Motorhome maker Winnebago Industries, Inc. have average selling price drop since the company sold low-priced Motorhomes during the fourth quarter, sending its shares to a drop by 7% to a 16-month low.
The company’s average selling price fell by 8.4% in the recent quarter as the company has been closely watched due to its view on big-discretionary products spending.
Randy Potts, company chief executive said the demand for high-end Motorhomes has become softer compared to the previous year, or two years ago.
Recreational vehicles of Winnebago range between $65,000 and $426,000.
Considering the hardly growing household income within the United States, investors have become overly concerned about the average selling price of Motorhomes, falling further within the next quarters, according to Morris Ajzenman, an analyst at Griffin Securities Inc.
U.S. personal income increased by 0.3% in August based on the Commerce Department data released last month.
The company had 302 order backlogs as of August 30. The order backlogs were the company’s most expensive Motorhomes, which was down by 50% from the previous year. Backlogs included orders to be shipped in the next 6 months, thus, Winnebago does not reveal its quarterly orders.
On Thursday, Sarah Nielsen, company Chief Financial Officer, said orders were stronger for the cheaper Motorhomes, which were ideal for families with young children. The backlog for cheaper Motorhomes was sold at $71,000 on average, and had an 8% increase.
Nielsen added that the company has been increasing investments in lower-priced Motorhomes, while expecting a hit next year on gross margins.
Winnebago’s net income increased to $12.9 million, which is equivalent to 48 cents per share during the fourth quarter, which ended August 30. A year earlier, net income was 38 cents a share or $10.6 million.
Company revenue rose about 15% to 245.9 million dollars. Based on Thomson Reuters, the average estimate profit of analysts was at 46 cents a share and $243.5 million revenue.