:

  • Sales from continuing operations for the third quarter of fiscal 2016 were a record $1.28 billion, up 9.4% from $1.17 billion in the third quarter last year. Sales of towable and motorized RVs posted combined growth of 5.8%, which was supplemented by $41.9 million in net revenues from Postle Aluminum Co., which was acquired on May 1, 2015.
  • Gross profit margins increased to 15.7% in the third quarter compared to 14.2% in the prior-year period, due primarily to improved volumes, favorable changes in product mix and improvements in material costs compared to the prior year.
  • Net income from continuing operations for the third quarter was a record $79.2 million, up 24.6% from $63.6 million in the prior-year third quarter.
  • Diluted earnings per share (EPS) from continuing operations for the third quarter was a record $1.51, up 26.9% from $1.19 in the third quarter last year. Diluted earnings per share, including the loss from discontinued operations, was $1.49, up 27.4% from $1.17 in the third quarter last year.
  • Consolidated RV backlog on April 30, 2016 was $1.06 billion, up 45.4% from $726.8 million on April 30, 2015.
  • Total dealer inventory increased 1.0% to 82,100 units on April 30, 2016 from 81,300 units on April 30, 2015.
  • Thor’s total cash balances as of April 30, 2016 were $247.3 million.

Towable RVs:

  • Towable RV sales were $934.6 million for the third quarter, up 1.7% from $919.4 million in the prior-year period, driven primarily by increasing sales of lower-priced travel trailers partially offset by lower sales of fifth wheel units.
  • Towable RV income before tax was $96.9 million, up 15.7% from $83.8 million in the third quarter last year. This increase was driven primarily by favorable product mix and improved material costs.
  • Towable RV backlog increased 50.2% to $727.5 million, compared to $484.2 million at the end of the third quarter of fiscal 2015, reflecting the continued growth in the towable markets and strong acceptance of the Company’s products.

Motorized RVs:

  • Motorized RV sales were $307.6 million for the third quarter, up 20.7% from $254.9 million in the prior-year third quarter. The increase in motorized RV sales is a result of strong dealer and consumer response to new products, particularly more moderately priced Gas Class A and Class C motorhomes targeting new consumers entering the market combined with overall market growth.
  • Motorized RV income before tax was $24.1 million, up 21.5% from $19.9 million last year, driven primarily by the growth in motorized sales.
  • Motorized RV backlog increased 35.7% to $329.3 million from $242.6 million a year earlier, reflecting the continued strong reception, by dealers and consumers, to the new products introduced over the past year.

Thor Industries Inc. earnings per share showed an increasing trend of 15.3% for the current fiscal year. The company’s expected EPS growth rate for next fiscal year is 511%.Analysts project EPS growth over the next 5 years at 8.7%. It has EPS annual growth over the past 5 fiscal years of 12.8% when sales grew 12. It reported 9.4% sales growth, and 26.7% EPS growth in the last quarter.

The stock is trading at $66.3, up 40.72% from 52-week low of $47.56. The stock trades down -4.52% from its peak of $69.76 and % below the consensus price target of $73.88. Its volume clocked up at 0.64 million shares which is higher than the average volume of 0.49 million shares. Its market capitalization currently stands at $3.43B.

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