Q1 2026 Winnebago Industries Inc Earnings Call

December 19, 2025

Speaker #1: Welcome to the Winnebago Industries first quarter fiscal 2026 financial results conference call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session.

Operator: Welcome to the Winnebago Industries Q1 FY2026 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. Please be advised that today's conference call is being recorded. I would now like to hand the call over to Joanne Undala, Vice President, Treasury and Investor Relations. Ms. Undala, please go ahead.

Speaker #1: Please be advised that today's conference call is being recorded. I would now like to hand the call over to Joanne Ondala, Vice President, Treasury and Investor Relations.

Speaker #1: Ms. Ondala, please go ahead.

Speaker #2: Thank you, Operator. Good morning, everyone, and thank you for joining us to discuss our fiscal 2026 first quarter results. This call is being broadcast live on our website at investor.wgo.net, and the replay of the call will be available on our website later today.

Joanne Undala: Thank you, Operator. Good morning, everyone, and thank you for joining us to discuss our F2026 Q1 results. This call is being broadcast live on our website at investor.wgo.net, and the replay of the call will be available on our website later today. The news release with our Q1 results was issued and posted to our website earlier this morning. Please note that the earnings slide deck that follows along our prepared remarks is also available on the investor section of our website under Quarterly Results. Turning to slide two, certain statements made during today's conference call regarding Winnebago Industries and its operations may be considered forward-looking statements under securities law.

Joan Ondala: Thank you, Operator. Good morning, everyone, and thank you for joining us to discuss our F2026 Q1 results. This call is being broadcast live on our website at investor.wgo.net, and the replay of the call will be available on our website later today. The news release with our Q1 results was issued and posted to our website earlier this morning. Please note that the earnings slide deck that follows along our prepared remarks is also available on the investor section of our website under Quarterly Results. Turning to slide two, certain statements made during today's conference call regarding Winnebago Industries and its operations may be considered forward-looking statements under securities law.

Speaker #2: The news release with our first quarter results was issued and posted to our website earlier this morning. Please note that the earnings slide deck that follows along with our prepared remarks is also available on the investor section of our website and our quarterly results.

Speaker #2: During slide two, certain statements made during today's conference call regarding Winnebago Industries and its operations may be considered forward-looking statements under securities law. The company cautions you that forward-looking statements involve a number of risks and are inherently uncertain, and a number of factors—many of which are beyond the company's control—could cause the actual results to differ materially from these statements.

Joanne Undala: The company cautions you that forward-looking statements involve a number of risks and are inherently uncertain, and a number of factors, many of which are beyond the company's control, could cause the actual results to differ materially from these statements. These factors are identified in our SEC filing, which we encourage you to read. In addition, on today's call, management will refer to GAAP and non-GAAP financial measures. The reconciliation of the non-GAAP measures to the comparable GAAP measures is available in our earnings press release. Please turn to slide three. Hosting today's call are Michael Happe, President and Chief Executive Officer of Winnebago Industries, and Brian Hughes, Senior Vice President and Chief Financial Officer. Michael will begin with an overview of our Q1 performance as well as a forward view of the market. Brian will discuss the associated drivers of our financial results and our updated FY26 guidance.

The company cautions you that forward-looking statements involve a number of risks and are inherently uncertain, and a number of factors, many of which are beyond the company's control, could cause the actual results to differ materially from these statements. These factors are identified in our SEC filing, which we encourage you to read. In addition, on today's call, management will refer to GAAP and non-GAAP financial measures. The reconciliation of the non-GAAP measures to the comparable GAAP measures is available in our earnings press release. Please turn to slide three. Hosting today's call are Michael Happe, President and Chief Executive Officer of Winnebago Industries, and Bryan Hughes, Senior Vice President and Chief Financial Officer. Michael will begin with an overview of our Q1 performance as well as a forward view of the market. Bryan will discuss the associated drivers of our financial results and our updated FY26 guidance.

Speaker #2: Factors are identified in our SEC filings, which we encourage you to read. In addition, on today's call, management will refer to GAAP and non-GAAP financial measures.

Speaker #2: The reconciliation of the non-GAAP measures to the comparable GAAP measures is available in our earnings press release. Please turn to slide three. Today's call will be led by Michael Happe, President and Chief Executive Officer of Winnebago Industries, and Bryan Hughes, Senior Vice President and Chief Financial Officer.

Speaker #2: Michael will begin with an overview of our first-quarter performance, as well as a forward view of the market. Bryan will discuss the associated drivers of our financial results and an updated fiscal year 2026 guidance.

Speaker #2: Michael will conclude our prepared remarks, and then management will be happy to take your questions. With that, please turn to slide four as I hand the call.

Joanne Undala: Michael will conclude our prepared remarks, and then management will be happy to take your questions. With that, please turn to slide four as I hand the call over to Mike.

Michael will conclude our prepared remarks, and then management will be happy to take your questions. With that, please turn to slide four as I hand the call over to Mike.

Speaker #3: Thank you,

Michael J. Happe: Thank you, Joanne, and good morning, everyone. Winnebago Industries posted strong top and bottom-line results in Q1, performing ahead of our expectations and advancing meaningfully on our priorities. Revenue increased in all three segments, with operating profitability higher in both our motorhome and towable RV businesses. Marine segment results in Q1 were just slightly below prior year, which we view favorably given the continued softness in the industry. We entered F2026 with a disciplined plan and a pragmatic view of industry demand conditions. Our Q1 performance reflected steady execution against our controllables, product innovation, operational efficiency, and brand expansions, while navigating a macroeconomic backdrop that remains mixed. Although the recent rate relief from the Fed may be a positive development for consumers, as outlined during our year-end earnings call, our financial outlook remains firmly anchored in the strategic levers within our business and is not solely reliant on industry growth.

Michael Happe: Thank you, Joanne, and good morning, everyone. Winnebago Industries posted strong top and bottom-line results in Q1, performing ahead of our expectations and advancing meaningfully on our priorities. Revenue increased in all three segments, with operating profitability higher in both our motorhome and towable RV businesses. Marine segment results in Q1 were just slightly below prior year, which we view favorably given the continued softness in the industry. We entered F2026 with a disciplined plan and a pragmatic view of industry demand conditions. Our Q1 performance reflected steady execution against our controllables, product innovation, operational efficiency, and brand expansions, while navigating a macroeconomic backdrop that remains mixed. Although the recent rate relief from the Fed may be a positive development for consumers, as outlined during our year-end earnings call, our financial outlook remains firmly anchored in the strategic levers within our business and is not solely reliant on industry growth.

Speaker #3: Joanne: And good morning, everyone. Winnebago Industries—over to Mike. We posted strong top and bottom line results in the first quarter, performing ahead of our expectations and advancing meaningfully on our priorities.

Speaker #3: Revenue increased in all three segments, with operating profitability higher in both our motorhome and towable RV businesses. Marine segment results in Q1 were just slightly below the prior year.

Speaker #3: Which we view favorably, given the continued softness in the industry. We entered fiscal 2026 with a disciplined plan and a pragmatic view of industry demand conditions.

Speaker #3: Performance reflected steady execution against our Q1 controllables: product innovation, operational efficiency, and brand expansions, while navigating a macroeconomic backdrop that remains mixed. Although the recent rate relief from the Fed may be a positive development for consumers, as outlined during our year-end earnings call, our financial outlook remains firmly anchored in the strategic levers within our business.

Speaker #3: And is not solely reliant on industry growth. In our towable RV segment, affordability continues to shape buying power. We are aggressively leaning into the shift towards lower-priced products with models including the Transcend series, Imagine, and Reflection 100 from Grand Design, which enable families to enjoy the outdoors in a great travel trailer that combines quality and value.

Michael J. Happe: In our towable RV segment, affordability continues to shape buying power. We are aggressively leaning into the shift towards lower-priced products with models including the Transcend Series, Imagine, and Reflection 100 from Grand Design, which enable families to enjoy the outdoors in a great travel trailer that combines quality and value. Winnebago's new Thrive is proving to be an exceptionally popular entry-level travel trailer among consumers whose RV journey is just getting started. While our recent share position in towables has room for growth, we are appropriately prioritizing profitability, stronger product value, and our dual-branded strategy. The transformation underway at Winnebago Towables is designed to give us a second strong brand and access to a higher quality and quantity of dealers in that category, an initiative we believe will lead to meaningful share growth over time.

In our towable RV segment, affordability continues to shape buying power. We are aggressively leaning into the shift towards lower-priced products with models including the Transcend Series, Imagine, and Reflection 100 from Grand Design, which enable families to enjoy the outdoors in a great travel trailer that combines quality and value. Winnebago's new Thrive is proving to be an exceptionally popular entry-level travel trailer among consumers whose RV journey is just getting started. While our recent share position in towables has room for growth, we are appropriately prioritizing profitability, stronger product value, and our dual-branded strategy. The transformation underway at Winnebago Towables is designed to give us a second strong brand and access to a higher quality and quantity of dealers in that category, an initiative we believe will lead to meaningful share growth over time.

Speaker #3: Winnebago's new Thrive is proving to be an exceptionally popular entry-level travel trailer among consumers whose RV journey is just getting started. While our recent share position in towables has room for growth, we are appropriately prioritizing profitability and stronger product value, and our dual-branded strategy.

Speaker #3: The transformation underway at Winnebago Towables is designed to give us a second strong brand and access to a higher quality and category. An initiative we, and a quantity of dealers, believe will lead to meaningful share growth over time.

Speaker #3: On the motorhome RV side, we've grown our share in Class A gas, Class A diesel, and Class C over the most recent multi-month periods ending October 31.

Michael J. Happe: On the motorhome RV side, we've grown our share in Class A gas, Class A diesel, and Class C over the most recent multi-month periods ending October 31. For many motorhome RV buyers, the priorities versus other RV types are greater convenience, premium amenities, reliable power, and, more than ever, integrated technology. Our luxury Newmar brand and Grand Design motorhome's rapidly growing Lineage series are hitting those sweet spots. The business refresh initiatives taking shape at our flagship Winnebago motorhomes business further strengthen that brand as a third pillar of our motorized RV strategy. When you consider that over the trailing 12 months as a premium-branded OEM, we have achieved 33.9% share in Class A diesel, 21.4% share in Class B, 13.7% share in Class C, and 12.3% share in Class A gas.

On the motorhome RV side, we've grown our share in Class A gas, Class A diesel, and Class C over the most recent multi-month periods ending October 31. For many motorhome RV buyers, the priorities versus other RV types are greater convenience, premium amenities, reliable power, and, more than ever, integrated technology. Our luxury Newmar brand and Grand Design motorhome's rapidly growing Lineage series are hitting those sweet spots. The business refresh initiatives taking shape at our flagship Winnebago motorhomes business further strengthen that brand as a third pillar of our motorized RV strategy. When you consider that over the trailing 12 months as a premium-branded OEM, we have achieved 33.9% share in Class A diesel, 21.4% share in Class B, 13.7% share in Class C, and 12.3% share in Class A gas.

Speaker #3: For many motorhome RV buyers, the priorities versus other RV types are greater convenience, premium amenities, reliable power, and, more than ever, integrated technology. Our luxury Newmar brand and Grand Design motorhomes' rapidly growing Lineage series are hitting those sweet spots.

Speaker #3: Refresh initiatives taking shape at our flagship Winnebago motorhomes business further strengthen that business brand as a third pillar of our motorized RV strategy.

Speaker #3: When you consider that, over the trailing twelve months, as a premium branded OEM, we have achieved 33.9% share in Class A diesel, 21.4% share in Class B, 13.7% share in Class C, and 12.3% share in Class A gas.

Speaker #3: We are a formidable and well-diversified player in a dollar-weighted segment we believe will gain momentum as market conditions improve. The right side of slide four highlights several products that contributed to our Q1 performance, including the Cabrio from Barletta, which had strong retail in the first quarter.

Michael J. Happe: We are a formidable and well-diversified player in a dollar-weighted segment we believe will gain momentum as market conditions improve. The right side of slide 4 highlights several products that contributed to our Q1 performance, including the Cabrio from Barletta, which had strong retail in Q1. Barletta continues to grow its position in the US aluminum pontoon space, ranking as the third brand by market share in the segment. From a financial perspective, we've made outstanding progress over the past two quarters, strengthening our balance sheet, reducing our net leverage ratio, and driving positive operating cash flow. Q1 is a seasonally tougher cash generation period historically, and I am very pleased with our balance sheet standing going into calendar 2026. Brian will provide more details on that shortly.

We are a formidable and well-diversified player in a dollar-weighted segment we believe will gain momentum as market conditions improve. The right side of slide 4 highlights several products that contributed to our Q1 performance, including the Cabrio from Barletta, which had strong retail in Q1. Barletta continues to grow its position in the US aluminum pontoon space, ranking as the third brand by market share in the segment. From a financial perspective, we've made outstanding progress over the past two quarters, strengthening our balance sheet, reducing our net leverage ratio, and driving positive operating cash flow. Q1 is a seasonally tougher cash generation period historically, and I am very pleased with our balance sheet standing going into calendar 2026. Bryan will provide more details on that shortly.

Speaker #3: Barletta continues to grow its position space, ranking as the number three U.S. aluminum pontoon brand by market share in the segment. From a financial perspective, we've made outstanding progress over the past two quarters, strengthening our balance sheet, reducing our net leverage ratio, and driving positive operating cash flow.

Speaker #3: It is a seasonally tougher cash generation period historically, and I am very pleased with our balance sheet Q1 standing, going into calendar 2026. Bryan will provide more details on that shortly.

Speaker #3: Looking at key RV retail trends on slide five, based on preliminary SSI data, industry RV retail registrations declined 7.6% year-over-year in October, before final adjustments.

Michael J. Happe: Looking at key RV retail trends on slide 5, based on preliminary FSI data, industry RV retail registrations declined 7.6% year-over-year in October before final adjustments, following a 2.2% net increase in the prior month. Keep in mind, gross monthly numbers are frequently adjusted upward as additional states report. On the wholesale side, North America RV unit shipments totaled just over 30,000 units in October. This is down about 1% from prior year, although on a calendar year-to-date basis, shipments are up about 4% higher. Specifically, towable unit shipments were down about 3% for the month and 4% higher for the calendar year-to-date period. Motorhome unit shipments grew nearly 13% in October and posted a growth rate of 3.5% calendar year-to-date.

Looking at key RV retail trends on slide 5, based on preliminary FSI data, industry RV retail registrations declined 7.6% year-over-year in October before final adjustments, following a 2.2% net increase in the prior month. Keep in mind, gross monthly numbers are frequently adjusted upward as additional states report. On the wholesale side, North America RV unit shipments totaled just over 30,000 units in October. This is down about 1% from prior year, although on a calendar year-to-date basis, shipments are up about 4% higher. Specifically, towable unit shipments were down about 3% for the month and 4% higher for the calendar year-to-date period. Motorhome unit shipments grew nearly 13% in October and posted a growth rate of 3.5% calendar year-to-date.

Speaker #3: Following a 2.2% net increase in the prior month. Keep in mind, gross monthly numbers are frequently adjusted upward as additional states report. On the wholesale side, North American RV unit shipments totaled just over 30,000 units from the prior year, although on an October.

Speaker #3: are up about 4% higher. Specifically, towable unit shipments were down about 3% for the month, and up 4% for the calendar year-to-date period. Motorhome unit shipments grew nearly—this is down about 1%—with a growth rate of 13% in October, and posted a 3.5% calendar year-to-date.

Speaker #3: Based on through October, for calendar year 2025, we, using RVIA's wholesale industry shipment data, are revising our industry forecast upward to a range of 335,000 units.

Michael J. Happe: Based on RVIA's wholesale industry shipment data through October for calendar year 2025, we are revising our industry forecast upward to a range of 335,000 to 345,000 units, or a midpoint of 340,000 units, compared to our prior midpoint of 330,000 units. Our updated forecast essentially aligns with RVIA's current midpoint projection of 339,700 units for calendar year 2025. Now, for calendar year 2026, we continue to expect North American RV wholesale shipments in the range of 315,000 to 345,000 units. Our midpoint of 330,000 units for 2026 is 5.5% lower than RVIA's current midpoint estimate, but more optimistic than some industry peers. We do expect the RV retail market to stabilize in the back half of our fiscal year. Inventory turns were 1.8 times in Q1, reflecting the seasonal shipment dynamics and dealer demand for our new products.

Based on RVIA's wholesale industry shipment data through October for calendar year 2025, we are revising our industry forecast upward to a range of 335,000 to 345,000 units, or a midpoint of 340,000 units, compared to our prior midpoint of 330,000 units. Our updated forecast essentially aligns with RVIA's current midpoint projection of 339,700 units for calendar year 2025. Now, for calendar year 2026, we continue to expect North American RV wholesale shipments in the range of 315,000 to 345,000 units. Our midpoint of 330,000 units for 2026 is 5.5% lower than RVIA's current midpoint estimate, but more optimistic than some industry peers. We do expect the RV retail market to stabilize in the back half of our fiscal year. Inventory turns were 1.8 times in Q1, reflecting the seasonal shipment dynamics and dealer demand for our new products.

Speaker #3: Or a midpoint of 345,000 to 340,000 units, compared to our prior midpoint of 330,000 units. Our updated forecast essentially aligns with RVIA's current midpoint projection of 339,700 units for 2025.

Speaker #3: Our midpoint is 345,000 to 340,000 units, compared to our prior midpoint of 330,000 units. Our updated forecast essentially aligns with RVIA's current midpoint projection of 339,700 units for the calendar year. Now, for calendar year 2026, we continue to expect North American RV wholesale shipments in the range of 345,000 units.

Speaker #3: Our 315,000 to midpoint of 330,000 units for 2026 is 5.5% lower than RVIA's current midpoint optimistic, than some industry peers. We do expect estimate.

Speaker #3: Fiscal, the RV retail market to year. Inventory turns were stabilized in the back half of our 1.8 times in the first quarter, reflecting the seasonal shipment dynamics and dealer demand for our new products.

Michael J. Happe: Specifically, we are seeing dealer stocking orders on Grand Design motorhome and Winnebago towables as the channel embraces these new lineups. As noted on our year-end call, we are targeting two turns across all of our businesses generally as a yardstick to measure consistent growth and operational efficiency. This number will be dictated largely by dealer behavior and the rhythm of key business initiatives. Moving to the marine segment on slide 6, sales improved modestly in Q1. Amid ongoing headwinds for the industry, our Barletta and Chris-Craft brands continued to demonstrate disciplined inventory management and strong dealer relationships. Both brands saw positive retail momentum coming out of the 2025 Fort Lauderdale International Boat Show and received solid dealer orders from their fall dealer meetings. The customer reception to Chris-Craft's Sportster Series and the new Catalina 31 has been fantastic.

Specifically, we are seeing dealer stocking orders on Grand Design motorhome and Winnebago towables as the channel embraces these new lineups. As noted on our year-end call, we are targeting two turns across all of our businesses generally as a yardstick to measure consistent growth and operational efficiency. This number will be dictated largely by dealer behavior and the rhythm of key business initiatives. Moving to the marine segment on slide 6, sales improved modestly in Q1. Amid ongoing headwinds for the industry, our Barletta and Chris-Craft brands continued to demonstrate disciplined inventory management and strong dealer relationships. Both brands saw positive retail momentum coming out of the 2025 Fort Lauderdale International Boat Show and received solid dealer orders from their fall dealer meetings. The customer reception to Chris-Craft's Sportster Series and the new Catalina 31 has been fantastic.

Speaker #3: We are seeing dealer stocking orders on Grand Design motorhomes and Winnebago Towables, as the buy more channel embraces these new lineups. As noted on our year-end call, we are targeting two turns across all of our businesses generally, as a yardstick to measure consistent growth and operational efficiency.

Speaker #3: This number will be dictated largely by dealer behavior, and the rhythm of key business initiatives. Moving to the marine segment on slide quarter. Amid ongoing headwinds for the industry, our Barletta and Chris-Craft brands continued to demonstrate disciplined inventory management and strong dealer relationships. Sales improved modestly in the first quarter.

Speaker #3: Both brands saw positive retail momentum coming out of the 2025 Fort Lauderdale International Boat Show, and received solid dealer orders from their fall dealer meetings.

Speaker #3: The customer reception to Chris-Craft's Sportster series and the new Catalina 31 has been fantastic. Barletta has received accolades for its model year 2026 offerings.

Michael J. Happe: Barletta has received accolades for its model year 2026 offerings, including its industry-exclusive TEC cover, which has been well-received as a practical solution that simplifies the ownership experience. Dealer feedback has reinforced that this innovation addresses a real customer need and reflects our focus on thoughtful, owner-centric design. For the trailing 12 months ended October 31, Barletta expanded its share of the aluminum pontoon segment in the US by 30 basis points to 9.1% and has seen even stronger recent retail share results on a monthly standalone basis. Turning to slide 7, our Winnebago, Newmar, and Grand Design brands earned multiple top honors for the 2026 model year from leading RV industry publications.

Barletta has received accolades for its model year 2026 offerings, including its industry-exclusive TEC cover, which has been well-received as a practical solution that simplifies the ownership experience. Dealer feedback has reinforced that this innovation addresses a real customer need and reflects our focus on thoughtful, owner-centric design. For the trailing 12 months ended October 31, Barletta expanded its share of the aluminum pontoon segment in the US by 30 basis points to 9.1% and has seen even stronger recent retail share results on a monthly standalone basis. Turning to slide 7, our Winnebago, Newmar, and Grand Design brands earned multiple top honors for the 2026 model year from leading RV industry publications.

Speaker #3: Including its industry-exclusive TEC cover, which has been well received as a practical solution that simplifies the ownership experience. Dealer feedback has reinforced that this innovation addresses a real customer need through thoughtful, owner-centric design.

Speaker #3: For the trailing twelve months ended October 31st, Barletta expanded its share of the aluminum pontoon segment in the U.S. by 30 basis points, to 9.1%.

Speaker #3: And has seen even stronger recent retail share results on a monthly standalone basis. Turning to slide seven, our Winnebago brands earned multiple top honors for the Newmar and Grand Design 2026 model year, from leading RV industry publications.

Speaker #3: These include RV of the Year awards across several categories, top debut recognition for standout models like Freedom Air and Sunflyer, best new models for Thrive and Foundation, Editor's Picks for Supreme Air, and Innovation of the Year for Grand Design's Lineage Shower System.

Michael J. Happe: These include RV of the Year awards across several categories, top debut recognition for standout models like Freedom Air and Sunflyer, best new models for Thrive and Foundation, editors' picks for Supreme Air, and innovation of the year for Grand Design's Lineage shower system. These accolades and many more reflect our relentless focus on innovation, quality, and delivering exceptional experiences for every traveler. In addition, our Grand Design and Newmar businesses both received Dealer Satisfaction Index awards this past November. Chris-Craft and Barletta received Industry Customer Satisfaction Index awards in 2025 as well. On slide 8, I also want to highlight our recent recognition by Newsweek as one of America's most responsible companies. This was the fourth consecutive year we have received this award, reflecting our ongoing commitment to sustainability and social impact.

These include RV of the Year awards across several categories, top debut recognition for standout models like Freedom Air and Sunflyer, best new models for Thrive and Foundation, editors' picks for Supreme Air, and innovation of the year for Grand Design's Lineage shower system. These accolades and many more reflect our relentless focus on innovation, quality, and delivering exceptional experiences for every traveler. In addition, our Grand Design and Newmar businesses both received Dealer Satisfaction Index awards this past November. Chris-Craft and Barletta received Industry Customer Satisfaction Index awards in 2025 as well. On slide 8, I also want to highlight our recent recognition by Newsweek as one of America's most responsible companies. This was the fourth consecutive year we have received this award, reflecting our ongoing commitment to sustainability and social impact.

Speaker #3: These accolades and many more reflect our relentless focus on innovation, quality, and delivering exceptional experiences for every traveler. In addition, our Grand Design and Newmar businesses both received Dealer Satisfaction Index awards this past November.

Speaker #3: Chris-Craft and Barletta received industry customer satisfaction index awards in 2025 as well. On slide eight, I also want to highlight our recent recognition by Newsweek as one of America's Most Responsible Companies.

Speaker #3: This was the fourth consecutive year we have received this award, reflecting our ongoing commitment to sustainability and social impact. In fiscal 2025, we contributed over 3.9 million volunteered hours, supported 13,600 employee Habitat for Humanity ReStores, and grew our employee resource group memberships by 38%.

Michael J. Happe: In FY2025, we contributed all in over $3.9 million, volunteered 13,600 employee hours, supported Habitat for Humanity ReStores, and grew our employee resource group memberships by 38%. We also advanced inclusion initiatives and began a comprehensive sustainability assessment with our annual and best-ever corporate responsibility report coming next month. Together, these achievements demonstrate how we're driving innovation forward while staying true to our values. I will now turn the call over to Brian Hughes for the financial review. Brian?

In FY2025, we contributed all in over $3.9 million, volunteered 13,600 employee hours, supported Habitat for Humanity ReStores, and grew our employee resource group memberships by 38%. We also advanced inclusion initiatives and began a comprehensive sustainability assessment with our annual and best-ever corporate responsibility report coming next month. Together, these achievements demonstrate how we're driving innovation forward while staying true to our values. I will now turn the call over to Bryan Hughes for the financial review. Bryan?

Speaker #3: We also advanced inclusion initiatives and began a comprehensive sustainability assessment, with our annual and best-ever corporate responsibility report coming next month. Together, these achievements demonstrate how we're driving innovation forward while staying true to our values.

Speaker #3: I will now turn the call over to Bryan Hughes for the financial review.

Speaker #2: Thank you, Mike. Good morning,

Bryan L. Hughes: Thank you, Mike. Good morning, everyone. Starting on slide 9, in Q1, our net revenue growth exceeded 12%, primarily reflecting higher unit volume and selective price increases. Our towable RV and motorhome RV segments each posted double-digit percentage growth in Q2, with our marine segment up low single digits on the top line compared to prior year. On a consolidated basis, warranty expense was 3.6% of net revenues, up 40 basis points from Q4, primarily reflecting our ongoing commitment to ensuring product quality and customer service. Operating expenses declined 3.2% compared to prior year, primarily related to the cost reduction initiatives implemented in the second half of F25, partially offset by investments to support the growth of our Grand Design motorhome business. On the bottom line, we reported adjusted earnings per diluted share of $0.38, compared with an adjusted net loss per share of $0.03 in Q1 of last year.

Bryan Hughes: Thank you, Mike. Good morning, everyone. Starting on slide 9, in Q1, our net revenue growth exceeded 12%, primarily reflecting higher unit volume and selective price increases. Our towable RV and motorhome RV segments each posted double-digit percentage growth in Q2, with our marine segment up low single digits on the top line compared to prior year. On a consolidated basis, warranty expense was 3.6% of net revenues, up 40 basis points from Q4, primarily reflecting our ongoing commitment to ensuring product quality and customer service. Operating expenses declined 3.2% compared to prior year, primarily related to the cost reduction initiatives implemented in the second half of F25, partially offset by investments to support the growth of our Grand Design motorhome business. On the bottom line, we reported adjusted earnings per diluted share of $0.38, compared with an adjusted net loss per share of $0.03 in Q1 of last year.

Speaker #2: Everyone, first quarter, our net revenue, starting on slide nine, in the 12%. Primarily reflecting growth exceeded higher unit volume and selective price increases. Our total RV and motorhome RV double-digit percentage growth in the quarter.

Speaker #2: Segment up low single digits, on segments each posted the top line compared to prior, Bryan. Year on a consolidated basis, warranty expense was 3.6% of net revenue, up 40 basis points from Q4, primarily reflecting our ongoing commitment to ensuring product quality and customer service.

Speaker #2: Operating expenses, compared to the prior year, declined 3.2%, primarily related to the cost reduction initiatives implemented in the second half of fiscal 2025, partially offset by investments to support the growth of our Grand Design motorhome business.

Speaker #2: On the bottom earnings for diluted share of $0.38. Compared with an adjusted net loss per share line, we reported adjusted of $0.03, in the first quarter of last year. Our segment results beginning with year.

Bryan L. Hughes: Turning to our segment results, beginning with Towable RV on slide 10, net revenues grew 15.5%. This increase was driven by higher volume from products like the Grand Design Imagine, Grand Design Reflection, Winnebago's new Thrive, and Winnebago Access, all of which are resonating strongly with our dealer partners, along with selective price increases partially offset by a mix shift toward lower price point products. Operating income margin of 3.8% improved 30 basis points from prior year, primarily due to volume leverage. This increase was partially offset by higher warranty expense. Turning to our motorhome segment performance on slide 11, Q1 net revenues grew 13.5% year-over-year. This was driven primarily by favorable product mix and selective price increases, partially offset by lower unit volume.

Turning to our segment results, beginning with Towable RV on slide 10, net revenues grew 15.5%. This increase was driven by higher volume from products like the Grand Design Imagine, Grand Design Reflection, Winnebago's new Thrive, and Winnebago Access, all of which are resonating strongly with our dealer partners, along with selective price increases partially offset by a mix shift toward lower price point products. Operating income margin of 3.8% improved 30 basis points from prior year, primarily due to volume leverage. This increase was partially offset by higher warranty expense. Turning to our motorhome segment performance on slide 11, Q1 net revenues grew 13.5% year-over-year. This was driven primarily by favorable product mix and selective price increases, partially offset by lower unit volume.

Speaker #2: Total RV, on slide 10, net revenues turned to grew 15.5%. This increase was driven by higher volume from products like the Grand Design Imagine, Grand Design Reflection, Winnebago's new Thrive, and Winnebago Access, all of which are resonating strongly with our dealer partners, along with selective price increases partially offset by a mixed shift toward lower price point products.

Speaker #2: of 3.8% improved 30 basis points from volume leverage. prior year primarily due to This increase was partially offset by higher warranty expense. Turning to our motorhome segment performance on slide 11, first quarter net revenues grew 13.5% year over year.

Speaker #2: This was driven primarily by favorable product mix and selective price increases, partially offset by lower unit volume. Motorhome RV segment operating income margin improved 390 basis points from the prior year due to targeted price increases, lower discounts and allowances, and lower warranty expense.

Bryan L. Hughes: Motorhome RV segment operating income margin improved 390 basis points from the prior year due to targeted price increases, lower discounts and allowances, and lower warranty expense. As shown on slide 12, net revenues in the marine segment for Q1 grew 2.2% from prior year due to selective price increases, partially offset by lower unit volume. As we noted on our year-end call, both Chris-Craft and Barletta have demonstrated strong discipline in managing production, adapting effectively to the cautious retail environment. Dealer inventory for Q4 remained essentially flat versus the comparable period of FY25. Marine segment operating income decreased less than 1%, primarily due to lower unit volume. Turning to slide 13, we continued to strengthen our balance sheet in Q1 while further reducing our net leverage ratio. Cash and cash equivalents were $181.7 million at Q2, driven by $25.4 million in net cash from operating activities.

Motorhome RV segment operating income margin improved 390 basis points from the prior year due to targeted price increases, lower discounts and allowances, and lower warranty expense. As shown on slide 12, net revenues in the marine segment for Q1 grew 2.2% from prior year due to selective price increases, partially offset by lower unit volume. As we noted on our year-end call, both Chris-Craft and Barletta have demonstrated strong discipline in managing production, adapting effectively to the cautious retail environment. Dealer inventory for Q4 remained essentially flat versus the comparable period of FY25. Marine segment operating income decreased less than 1%, primarily due to lower unit volume. Turning to slide 13, we continued to strengthen our balance sheet in Q1 while further reducing our net leverage ratio. Cash and cash equivalents were $181.7 million at Q2, driven by $25.4 million in net cash from operating activities.

Speaker #2: As shown on slide 12, net revenues in the Marine segment for the first quarter grew 2.2% from the prior year due to selective price increases, partially offset by lower unit volume.

Speaker #2: As we noted on our year-end call, both Chris-Craft and Barletta have demonstrated strong discipline in managing production, adapting effectively to the cautious retail environment. Dealer inventory for the quarter remained...

Speaker #2: Essentially flat versus the comparable period of fiscal 2025. Marine segment operating income decreased less than 1%, primarily due to lower unit volume. Turning to Slide 13, we continued to strengthen our balance sheet in the first quarter while further reducing our net leverage ratio.

Speaker #2: Cash and cash equivalents were $181.7 million at quarter end, driven by $25.4 million in net cash from operating activities. While inventories increased just over 4% in the quarter, accounts receivable decreased by more than 22% from year-end, which contributed to improved working capital.

Bryan L. Hughes: While inventories increased just over 4% in Q4, accounts receivables decreased by more than 22% from year-end, which contributed to improved working capital. We continued to manage working capital prudently, balancing inventory discipline with the flexibility to support retail demand. Adjusted EBITDA more than doubled year-over-year to $30.2 million, and combined with our cash from operations, reduced our net leverage ratio to 2.7x at the end of Q4. We continue to target a net leverage ratio approximating 2x by the end of F26. Turning to guidance on slide 14, we are raising our F26 full-year guidance as follows: consolidated net revenues in the range of $2.8 billion to $3.0 billion versus a prior expectation of $2.75 billion to $2.95 billion.

While inventories increased just over 4% in Q4, accounts receivables decreased by more than 22% from year-end, which contributed to improved working capital. We continued to manage working capital prudently, balancing inventory discipline with the flexibility to support retail demand. Adjusted EBITDA more than doubled year-over-year to $30.2 million, and combined with our cash from operations, reduced our net leverage ratio to 2.7x at the end of Q4. We continue to target a net leverage ratio approximating 2x by the end of F26. Turning to guidance on slide 14, we are raising our F26 full-year guidance as follows: consolidated net revenues in the range of $2.8 billion to $3.0 billion versus a prior expectation of $2.75 billion to $2.95 billion.

Speaker #2: We continued to manage working capital prudently, balancing inventory discipline with the flexibility to support retail demand. Adjusted EBITDA A more than doubled year over year to $30.2 million and, combined with our cash from operations, reduced our net leverage ratio to 2.7 times at the end of the quarter.

Speaker #2: We continue to target a net leverage ratio approximating two times by the end of fiscal 2026. Turning to guidance on slide 14, we are raising our fiscal guidance as follows.

Speaker #2: 2026 full-year consolidated net revenues in the range of $2.8 billion to $3.0 billion versus a prior expectation of $2.75 billion to $2.95 billion.

Speaker #2: Reported earnings for diluted share in the range of $1.40 to $2.10 compared with $1.25 to $1.95 previously, and adjusted range of $2.10 to $2.80 versus a prior range of $2.00 to $2.70.

Bryan L. Hughes: Reported earnings per diluted share in the range of $1.40 to 2.10, compared with $1.25 to 1.95 previously, and adjusted earnings per diluted share in the range of $2.10 to 2.80 versus a prior range of $2.00 to 2.70. From a segment perspective, we continue to expect flat to modest, low single-digit growth in the towable RV segment. In the motorhome RV segment, we remain on track for operating income margin improvement in the low single digits for Q1. Even with some outperformance in the marine segment in Q1, industry retail trends remain soft, and as a result, we expect full-year net revenues to be down in FY26 compared to Q2. Our revenue and earnings expectations for Q1 reflect the strength of our performance rather than reliance on industry-level unit growth.

Reported earnings per diluted share in the range of $1.40 to 2.10, compared with $1.25 to 1.95 previously, and adjusted earnings per diluted share in the range of $2.10 to 2.80 versus a prior range of $2.00 to 2.70. From a segment perspective, we continue to expect flat to modest, low single-digit growth in the towable RV segment. In the motorhome RV segment, we remain on track for operating income margin improvement in the low single digits for Q1. Even with some outperformance in the marine segment in Q1, industry retail trends remain soft, and as a result, we expect full-year net revenues to be down in FY26 compared to Q2. Our revenue and earnings expectations for Q1 reflect the strength of our performance rather than reliance on industry-level unit growth.

Speaker #2: From a segment perspective, we continue modest low single-digit growth in the total RV segment. In the motorhome, on track for operating income margin, RV segment, we remain the fiscal improvement in the low single digits for outperformance in the marine segment in the year.

Speaker #2: First quarter, industry retail trends remain soft. And as a result, we expect full-year net revenues to be down in fiscal 2026 compared to the prior year. Even with some...

Speaker #2: Our revenue and earnings expectations for the fiscal year reflect the strength of our performance, rather than reliance on industry-level unit growth. This approach underscores confidence in our ability to deliver results through disciplined execution and strategic initiatives, regardless of external market fluctuations.

Bryan L. Hughes: This approach underscores confidence in our ability to deliver results through disciplined execution and strategic initiatives, regardless of external market fluctuations. For Q2, we expect a modest increase versus the prior year's Q2 sales, driven by growth in the motorhome segment. We expect Q2 sales to be down sequentially from Q1 due to the normal seasonal flow of our business, further influenced by dealers' preference for low inventories. Similar to sales, we expect EPS to be down sequentially in Q2. Compared to the prior year, we expect EPS to be flat to up modestly, taking into consideration the relatively strong sequential recovery we witnessed in Q2 EPS last year. I want to reiterate that our financial guidance reflects current trade policy positions and prevailing tariff rates, which remain under a broader legal challenge before the US Supreme Court concerning presidential tariff authority.

This approach underscores confidence in our ability to deliver results through disciplined execution and strategic initiatives, regardless of external market fluctuations. For Q2, we expect a modest increase versus the prior year's Q2 sales, driven by growth in the motorhome segment. We expect Q2 sales to be down sequentially from Q1 due to the normal seasonal flow of our business, further influenced by dealers' preference for low inventories. Similar to sales, we expect EPS to be down sequentially in Q2. Compared to the prior year, we expect EPS to be flat to up modestly, taking into consideration the relatively strong sequential recovery we witnessed in Q2 EPS last year. I want to reiterate that our financial guidance reflects current trade policy positions and prevailing tariff rates, which remain under a broader legal challenge before the US Supreme Court concerning presidential tariff authority.

Speaker #2: For Q2, we expect a modest increase versus the prior year's growth in the motorhome Q2 sales driven by segment. We expect Q2 sales to be down sequentially, or from Q1, due to the normal seasonal flow of our business.

Speaker #2: Further influenced by dealers' preference for low inventories. Similar to sales, we expect EPS to be down sequentially in Q2. Compared to the prior year, we expect EPS to be flat to up modestly, taking into consideration the relatively strong sequential recovery we witnessed in Q2 EPS last year.

Speaker #2: I want to reiterate that our financial guidance reflects current trade policy positions and prevailing tariff rates, which remain under a broader legal court concerning presidential tariff challenges before the U.S. Supreme authority.

Speaker #2: Now, let me take a moment to formally introduce Joanne Ondala, who has recently expanded her role to lead Investor Relations here at Winnebago Industries.

Bryan L. Hughes: Now, let me take a moment to formally introduce Joanne Undala, who has recently expanded her role to lead investor relations here at Winnebago Industries. Since joining the organization more than four years ago, Joanne has been a critical leader on our enterprise team in building the foundation for our strategic planning, risk management, and business development initiatives, and most recently has led our treasury function. Joanne brings a strong background in strategy, corporate development, and finance, including senior roles at Tennant Company and Ecolab. We are excited to leverage Joanne's broad skill set in this new capacity. Joanne, I'll hand things over to you for some brief comments.

Now, let me take a moment to formally introduce Joanne Undala, who has recently expanded her role to lead investor relations here at Winnebago Industries. Since joining the organization more than four years ago, Joanne has been a critical leader on our enterprise team in building the foundation for our strategic planning, risk management, and business development initiatives, and most recently has led our treasury function. Joanne brings a strong background in strategy, corporate development, and finance, including senior roles at Tennant Company and Ecolab. We are excited to leverage Joanne's broad skill set in this new capacity. Joanne, I'll hand things over to you for some brief comments.

Speaker #2: Since joining the organization more than four years ago, Joanne has been a critical leader on our enterprise team in building the foundation for our strategic planning, risk management, and business development initiatives.

Speaker #2: And most recently has led our treasury function. Joanne brings a strong background in strategy, corporate development, and finance, including senior roles at Tennant Company and Ecolab.

Speaker #2: We are excited to leverage Joanne's broad skill set in this new capacity. Joanne, I'll hand things over to you for some brief comments. Thank you, Brian.

Joanne Undala: Thank you, Brian. I am thrilled to lead the investor relations function at Winnebago Industries. During my time at the company, I've deeply valued my work with our commercial and investment banking partners, and I'm eager to bring that same level of engagement to our analysts and shareholders. I look forward to working with all of you as we execute on our long-term growth strategy. Now, please turn to slide 15 as I hand the call back to Mike for his closing comments.

Joan Ondala: Thank you, Bryan. I am thrilled to lead the investor relations function at Winnebago Industries. During my time at the company, I've deeply valued my work with our commercial and investment banking partners, and I'm eager to bring that same level of engagement to our analysts and shareholders. I look forward to working with all of you as we execute on our long-term growth strategy. Now, please turn to slide 15 as I hand the call back to Mike for his closing comments.

Speaker #2: I am thrilled to lead the investor relations function at Winnebago. I have deeply valued my work with our Industries. During my time at the partners.

Speaker #2: And I'm eager to bring that same level of engagement to our analysts and shareholders. I look forward to working with all of you as we execute on our long-term growth strategy.

Speaker #2: Now, please turn to slide 15 as I hand the call back to Mike for his closing comments.

Speaker #3: Thanks, Joanne. Winnebago Industries continues to demonstrate disciplined execution and resilience across our diversified portfolio. We are expanding margins, strengthening our balance sheet, and advancing a focused product roadmap that positions us for sustainable growth, as we outlined last quarter.

Michael J. Happe: Thanks, Joanne. In closing, Winnebago Industries continues to demonstrate disciplined execution and resilience across our diversified portfolio. We are expanding margins, strengthening our balance sheet, and advancing a focused product roadmap that positions us for sustainable growth. The process we outlined last quarter, delivering better products, deepening dealer partnerships, and driving operational performance, are gaining meaningful traction and generating tangible results. On slide 15, which we discussed on our year-end call, this shows what we believe are the key drivers for our success in F26. While we continue to navigate a dynamic market environment, we do so with a realistic and disciplined optimism. Our approach is rooted in intentional risk management and targeted investment, ensuring we deploy resources where returns are clear and sustainable. Above all, we are committed to supporting our dealer partners and consumers with innovative, high-quality products that deliver on our purpose, elevating every moment outdoors.

Michael Happe: Thanks, Joanne. In closing, Winnebago Industries continues to demonstrate disciplined execution and resilience across our diversified portfolio. We are expanding margins, strengthening our balance sheet, and advancing a focused product roadmap that positions us for sustainable growth. The process we outlined last quarter, delivering better products, deepening dealer partnerships, and driving operational performance, are gaining meaningful traction and generating tangible results. On slide 15, which we discussed on our year-end call, this shows what we believe are the key drivers for our success in F26. While we continue to navigate a dynamic market environment, we do so with a realistic and disciplined optimism. Our approach is rooted in intentional risk management and targeted investment, ensuring we deploy resources where returns are clear and sustainable. Above all, we are committed to supporting our dealer partners and consumers with innovative, high-quality products that deliver on our purpose, elevating every moment outdoors.

Speaker #3: Deepening dealer partnerships and driving operational performance are gaining meaningful traction and generating tangible results. On slide 15, which we discussed on our year-end call, this shows what we believe are the key drivers for our success in fiscal 2026.

Speaker #3: While we continue to navigate a dynamic market environment, we do so with optimism. Our approach is rooted in intentional, realistic, and disciplined risk management and targeted investment, ensuring we deploy resources where returns are clear and sustainable.

Speaker #3: Above all, we are committed to supporting our dealer partners and consumers with innovative, high-quality products that deliver on our purpose: elevating every moment outdoors.

Speaker #3: Now, Brian and I are happy to take your questions this morning. Operator, please open the line for the Q&A session.

Michael J. Happe: Now, Brian and I are happy to take your questions this morning. Operator, please open the line for the Q&A session.

Now, Bryan and I are happy to take your questions this morning. Operator, please open the line for the Q&A session.

Operator: To ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. Our first question comes from Craig Kenison with Baird. Your line is open.

Speaker #4: To ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again.

Speaker #4: Please stand by while we compile the Q&A roster. Our first question comes from Craig Kennison with Baird. Your line is open.

Speaker #5: Hey, good morning. Mike, there’s a lot of optimism building around the 2026 retail consumer, driven by lower rates and tax policy. What signals are you looking for to ascertain whether your end markets might grow for the first time since the pandemic?

Craig R. Kennison: Hey, good morning. Mike, a lot of optimism building around the 2026 retail consumer, driven by lower rates and tax policy. What signals are you looking for to ascertain whether your end markets might grow for the first time since the pandemic?

Craig Kennison: Hey, good morning. Mike, a lot of optimism building around the 2026 retail consumer, driven by lower rates and tax policy. What signals are you looking for to ascertain whether your end markets might grow for the first time since the pandemic?

Speaker #6: Yeah, good morning, Craig. The retail environment, as Bryan Hughes indicated in his comments, continues to be soft and tempered here in the fall, early winter—the last few months of 2025.

Michael J. Happe: Yeah, good morning, Craig. The retail environment, as Bryan Hughes indicated in his comments, continues to be soft and tempered here in the fall, early winter, the last few months of 2025. But as you well know, we are hitting into our retail show season, really in the January, February, and even early March periods where we hit the retail shows hard with our RV and marine brands. And so certainly one sign we'll be looking for here in the next 30 to 90 days is the foot traffic, but more importantly, the retail appetite from consumers at these shows. The other note that I would probably include would be reception to the new products that our teams are bringing to the market.

Michael Happe: Yeah, good morning, Craig. The retail environment, as Bryan Hughes indicated in his comments, continues to be soft and tempered here in the fall, early winter, the last few months of 2025. But as you well know, we are hitting into our retail show season, really in the January, February, and even early March periods where we hit the retail shows hard with our RV and marine brands. And so certainly one sign we'll be looking for here in the next 30 to 90 days is the foot traffic, but more importantly, the retail appetite from consumers at these shows. The other note that I would probably include would be reception to the new products that our teams are bringing to the market.

Speaker #6: But as you well know, we are heading into our retail show season, really in the January and February—even early March—periods, where we hit the retail shows hard with our RV and marine brands.

Speaker #6: And so, certainly, one sign we'll be looking for here in the next 30 to 90 days is the foot traffic, but more importantly, the retail appetite from consumers at these shows.

Speaker #6: The other note that I would probably include would be reception to the new products that our teams are bringing to the products across many of our brands.

Michael J. Happe: We have a slate of new products across many of our brands, and we'll be monitoring carefully the consumer and dealer reception, candidly, to those new products in the near future. So as you well know, the early parts of the calendar year are important barometers for the industries that we compete in. And by the time we show up on our next call in March, we'll certainly, obviously, have a good understanding as to retail prospects in calendar 2026.

We have a slate of new products across many of our brands, and we'll be monitoring carefully the consumer and dealer reception, candidly, to those new products in the near future. So as you well know, the early parts of the calendar year are important barometers for the industries that we compete in. And by the time we show up on our next call in March, we'll certainly, obviously, have a good understanding as to retail prospects in calendar 2026.

Speaker #6: And we'll be monitoring carefully the consumer market and dealer reception candidly to those new. We have a slate of new products in the near future.

Speaker #6: So, as you well know, the early parts of the calendar year are important barometers for the industries that we compete in. And by the time we show up at our next call in March, we'll certainly, obviously, have a good understanding as to retail prospects in calendar '26.

Speaker #7: Hey, Craig, I'll just add, you know, we continue to monitor, as you would expect, a basket of macro indicators. Certainly helpful to have interest rates reduced, but also lower gas prices, housing starts.

Craig R. Kennison: Hey, Craig, I'll just add, you know, we continue to monitor, as you would expect, a basket of macro indicators. It's certainly helpful to have interest rates reduced, but lower gas prices, housing starts. We had a good inflation reading. And then certainly, and probably most importantly, consumer sentiment. We'll keep a close eye on that as well. All these things will certainly weigh and contribute to an improved retail environment, as you would expect. And if I could, on a follow-up, I know you've got some affordable units in the market now that chase a new price point and a new consumer. But I'm wondering if you can look at your portfolio of customers today and wonder. I guess I'm wondering when we might see an upgrade cycle.

Bryan Hughes: Hey, Craig, I'll just add, you know, we continue to monitor, as you would expect, a basket of macro indicators. It's certainly helpful to have interest rates reduced, but lower gas prices, housing starts. We had a good inflation reading. And then certainly, and probably most importantly, consumer sentiment. We'll keep a close eye on that as well. All these things will certainly weigh and contribute to an improved retail environment, as you would expect.

Speaker #7: We had a good inflation reading. And then certainly, and probably most importantly, consumer sentiment. We'll keep a close eye on that as well. All these things will certainly weigh in and contribute to an improved retail environment, as you would.

Speaker #7: expect. And if I could,

Craig Kennison: And if I could, on a follow-up, I know you've got some affordable units in the market now that chase a new price point and a new consumer. But I'm wondering if you can look at your portfolio of customers today and wonder. I guess I'm wondering when we might see an upgrade cycle.

Speaker #5: On a follow-up, I know you've got some affordable units in the market now that chase a new price point and a new consumer. But I'm wondering, if you can look at your portfolio of customers today and wonder about an upgrade cycle.

Craig R. Kennison: It feels like that has been deferred, much like the housing market, but you should be pretty well positioned as consumers look for higher quality. I'm wondering if you're seeing any of that in your checks or data.

It feels like that has been deferred, much like the housing market, but you should be pretty well positioned as consumers look for higher quality. I'm wondering if you're seeing any of that in your checks or data.

Speaker #5: deferred, much like the housing market. guess I'm wondering when we might see an It feels like that has been quality and I'm wondering if you're seeing any of that in your checks or data.

Speaker #6: Craig, we agree with your sentiments about the deferral of an upgrade cycle that seems to have taken place over the last couple of years.

Michael J. Happe: Craig, we agree with your sentiments about the deferral of an upgrade cycle that seems to have taken place over the last couple of years. I think many of our industry peers are also thinking the same thing. We are not seeing probably yet any signs of that upgrade cycle taking off with any significant momentum. Again, we'll see if that happens in the early to H1 2026. As you said, I mean, our brands are positioned better from an accessibility standpoint for first-time or younger or more cost-conscious buyers. But we are absolutely well positioned for those consumers that are looking for a step-up in product, especially products that offer innovation, quality, and a great aftermarket customer experience as well. So optimistic that as the cycle eventually turns upward, that our product lineups and brands are well positioned.

Michael Happe: Craig, we agree with your sentiments about the deferral of an upgrade cycle that seems to have taken place over the last couple of years. I think many of our industry peers are also thinking the same thing. We are not seeing probably yet any signs of that upgrade cycle taking off with any significant momentum. Again, we'll see if that happens in the early to H1 2026. As you said, I mean, our brands are positioned better from an accessibility standpoint for first-time or younger or more cost-conscious buyers. But we are absolutely well positioned for those consumers that are looking for a step-up in product, especially products that offer innovation, quality, and a great aftermarket customer experience as well. So optimistic that as the cycle eventually turns upward, that our product lineups and brands are well positioned.

Speaker #6: I think many of our industry peers are also thinking the same thing. We are not seeing, probably yet, any signs of that upgrade cycle taking off with any significant momentum.

Speaker #6: Again, we'll see if that happens in the early to first half of '26. As you said, I mean, our brands are positioned better from an accessibility standpoint for a first-time or younger or more cost-conscious buyers.

Speaker #6: But we are absolutely well-positioned for those consumers that are looking for a step up in product, especially to products that offer innovation, quality, and a great aftermarket customer experience.

Speaker #6: As well. So optimistic that as the cycle eventually turns upward, that our product lineups and brands are well

Speaker #6: positioned.

Speaker #5: Thank

Craig R. Kennison: Thank you.

Craig Kennison: Thank you.

Speaker #4: Thank you. Our next question comes from Joe Altobello with Raymond James. Your line is open.

Operator: Thank you. Our next question comes from Joe Altabello with Raymond James. Your line is open.

Joseph Nicholas Altobello: Thanks. Hey, guys. Good morning. First question on the towable business. It looks like incremental margins were pretty light this quarter. I think revenue was up almost $40 million. Year-over-year operating income was up about $2 million. I know you guys called out higher warranty expense, but what were the big driver or drivers of that?

Joseph Altobello: Thanks. Hey, guys. Good morning. First question on the towable business. It looks like incremental margins were pretty light this quarter. I think revenue was up almost $40 million. Year-over-year operating income was up about $2 million. I know you guys called out higher warranty expense, but what were the big driver or drivers of that?

Speaker #8: Morning. First question on the Thanks. Towable business. It looks like incremental, hey guys, margins were pretty good—$40 million. Year-over-year, operating income was up about $2 million.

Speaker #8: I know you guys called out higher warranty expense, but what were the big driver or drivers of that?

Speaker #5: Yeah, good morning, Joe. This is light this quarter, Bryan. You know, warranty was certainly one of the drivers. We continue to

Bryan L. Hughes: Yeah, good morning, Joseph. Brian, warranty was certainly one of the drivers. We continue to have some mix that we are seeing as headwinds as well. I'd say those are the primary drivers. Down at this level of volume, a lot of the equation is leverage. We did have growth, as you pointed out, which contributed favorably. But overall, I think those are the drivers. It's mixed, and it is that higher warranty expense.

Bryan Hughes: Yeah, good morning, Joseph. Bryan, warranty was certainly one of the drivers. We continue to have some mix that we are seeing as headwinds as well. I'd say those are the primary drivers. Down at this level of volume, a lot of the equation is leverage. We did have growth, as you pointed out, which contributed favorably. But overall, I think those are the drivers. It's mixed, and it is that higher warranty expense.

Speaker #5: We have some mix that we are seeing as headwinds as well. I'd say those are the primary drivers. Down at this level of volume, a lot of the equation is leverage.

Speaker #5: You pointed out, which contributed favorably. But overall, I think those are the drivers. I think revenue was up almost—it's—we did have growth, as mix.

Speaker #5: And it is that higher warranty expense.

Speaker #8: Got it. Okay. And just in terms of the guidance for this year, if I look at your industry shipment outlook, it calls for, at least at the midpoint, a little bit of decline in calendar '26.

Joseph Nicholas Altobello: Got it. Okay. And just in terms of the guidance for this year, if I look at your industry shipment outlook, it calls for, at least at the midpoint, a little bit of decline in calendar 2026. What sort of market share trends on the RV side are you guys baking into that guidance?

Joseph Altobello: Got it. Okay. And just in terms of the guidance for this year, if I look at your industry shipment outlook, it calls for, at least at the midpoint, a little bit of decline in calendar 2026. What sort of market share trends on the RV side are you guys baking into that guidance?

Speaker #8: What sort of market share trends on the RV side are you guys baking into that?

Speaker #8: Guidance? Craig, we are—excuse me,

Michael J. Happe: Craig, we are, excuse me, Joe, good morning, by the way. This is Mike. We are absolutely looking to drive a little bit of market share in F26. It'll be in areas like Super C's from Newmar and Grand Design. The Winnebago Towables brand should see some share lift as well. We anticipate, obviously, share increases with some of our Grand Design travel trailers, Transcend brand specifically. And then when you get to the marine side, Barletta continues to show very strong market share growth. Even in recent individual months that haven't been reported, I'm quite confident that you'll see Barletta standalone monthly market share continue to be at very impressive levels. I do want to emphasize, Joe, that we have been very consistent since the call in October and including the call this morning that much of our increase in earnings from F25 to F26 is within our control.

Michael Happe: Craig, we are, excuse me, Joe, good morning, by the way. This is Mike. We are absolutely looking to drive a little bit of market share in F26. It'll be in areas like Super C's from Newmar and Grand Design. The Winnebago Towables brand should see some share lift as well. We anticipate, obviously, share increases with some of our Grand Design travel trailers, Transcend brand specifically. And then when you get to the marine side, Barletta continues to show very strong market share growth. Even in recent individual months that haven't been reported, I'm quite confident that you'll see Barletta standalone monthly market share continue to be at very impressive levels. I do want to emphasize, Joe, that we have been very consistent since the call in October and including the call this morning that much of our increase in earnings from F25 to F26 is within our control.

Speaker #6: Joe, good morning, by the way. This is Mike. We are absolutely looking to drive a little bit of market share in fiscal '26. It'll be in areas like Super C's from Newmar and Grand Design. The Winnebago towables brand should see some share lift as well.

Speaker #1: And Son brand , specifically . And then when you get to the marine side , Barletta continues to show , you know , very strong market share growth .

Speaker #1: Even in, you know, recent individual months that haven't been reported, I'm quite confident that you'll see Barletta standalone monthly share continue to be marked at very impressive levels.

Speaker #1: I do want to Joe , that , you know , we have been very consistent since the call in . And including the call October this morning .

Speaker #1: That much of our increase in emphasize , from fiscal 25 to fiscal 26 is within our control . And while we are somewhat conservative on our , wholesale shipment assumptions that we're sharing , we industry we we view any upside to the number that we're sharing as as something that could flow through to our financials in the future .

Michael J. Happe: While we are somewhat conservative on our industry wholesale shipment assumptions that we're sharing, we view any upside to the number that we're sharing as something that could flow through to our financials in the future. We are executing the controllable here at Winnebago Industries. Operational discipline, we have significant cost improvement, margin improvement initiatives that are happening, new products that are being launched that we believe will both drive share, but also potentially add some profitability as well. So our plan is really based this fiscal year on what we can control, and we'll certainly be agile should the market grow or even decline versus our current assumption.

While we are somewhat conservative on our industry wholesale shipment assumptions that we're sharing, we view any upside to the number that we're sharing as something that could flow through to our financials in the future. We are executing the controllable here at Winnebago Industries. Operational discipline, we have significant cost improvement, margin improvement initiatives that are happening, new products that are being launched that we believe will both drive share, but also potentially add some profitability as well. So our plan is really based this fiscal year on what we can control, and we'll certainly be agile should the market grow or even decline versus our current assumption.

Speaker #1: We are executing the, here at Winnebago Industries, operational Controllables discipline. We have significant cost improvement, margin improvement initiatives that are happening.

Speaker #1: New that are being launched that we believe will both drive , products share , but also potentially , you know , add some profitability as well .

Speaker #1: So our plan is really based this fiscal year on what we can control. And we'll certainly be agile should the market grow or even decline versus our current assumption.

Speaker #2: It... Okay. Guys, got it. Thank you.

Speaker #3: Thank you. Our next question comes from Scott Stember with Roth MKM. Your line is open.

Joseph Nicholas Altobello: Got it. Okay. Thank you, guys.

Joseph Altobello: Got it. Okay. Thank you, guys.

Operator: Thank you. Our next question comes from Scott Stember with Roth MKM. Your line is open.

Speaker #4: Good morning, and thanks for taking my questions.

Speaker #1: Scott Good morning

Speaker #1: .

Speaker #4: some .

Speaker #4: Very nice progress, yeah, here clearly on the operational front, but just trying to get a sense of the price increases that you guys talked about on a basis.

Scott Lewis Stember: Good morning, and thanks for taking my questions.

Scott Stember: Good morning, and thanks for taking my questions.

Craig R. Kennison: Yeah, good morning, Scott.

Craig Kennison: Yeah, good morning, Scott.

Scott Lewis Stember: Yeah, clearly some very nice progress here on the operational front, but just trying to get a sense of the price increases that you guys talked about on a select basis on RV. Just trying to get a sense of the size and the scale, and basically to see if you've seen any pushback at retail at any point just given those increases?

Scott Stember: Yeah, clearly some very nice progress here on the operational front, but just trying to get a sense of the price increases that you guys talked about on a select basis on RV. Just trying to get a sense of the size and the scale, and basically to see if you've seen any pushback at retail at any point just given those increases?

Speaker #4: On RV, just trying to get a sense of the size and the scale, and basically to see if you've seen any at retail select at any point, just given those increases, pushback.

Speaker #1: Yeah. Good morning, Scott. I word that we think the word used was 'selective' related to the price increases. And that is an important word.

Michael J. Happe: Yeah, good morning, Scott. I think the word that we used was selective related to the price increases, and that is an important word. The market is not conducive nor supportive of broad, significant price increases, even with some of the cost input pressure that we're seeing from still ongoing tariffs for the time being. So our teams are really focusing their pricing around new products, around some of the feature enhancements we made in the latest model year transition. Certainly, as we transform some of our brands, like particularly the Winnebago brand of RVs, we are actively pruning both the motorized and towable lines under the Winnebago brand by discontinuing some products that were not performing at retail and, candidly, were pressuring our margin and replacing those with healthier products, in some cases, even with probably an ASP lift as well.

Michael Happe: Yeah, good morning, Scott. I think the word that we used was selective related to the price increases, and that is an important word. The market is not conducive nor supportive of broad, significant price increases, even with some of the cost input pressure that we're seeing from still ongoing tariffs for the time being. So our teams are really focusing their pricing around new products, around some of the feature enhancements we made in the latest model year transition. Certainly, as we transform some of our brands, like particularly the Winnebago brand of RVs, we are actively pruning both the motorized and towable lines under the Winnebago brand by discontinuing some products that were not performing at retail and, candidly, were pressuring our margin and replacing those with healthier products, in some cases, even with probably an ASP lift as well.

Speaker #1: The market is not conducive nor supportive you know , broad of , , significant price increases , even with some of the cost input pressure that we're seeing from , know , still you ongoing tariffs for the time being .

Speaker #1: So our teams are really focusing , you know , they're they're they're around new products pricing around some of the feature enhancements we made in the latest model year transition .

Speaker #1: Certainly transform as we some of our brands , like particularly the Winnebago brand of RVs , we are actively pruning both the motorized and towable lines under the Winnebago brand by by discontinuing some some products that were not performing at retail .

Speaker #1: we're pressuring our candidly , margin and replacing those with healthier products in some even And with with probably an ASP cases , lift So the pricing as well .

Speaker #1: is is intentional , but it's also disciplined and and selective . And we'll monitor the cost input environment . Obviously here as we go forward .

Michael J. Happe: So the pricing is intentional, but it's also disciplined and selective. We'll monitor the cost input environment. Obviously, here as we go forward, we have seen a few shifts in some commodities like aluminum lately, as an example, that we'll have to react to in the future if those trends continue. But to your point, we have to price to market and not necessarily to profit because we do want to maintain and, in fact, grow market share over time as well.

So the pricing is intentional, but it's also disciplined and selective. We'll monitor the cost input environment. Obviously, here as we go forward, we have seen a few shifts in some commodities like aluminum lately, as an example, that we'll have to react to in the future if those trends continue. But to your point, we have to price to market and not necessarily to profit because we do want to maintain and, in fact, grow market share over time as well.

Speaker #1: We have seen a few shifts in some aluminum lately. As commodities like that, we'll have to react to them in the future.

Speaker #1: If those trends continue . example to your have to price to market point , we and not necessarily to profit , because we do want to maintain and in fact grow share over market time as well .

Speaker #4: And then just Got it . touching on the comment you made about what's in your control within guidance , I given your guess commentary about where you expect to queue to come in on the bottom line , obviously the back half of the year is virtually everything .

Scott Lewis Stember: Got it. And then just touching on the comment you made about what's in your control within guidance, I guess, given your commentary about where you expect Q2 to come in on the bottom line, obviously, the back half of the year is virtually everything. So just trying to get a sense of self-help items versus the market, just trying to get a sense of how much will be based on what you have in your control.

Scott Stember: Got it. And then just touching on the comment you made about what's in your control within guidance, I guess, given your commentary about where you expect Q2 to come in on the bottom line, obviously, the back half of the year is virtually everything. So just trying to get a sense of self-help items versus the market, just trying to get a sense of how much will be based on what you have in your control.

Speaker #4: So just trying to get a sense of self-help items versus the market, just trying to get a sense of how much will be what you have in your control on.

Speaker #1: Yeah .

Speaker #1: Yeah . Scott

Speaker #1: business , as you well know , is , is always model from an loaded . standpoint . Q1 and Q2 from our fiscal year timing are always softer a from an from EPs contribution standpoint .

Michael J. Happe: Yeah, Scott, our business model, as you well know, is always back half loaded from an EPS standpoint. Q1 and Q2 from our fiscal year timing are always softer from an EPS contribution standpoint. So the back half loading isn't abnormal from my standpoint, from a historical perspective. That being said, when I talk about controllables, I talk about several of the cost management and profit improvement initiatives we have underway here at the company in different parts of the business across supply chain. I talk about a lot of the new products that we're bringing out, some of which the market doesn't know about yet that we'll be bringing to some of the retail shows later in the spring for the first time. We have brand expansion going on, and we're candidly still seeing stock-ins on business revenue streams like Grand Design Motorized and Winnebago Towables.

Michael Happe: Yeah, Scott, our business model, as you well know, is always back half loaded from an EPS standpoint. Q1 and Q2 from our fiscal year timing are always softer from an EPS contribution standpoint. So the back half loading isn't abnormal from my standpoint, from a historical perspective. That being said, when I talk about controllables, I talk about several of the cost management and profit improvement initiatives we have underway here at the company in different parts of the business across supply chain. I talk about a lot of the new products that we're bringing out, some of which the market doesn't know about yet that we'll be bringing to some of the retail shows later in the spring for the first time. We have brand expansion going on, and we're candidly still seeing stock-ins on business revenue streams like Grand Design Motorized and Winnebago Towables.

Speaker #1: back loading isn't abnormal from my standpoint , from a historical half perspective , that being said , when I talk about Controllables , I talk about several of the cost management and profit improvement initiatives we have underway here at the at the company in different parts of the business , across supply chain .

Speaker #1: I talk about a lot of the new products that we're bringing out , some of which the market doesn't about yet , that we'll be bringing to some of the the the know retail shows later in the spring for the first time , we have expansion brand going on , and we're candidly still seeing stock ins on on business revenue streams like Grand Design , motorized and and Winnebago Towables .

Speaker #1: The new class C freedom air from Newmar has not hit the market yet in material way any . So the back half of the year is certainly a reflection of , you know , of a of a market assumption that we've been transparent about .

Michael J. Happe: The new Class C Freedom Air from Newmar has not hit the market yet in any material way. So the back half of the year is certainly a reflection of a market assumption that we've been transparent about. But to your point, it's a collection of the commercial and the operational initiatives that we're driving. And so while we still have a relatively broad range on the guidance, I think you can take our moderate guidance increase this quarter to reflect our confidence in executing Q1 well and looking at the following three quarters, Q2 and Q4, and saying, "Listen, most of those results are within our control.

The new Class C Freedom Air from Newmar has not hit the market yet in any material way. So the back half of the year is certainly a reflection of a market assumption that we've been transparent about. But to your point, it's a collection of the commercial and the operational initiatives that we're driving. And so while we still have a relatively broad range on the guidance, I think you can take our moderate guidance increase this quarter to reflect our confidence in executing Q1 well and looking at the following three quarters, Q2 and Q4, and saying, "Listen, most of those results are within our control.

Speaker #1: But but to your point , it's it's a collection of the , the commercial and the operational initiatives that , that we're driving .

Speaker #1: And so, still have a relatively broad range on the guidance. While we can, I think you can take our moderate guidance increase quarter to reflect our confidence in this executing Q1.

Speaker #1: Well and looking at the following three quarters , Q2 and Q4 and saying , listen , most of most of those results are within our control .

Speaker #4: Got it. Thanks again.

Speaker #3: Thank you. Next, our question comes from Tristan Thomas with BMO Capital Markets. Your line is open.

Scott Lewis Stember: Got it. Thanks again.

Scott Stember: Got it. Thanks again.

Speaker #5: Hey, good opening, Tristan. You guys shipped in above retail during the quarter, tied to new products. What do you think about that? How should we handle the retail relationship in the rest of the year?

Operator: Thank you. Our next question comes from Tristan Thomas with BMO Capital Markets. Your line is open.

Craig R. Kennison: Hey, good morning.

Craig Kennison: Hey, good morning.

Michael J. Happe: Morning, Tristan.

Michael Happe: Morning, Tristan.

Craig R. Kennison: You guys shipped above retail during the quarter tied to new products. How should we think about that retail wholesale relationship in the rest of the year?

Tristan Thomas: You guys shipped above retail during the quarter tied to new products. How should we think about that retail wholesale relationship in the rest of the year?

Speaker #1: Well , we've been very clear that every business is expected to , you to to know , try to drive their trailing 12 month turns level in the field to around two times .

Michael J. Happe: Well, we've been very clear that every business is expected to try to drive their trailing 12-month turns level in the field to around two times. Now, there's some seasonality related to that. There'll be businesses that will be slightly above that at times. There will be businesses that are slightly below that. As an example, our motorized RV businesses at times tend to run below two times, particularly in the high-end Newmar type product. But I would say we're really trying to stay disciplined. And with the exception of new products and some of these, let's call it sort of brand reinvigoration efforts or new revenue streams like Grand Design Motorized, we're really trying to stay disciplined and keep dealer inventory in good shape.

Michael Happe: Well, we've been very clear that every business is expected to try to drive their trailing 12-month turns level in the field to around two times. Now, there's some seasonality related to that. There'll be businesses that will be slightly above that at times. There will be businesses that are slightly below that. As an example, our motorized RV businesses at times tend to run below two times, particularly in the high-end Newmar type product. But I would say we're really trying to stay disciplined. And with the exception of new products and some of these, let's call it sort of brand reinvigoration efforts or new revenue streams like Grand Design Motorized, we're really trying to stay disciplined and keep dealer inventory in good shape.

Speaker #1: Now, there's some seasonality related to that. There will be businesses that will be slightly above that. At times, there will be businesses that are slightly below that.

Speaker #1: As an example , our motorized RV business is at times tend to run , below two times , particularly in the high Newmar end .

Speaker #1: type product . I would But but say really trying we're to to stay disciplined . And with the exception of new products and and some of these , let's call it sort of brand reinvigoration efforts or new revenue streams like Grand design , motorized .

Speaker #1: We're really trying to stay disciplined and dealer inventory in a in good shape . If you look at our aging inventory , Tristan , year over year in macro on both the marine RV and side keep , the percentage of aged inventory in our businesses is on a consolidated basis less than it was a year ago .

Michael J. Happe: If you look at our aging inventory, Tristan, year over year in macro on both the RV and marine side, the percentage of aged inventory in our businesses is, on a consolidated basis, less than it was a year ago. And so we not only feel good about the quantity of inventory in the business, but we are particularly pleased with the quality of the inventory at this time. The next three, four months are going to be critical, obviously, to seeing how that will shape up in the '26 selling season and how some of the current model year inventory moves going forward.

If you look at our aging inventory, Tristan, year over year in macro on both the RV and marine side, the percentage of aged inventory in our businesses is, on a consolidated basis, less than it was a year ago. And so we not only feel good about the quantity of inventory in the business, but we are particularly pleased with the quality of the inventory at this time. The next three, four months are going to be critical, obviously, to seeing how that will shape up in the '26 selling season and how some of the current model year inventory moves going forward.

Speaker #1: And so we not only feel good about the quantity of inventory in the business, but we are particularly pleased with the quality of the inventory at this time.

Speaker #1: the The next 3 or 4 months are going to be critical , obviously , next , to seeing you know , what retail , how that will shape up in the 26 selling season .

Speaker #1: And how some of the current model year inventory moves going forward.

Speaker #5: Okay. Thank you. And this isn't necessarily a directly related follow-up, but you mentioned a couple times some of the operational margin improvement initiatives you've done.

Craig R. Kennison: Okay. Thank you. This isn't necessarily a directly related follow-up, but you've mentioned a couple of times some of the operational and margin improvement initiatives you've done. My understanding is a lot of that's on the motorized side. Could you maybe just give an update on everything you've done and how much more there is to come and kind of what you're doing? Thanks.

Tristan Thomas: Okay. Thank you. This isn't necessarily a directly related follow-up, but you've mentioned a couple of times some of the operational and margin improvement initiatives you've done. My understanding is a lot of that's on the motorized side. Could you maybe just give an update on everything you've done and how much more there is to come and kind of what you're doing? Thanks.

Speaker #5: My understanding is a lot of motorized that's on the side . the So could you maybe just give an update on everything you've how much done and there is to come and kind of what you're doing ?

Speaker #5: Thanks .

Speaker #1: Yeah , we probably use the word operational from from a broad definition standpoint , but a we have been more transparent about the operational initiatives , our particularly around Winnebago motorhome business , where we have been consolidating the footprint , where we are undergoing rationalization of vertical discussions and even actions here at the .

Michael J. Happe: Yeah. We probably use the word operational from a broad definition standpoint, but we have been more transparent about the operational initiatives, particularly around our Winnebago motorhome business, where we have been consolidating the footprint, where we are undergoing rationalization of vertical discussions and even actions here at the company. We have been consolidating assembly lines across much of the RV portfolio, candidly. There are lines that are not running today that were running two years ago, but there are also lines and/or buildings in the company that are running multiple models today that weren't doing that a couple of years ago as well. I also use the word operational when talking about supply chain efforts. As Brian indicated, our tariff exposure for fiscal year 2026 is embedded in the guidance that he provided, but there's a significant amount of work being done to obviously mitigate the tariff pressures.

Michael Happe: Yeah. We probably use the word operational from a broad definition standpoint, but we have been more transparent about the operational initiatives, particularly around our Winnebago motorhome business, where we have been consolidating the footprint, where we are undergoing rationalization of vertical discussions and even actions here at the company. We have been consolidating assembly lines across much of the RV portfolio, candidly. There are lines that are not running today that were running two years ago, but there are also lines and/or buildings in the company that are running multiple models today that weren't doing that a couple of years ago as well. I also use the word operational when talking about supply chain efforts. As Bryan indicated, our tariff exposure for fiscal year 2026 is embedded in the guidance that he provided, but there's a significant amount of work being done to obviously mitigate the tariff pressures.

Speaker #1: company We we have been consolidating assembly lines across , you know , much of the RV portfolio . Candidly , there are lines that are not running today that we're running two years ago , but there are also lines in and or buildings in the company that are that are running multiple models today that weren't doing that a couple of years ago as well .

Speaker #1: I also use the word 'operational' when talking about supply chain efforts. As Bryan indicated, our tariff exposure for fiscal year '26 is embedded in the guidance that he provided.

Speaker #1: But there's a significant amount of work being done to obviously mitigate the tariff pressures , but , more also importantly , we are really putting our foot on the pedal on what we'll call coordinated or centralized strategic sourcing initiatives to try to be smarter about how we , by our valued supply working with partners , but leveraging candidly some of the volume that we do have also and even working on things engineering like efficiency to harmonize specs on key components across across brands .

Michael J. Happe: But also, more importantly, we are really putting our foot on the pedal on what we'll call coordinated or centralized strategic sourcing initiatives to try to be smarter about how we buy, working with our valued supply partners, but also leveraging, candidly, some of the volume that we do have and even working on things like engineering efficiency to harmonize specs on key components across brands that allows us to buy a little smarter. So over time, I think we'll probably figure out a way how to be more articulate about some of these operational initiatives and how they'll improve or contribute to improving gross margin in the future. But there's a lot of things going on across the whole of the portfolio.

But also, more importantly, we are really putting our foot on the pedal on what we'll call coordinated or centralized strategic sourcing initiatives to try to be smarter about how we buy, working with our valued supply partners, but also leveraging, candidly, some of the volume that we do have and even working on things like engineering efficiency to harmonize specs on key components across brands that allows us to buy a little smarter. So over time, I think we'll probably figure out a way how to be more articulate about some of these operational initiatives and how they'll improve or contribute to improving gross margin in the future. But there's a lot of things going on across the whole of the portfolio.

Speaker #1: That allows us to buy a little smarter . So , you know , I think we'll probably figure out a way to how to be articulate more how about , you know , some of these operational how they'll improve initiatives and or contribute to improving gross margin in the future .

Speaker #1: But know , there's a there's a lot , you of things going on across the whole of the portfolio .

Speaker #5: Thank you .

Speaker #3: Thank you. Our next question comes from Mike Albanese with Benchmark Stone. Your line is open.

Craig R. Kennison: Thank you.

Tristan Thomas: Thank you.

Operator: Thank you. Our next question comes from Mike Albanese with The Benchmark Company. Your line is open.

Speaker #6: Yeah . Hey good morning guys . Thanks for taking my question . You know , nice to see some momentum in the business here .

Speaker #6: Just quickly on Grand Design motor . Could you just comment on you're tracking , you know , where relative to your expectations as it relates to kind of that initial 100 million dealer stock ?

Michael J. Happe: Yeah. Hey, good morning, guys. Thanks for taking my question. Nice to see some momentum in the business here. Just quickly on Grand Design motorhomes, could you just comment on where you're tracking relative to your expectations as it relates to kind of that initial $100 million dealer stock?

Michael Albanese: Yeah. Hey, good morning, guys. Thanks for taking my question. Nice to see some momentum in the business here. Just quickly on Grand Design motorhomes, could you just comment on where you're tracking relative to your expectations as it relates to kind of that initial $100 million dealer stock?

Speaker #1: had mentioned in our Yeah , we fiscal 25 year that grand design motorized would exceed $100 million in net revenue . And and in fact , for the year that ended in August , we reach that did goal .

Michael J. Happe: Yeah. We had mentioned in our fiscal 2025 year that Grand Design Motorized would exceed $100 million in net revenue. In fact, for the year that ended in August, we did reach that goal. The great news about the Grand Design Motorized strategy is that it's multi-year in its formation. We have, candidly, a three- to five-year plan on making Grand Design Motorized one of the most exciting brands in the motorized segment. We've already reached more than four points of market share 15 months into this journey. Many of the products that are on the wish list at Grand Design from a motorized perspective have not seen the light of day yet in the market. So we are really pleased with the products that have been released.

Michael Happe: Yeah. We had mentioned in our fiscal 2025 year that Grand Design Motorized would exceed $100 million in net revenue. In fact, for the year that ended in August, we did reach that goal. The great news about the Grand Design Motorized strategy is that it's multi-year in its formation. We have, candidly, a three- to five-year plan on making Grand Design Motorized one of the most exciting brands in the motorized segment. We've already reached more than four points of market share 15 months into this journey. Many of the products that are on the wish list at Grand Design from a motorized perspective have not seen the light of day yet in the market. So we are really pleased with the products that have been released.

Speaker #1: The great news about the grand design motorized strategy is that it's multi-year in its formation . We have a candidly , a 3 to 5 year plan on making grand design motorized .

Speaker #1: One of the most exciting brands in the motorized segment . We've already reached more than four points market share of 15 months into this , to this journey many , and of the products that are on list at Grand from a Design motorized perspective , have the wish not seen the light of day yet .

Speaker #1: the In market . So we are we are really pleased with the products that have been released , even some things that , you know , candidly , I personally wasn't would sure how the react to , like the series F lineage supersede .

Michael J. Happe: Even some things that, candidly, I personally wasn't sure how the market would react to, like the Lineage Series F Super C, that's been fantastic. The market has reacted very strongly. And as you all know, the Super C category has been one of those sort of hot, trendy categories in motorized RVs the last several years. So we're on track, if not ahead of our plan. We just gave our board an update on this here recently as well. So we anticipate fiscal 2026 to benefit, but from the continued progression, not just at wholesale, but in the market, and with our dealer relationships from the retail success that we're beginning to see across their line. So very excited about that particular business initiative.

Even some things that, candidly, I personally wasn't sure how the market would react to, like the Lineage Series F Super C, that's been fantastic. The market has reacted very strongly. And as you all know, the Super C category has been one of those sort of hot, trendy categories in motorized RVs the last several years. So we're on track, if not ahead of our plan. We just gave our board an update on this here recently as well. So we anticipate fiscal 2026 to benefit, but from the continued progression, not just at wholesale, but in the market, and with our dealer relationships from the retail success that we're beginning to see across their line. So very excited about that particular business initiative.

Speaker #1: That's been fantastic . The market has reacted very strongly and as you you all know , the super C category has been one of those sort trendy of hot , categories in motorized RVs over the last several years .

Speaker #1: So , so we're on track , if not ahead of our plan . We just gave our update board an on this here recently as well .

Speaker #1: So we we anticipate , you know , fiscal 26 to benefit from the continued progression , not just at wholesale but in the market and with our dealer relationships from the retail success that we're beginning to see across their lines .

Speaker #1: So very , very excited about that particular business initiative . Yeah . And the series for that matter . The grand Design motor M is already number two .

Speaker #1: Number three in its class series for retail share. So just a phenomenal entry point by that particular model and floor plan.

Craig R. Kennison: Yeah. The Series M, for that matter, the Grand Design Motorhome Series M is already number two, number three in its class for retail share. So just a phenomenal entry point by that particular model and floor plan. Then similarly, as Mike was just talking about the Class F, the Super C has already achieved a top three rating as well in retail. So the two models that they've come forward with have both hit the market extremely well, both from a retail and wholesale perspective.

Bryan Hughes: Yeah. The Series M, for that matter, the Grand Design Motorhome Series M is already number two, number three in its class for retail share. So just a phenomenal entry point by that particular model and floor plan. Then similarly, as Mike was just talking about the Class F, the Super C has already achieved a top three rating as well in retail. So the two models that they've come forward with have both hit the market extremely well, both from a retail and wholesale perspective.

Speaker #1: And then, similarly as Mike was just talking about the Class F, the Super C has already achieved a top three rating as well in retail.

Speaker #1: So two models that they've come forward with, you have both hit the nail extremely well, both from a retail and wholesale market perspective.

Speaker #6: That's great context . Thank you . That just quick follow up that you know initial stock if you will , for some of these new models .

Speaker #6: I mean, how would you frame the opportunity size relative to the original lineage that came out? And yeah, as I'm just trying to think about growth here as new models are implemented.

Michael J. Happe: That's great context. Thank you. Just quick follow-up, that initial stock, if you will, for some of these new models, I mean, how would you frame the opportunity size relative to the original Lineage that came out? And yeah, as I'm just trying to think about growth here as new models are implemented.

Michael Albanese: That's great context. Thank you. Just quick follow-up, that initial stock, if you will, for some of these new models, I mean, how would you frame the opportunity size relative to the original Lineage that came out? And yeah, as I'm just trying to think about growth here as new models are implemented.

Speaker #1: Yeah , Michael , we're not sharing a target specific number for grand design , motorized for fiscal 26 as it becomes a more meaningful part of the portfolio .

Michael J. Happe: Yeah, Michael, we're not sharing a specific target number for Grand Design Motorized for fiscal 2026 as it becomes a more meaningful part of the portfolio. We tend to obviously share disclosure by segment, but you can expect it to grow. We won't provide a sales target this morning. Some of the back half wholesale volume will certainly be dependent on retail replenishment of current models in the field, in addition to any new products that you'll see Grand Design Motorized bring to the market as well.

Michael Happe: Yeah, Michael, we're not sharing a specific target number for Grand Design Motorized for fiscal 2026 as it becomes a more meaningful part of the portfolio. We tend to obviously share disclosure by segment, but you can expect it to grow. We won't provide a sales target this morning. Some of the back half wholesale volume will certainly be dependent on retail replenishment of current models in the field, in addition to any new products that you'll see Grand Design Motorized bring to the market as well.

Speaker #1: You know , we tend to obviously share disclosure by segment , but expect it to grow . You know , we we won't provide a , you you can know , a sales target this morning .

Speaker #1: Some of the back half wholesale volume will certainly be dependent on retail current of models in the field, in addition to any new products that you'll see.

Speaker #1: Grand Design, motorized, bring to the market. You know as well.

Speaker #6: Fair enough . Thanks . And then just another quick one , if I may . I just want to follow up on makeshift , you know , some selective price increases .

Michael J. Happe: Fair enough. Thanks. And then just another quick one, if I may. I just want to follow up on mixed shifts. Obviously, you have some selective price increases. You come out with new models across the board to kind of meet consumers where they're at from an affordability standpoint. Just taking a step back here and thinking about the overall mixed shift from the consumer, they've obviously, over the last couple of years, gravitated towards those value products. I mean, are we still moving in that direction, or has that kind of stabilized? And again, that's a little more industry-specific than company-specific because you have some initiatives that are obviously affecting mixed shift within your portfolio, but.

Michael Albanese: Fair enough. Thanks. And then just another quick one, if I may. I just want to follow up on mixed shifts. Obviously, you have some selective price increases. You come out with new models across the board to kind of meet consumers where they're at from an affordability standpoint. Just taking a step back here and thinking about the overall mixed shift from the consumer, they've obviously, over the last couple of years, gravitated towards those value products. I mean, are we still moving in that direction, or has that kind of stabilized? And again, that's a little more industry-specific than company-specific because you have some initiatives that are obviously affecting mixed shift within your portfolio, but.

Speaker #6: You come out with new models across the board to kind of meet consumers where their affordability is at from a pricing standpoint. Just taking a step back here and thinking about the overall mix shift from the consumer.

Speaker #6: They've obviously over the last couple of years have gravitated toward towards those value products . I mean , are we still moving in that direction or kind of has that stabilized ?

Speaker #6: And again , that's a little more industry specific than company specific some because you have initiatives that are obviously affecting makeshift within your portfolio .

Speaker #6: But .

Speaker #1: Yeah , I don't think the consumer has stabilized quite yet from an affordability perspective . I mean , as you guys are well aware , there's there's there's a lot of chatter in the financial media and many industries about , you know , consumer affordability , particularly of discretionary higher priced items .

Michael J. Happe: Yeah. I don't think the consumer has stabilized quite yet from an affordability perspective. I mean, as you guys are well aware, there's a lot of chatter in the financial media and many industries about consumer affordability, particularly of discretionary higher-priced items. I'll tell you this. We're kind of playing the game at both ends. We have absolutely improved our lower price point products almost in every brand that we carry. And so while we sometimes don't get that first-time buyer, we have a better chance through some of the products that we've introduced here recently with Access in the Winnebago Towables line, Transcend One in the Grand Design line. The Aria from Barletta continues to do fantastic. But when I say we're playing both ends, we're also introducing products with higher price points that are being successful as well.

Michael Happe: Yeah. I don't think the consumer has stabilized quite yet from an affordability perspective. I mean, as you guys are well aware, there's a lot of chatter in the financial media and many industries about consumer affordability, particularly of discretionary higher-priced items. I'll tell you this. We're kind of playing the game at both ends. We have absolutely improved our lower price point products almost in every brand that we carry. And so while we sometimes don't get that first-time buyer, we have a better chance through some of the products that we've introduced here recently with Access in the Winnebago Towables line, Transcend One in the Grand Design line. The Aria from Barletta continues to do fantastic. But when I say we're playing both ends, we're also introducing products with higher price points that are being successful as well.

Speaker #1: I'll tell you this, we're kind of playing the game at both ends. We have absolutely improved our lower price point products almost in every brand that we carry.

Speaker #1: And so while we sometimes don't get that first time buyer , we have a better chance through some of the products that we've introduced here recently with access in the Winnebago Towables line , transcend one in the in the grand design line , the Aria from continues to Barletta to do fantastic .

Speaker #1: But when I say we're both ends, we're also introducing playing products with higher price points that are being successful as well.

Speaker #1: The supersede products from Newmar and Grand Design are a example of good that . You know , some of Barletta's best performing brands continue to be in the higher side of The the Lusso , of which their line .

Michael J. Happe: The SuperC products from Newmar and Grand Design are a good example of that. Some of Barletta's best-performing brands continue to be in the higher side of their line. The Luso, of which I own a Luso myself, that continues to be a really strong performer in the Barletta line. That's probably one of their top two or three brands in the whole catalog. So we're going to try to have a broad, full lineup within BetterBest within our segments and not only attract more affordable consumers, but those consumers who also have a little higher level of discernment and will trade up, buy up, and expect the best as well. We don't talk a lot about retail dollar share on the call, candidly, because we don't have the greatest data here at Winnebago Industries.

The SuperC products from Newmar and Grand Design are a good example of that. Some of Barletta's best-performing brands continue to be in the higher side of their line. The Luso, of which I own a Luso myself, that continues to be a really strong performer in the Barletta line. That's probably one of their top two or three brands in the whole catalog. So we're going to try to have a broad, full lineup within BetterBest within our segments and not only attract more affordable consumers, but those consumers who also have a little higher level of discernment and will trade up, buy up, and expect the best as well. We don't talk a lot about retail dollar share on the call, candidly, because we don't have the greatest data here at Winnebago Industries.

Speaker #1: a Lusso myself that continues to be a really strong performer in the in the Barletta line . And that's probably their , you know , one of their top 2 or 3 brands in the whole catalog .

Speaker #1: And so we're going to , we're to have a broad full lineup within better going to try best within our segments . And not only more attract affordable consumers , but those those consumers who also have a little higher level of discernment and will trade up by up and expect the well .

Speaker #1: So we best as don't talk a lot about retail share on the call, candidly, because we don't really have the greatest data here at Winnebago Industries Inc.

Speaker #1: But I'm really confident that if you look at the combination of our unit retail volume and our ASP trends versus the rest of the market, that we're actually gaining retail market share in both the RV and marine industry.

Michael J. Happe: I'm really confident that if you look at the combination of our unit retail volume and our ASP trends versus the rest of the market, that we're actually gaining retail market share in both the RV and marine industry. I think that's just as important as unit volume. You take dollars to the bank, and those retail dollars ultimately are really, really valuable to us.

I'm really confident that if you look at the combination of our unit retail volume and our ASP trends versus the rest of the market, that we're actually gaining retail market share in both the RV and marine industry. I think that's just as important as unit volume. You take dollars to the bank, and those retail dollars ultimately are really, really valuable to us.

Speaker #1: And I just think that's as important as unit volume. You know, dollars that you take to the bank—and those retail dollars, you know, ultimately are really, really valuable to us.

Speaker #1: Yeah .

Speaker #7: As it relates to mix is that , you know , we welcome the the more recent strength in both retail and wholesale growth in the motor home business .

Craig R. Kennison: The only other thing I'd add as it relates to mix is that we welcome the more recent strength in both retail and wholesale growth in the motorhome business. As I think everyone on the call understands, motorhome for a long time had been seeing declines. More recently, we're finally starting to see that show year-over-year improvement. We welcome that trend as well, particularly as it relates to our portfolio business.

Bryan Hughes: The only other thing I'd add as it relates to mix is that we welcome the more recent strength in both retail and wholesale growth in the motorhome business. As I think everyone on the call understands, motorhome for a long time had been seeing declines. More recently, we're finally starting to see that show year-over-year improvement. We welcome that trend as well, particularly as it relates to our portfolio business.

Speaker #7: You know , as I think everyone on the call understands motor home for a long time had been seeing declines and more recently we're finally starting to see that show year over year improvement .

Speaker #7: So we welcome that trend as well, particularly as it relates to our portfolio business.

Speaker #6: Got it . Great context . Appreciate it . Nice guys . Thank you .

Speaker #1: Thank you Mike .

Michael J. Happe: Got it. Great context. Appreciate it. Nice quarter, guys. Thank you.

Michael Albanese: Got it. Great context. Appreciate it. Nice quarter, guys. Thank you.

Speaker #3: Thank you. Our next question comes from Brett Jordan with Jefferies. Your line is open.

Michael J. Happe: Thank you, Mike.

Michael Happe: Thank you, Mike.

Speaker #3: . Hey good

Speaker #8: morning guys .

Speaker #1: Morning , Bret .

Operator: Thank you. Our next question comes from Brett Jordan with Jefferies. Your line is open.

Speaker #8: everything's Pretty much been asked , but I guess one macro question when you about your think forecast for what is the 26 , assumption on on sort of a rate backdrop ?

Joseph Nicholas Altobello: Hey, good morning, guys.

Bret Jordan: Hey, good morning, guys.

Michael J. Happe: Morning, Brett.

Michael Happe: Morning, Brett.

Joseph Nicholas Altobello: Pretty much everything's been asked. But I guess one macro question. When you think about your forecast for 2026, what is the assumption on sort of a rate backdrop and what kind of Fed move would make you either more positive or negative on that outlook?

Bret Jordan: Pretty much everything's been asked. But I guess one macro question. When you think about your forecast for 2026, what is the assumption on sort of a rate backdrop and what kind of Fed move would make you either more positive or negative on that outlook?

Speaker #8: And you know, what kind of, you know, Fed move would make you either more positive or negative on that outlook?

Speaker #7: Yeah . But this is Brian . You know , he hesitate to to draw too much correlation . You know to action . We fed are anticipating from a macro perspective another 2 to 325 point cuts .

Craig R. Kennison: Yeah, Brett, this is Brian. You hesitate to draw too much correlation to Fed action. We are anticipating, from a macro perspective, another two to three 25-point cuts over the next year. I think that that's the prevailing expectation and how the bond market's priced out right now. What happens to the 10-year, as I think you know, Brett, is probably more important for our industry as it relates to floor plan financing costs as well as retail financing. So we'll keep a close eye on that. There's differing points of view, I think, as to what will happen with the 10-year rate as it relates to the correlation between that and the Fed funds rate. But that's kind of how we're thinking about it right now.

Bryan Hughes: Yeah, Brett, this is Bryan. You hesitate to draw too much correlation to Fed action. We are anticipating, from a macro perspective, another two to three 25-point cuts over the next year. I think that that's the prevailing expectation and how the bond market's priced out right now. What happens to the 10-year, as I think you know, Brett, is probably more important for our industry as it relates to floor plan financing costs as well as retail financing. So we'll keep a close eye on that. There's differing points of view, I think, as to what will happen with the 10-year rate as it relates to the correlation between that and the Fed funds rate. But that's kind of how we're thinking about it right now.

Speaker #7: Over the next year . I think that that's the prevailing expectation and how the bond market is priced out right what now . You know happens to the ten year as I think you know , Bret , is probably more important for our industry as it relates to floor plan financing costs as well as retail financing .

Speaker #7: So we'll keep eye on a close that . You know , there's differing points of view , I think , as to what will the happen with ten year rate , you know , as it relates to the correlation between that and the fed funds rate .

Speaker #7: But that's kind of how we're thinking about it right now.

Speaker #8: Okay, great. Thank you.

Speaker #7: bet You .

Joseph Nicholas Altobello: Okay. Great. Thank you.

Bret Jordan: Okay. Great. Thank you.

Speaker #3: Thank you. Our next question comes from Noah Zakin with KeyBanc Capital Markets. Your line is open.

Craig R. Kennison: You bet.

Bryan Hughes: You bet.

Speaker #9: Hi . Thanks for taking my questions . I first , guess just on the margin recapture initiatives that Winnebago motorhomes you touched on this a bit , but any way to quantify kind of the magnitude of those initiatives on the improvement in motorized margins in the quarter ?

Operator: Thank you. Our next question comes from Noah Zatskin with KeyBank Capital Markets. Your line is open.

Bryan L. Hughes: Hi. Thanks for taking my questions. I guess first, just on the margin recapture initiatives at Winnebago Motorhomes, you touched on this a bit, but any way to quantify kind of the magnitude of those initiatives on the improvement in motorized margins in the quarter? And then just kind of thinking through where you are, maybe in terms of innings or opportunity that's kind of left from a margin perspective structurally moving forward, any thoughts would be helpful. Thanks.

Noah Zatzkin: Hi. Thanks for taking my questions. I guess first, just on the margin recapture initiatives at Winnebago Motorhomes, you touched on this a bit, but any way to quantify kind of the magnitude of those initiatives on the improvement in motorized margins in the quarter? And then just kind of thinking through where you are, maybe in terms of innings or opportunity that's kind of left from a margin perspective structurally moving forward, any thoughts would be helpful. Thanks.

Speaker #9: And then just kind of thinking through, like, where you are maybe, like, in terms of innings or other opportunity, that's a margin left from, kind of, perspective, structurally moving forward. Any thoughts would be helpful.

Speaker #9: Thanks .

Speaker #1: Yeah . Good morning the Noah . Thanks for questions . Let me comment first on the Winnebago Motor home side . And then Brian obviously can give you some further perspectives on margin trends and opportunities for the .

Michael J. Happe: Yeah. Good morning, Noah. Thanks for the questions. Let me comment first on the Winnebago Motorhomes side. And then Brian obviously can give you some further perspectives on margin trends and opportunities for the business. I'll be very transparent that the Winnebago Motorhomes margin improvement contribution to Q1 was not as significant as some of the other motorized contributors in that segment, which means from a positive standpoint that the contributions of a stronger Winnebago Motorhomes business are still ahead of us, not just in fiscal 2026, but fiscal 2027. That particular business is obviously our flagship legacy business. We're very busy there under Chris West's leadership and his team to improve that business. But I would not tell you that the financial benefits of that business are being quite felt yet within the Q1 financials. But the expectation is that those do grow sequentially in the future.

Michael Happe: Yeah. Good morning, Noah. Thanks for the questions. Let me comment first on the Winnebago Motorhomes side. And then Bryan obviously can give you some further perspectives on margin trends and opportunities for the business. I'll be very transparent that the Winnebago Motorhomes margin improvement contribution to Q1 was not as significant as some of the other motorized contributors in that segment, which means from a positive standpoint that the contributions of a stronger Winnebago Motorhomes business are still ahead of us, not just in fiscal 2026, but fiscal 2027. That particular business is obviously our flagship legacy business. We're very busy there under Chris West's leadership and his team to improve that business. But I would not tell you that the financial benefits of that business are being quite felt yet within the Q1 financials. But the expectation is that those do grow sequentially in the future.

Speaker #1: I'll be very business transparent that the Winnebago Motor Home margin improvement contribution to was Q1 not as significant as some of some of the other motorized that contributors in segment , which means from a positive standpoint , that the contributions of of a stronger Winnebago motor home business are still ahead of us , not just in fiscal 26 , but fiscal 27 .

Speaker #1: That particular business is obviously our flagship legacy business. We're very busy there under Chris West's leadership and his to improve that business, but I would not tell team you that the financial that benefits of business being quite felt.

Speaker #1: Yet with where we are within the Q1 financials. But the expectation is that those do grow sequentially in the future. So we're not providing specific, you know, dollar references there.

Speaker #1: But, but, but that journey should become a bigger contributor in the—

Michael J. Happe: We're not providing specific dollar references there, but that journey should become a bigger contributor in the future.

We're not providing specific dollar references there, but that journey should become a bigger contributor in the future.

Speaker #7: Guess what, I'd—yeah, I'd add on.

Speaker #7: one Noah , is , you know , we gave guidance that the motor home segment would reach O-i yield in the single low digits .

Craig R. Kennison: Yeah. I guess what I'd add on that one, Noah, is we gave guidance that the motorhome segment would reach OI yield in the low single digits. We stand by that guidance. That compares to a negative 0.6%, so slightly negative OI yield in 2025. So that continues to be our target. Hey, I think we saw a good proof point in Q1, some good improvement there. A lot of the improvements longer term, including the back half of this fiscal year, are tied to the product and the new introductions, the refreshes that the team is working very hard on. And as Mike alluded to, some of those are yet to really impact the yield. So we look for continued improvement there long-term, but we like what we saw in Q1 here as it relates to an initial proof point.

Bryan Hughes: Yeah. I guess what I'd add on that one, Noah, is we gave guidance that the motorhome segment would reach OI yield in the low single digits. We stand by that guidance. That compares to a negative 0.6%, so slightly negative OI yield in 2025. So that continues to be our target. Hey, I think we saw a good proof point in Q1, some good improvement there. A lot of the improvements longer term, including the back half of this fiscal year, are tied to the product and the new introductions, the refreshes that the team is working very hard on. And as Mike alluded to, some of those are yet to really impact the yield. So we look for continued improvement there long-term, but we like what we saw in Q1 here as it relates to an initial proof point.

Speaker #7: We stand by that guidance . You know , that compares to a -0.6% . So a slightly negative future . yield in 25 .

Speaker #7: That, so, continues to be our target. Hey, I think we saw a good proof point in Q1. You know, some good improvement there.

Speaker #7: A lot of the improvements longer term, including the back half of this fiscal year, are tied to the product and the new introductions.

Speaker #7: The refreshes that the team is working very hard on, and as Mike alluded to, some of those are yet to really impact yield.

Speaker #7: So we look for continued improvement there long term. But we like what we saw in Q1 here as it relates to an initial point.

Speaker #9: That's really helpful .

Speaker #9: one more thinking about this from from an industry perspective , I think motorized shipments have been kind of stronger , proof at least year year over overall for the late industry of .

Bryan L. Hughes: That's really helpful. Maybe just one more. Thinking about this from an industry perspective, I think motorized shipments have been kind of stronger, at least year over year overall for the industry of late. When you think about kind of inventory levels there for the industry as well as drivers of that, is that more that that level's kind of got lower than ideal, or what's kind of driven that pop? I know for you guys, part of that obviously is the new product, but more broadly. Thanks.

Noah Zatzkin: That's really helpful. Maybe just one more. Thinking about this from an industry perspective, I think motorized shipments have been kind of stronger, at least year over year overall for the industry of late. When you think about kind of inventory levels there for the industry as well as drivers of that, is that more that that level's kind of got lower than ideal, or what's kind of driven that pop? I know for you guys, part of that obviously is the new product, but more broadly. Thanks.

Speaker #9: When you think about kind of levels inventory there for the industry as well as drivers of that , is that more that that levels kind of got lower than ideal than or what's kind of driven that pop I know for you guys , part of that obviously is the new But but more broadly , thanks .

Speaker #1: within that Noah , segment vary by class . so , you know , the class A consumer has been soft for , And for really , you know , a few years now , recently we've seen the class B van category , you know , not have the same vigor that it used to have in prior years .

Michael J. Happe: Well, I think the trends, Noah, within that segment vary by class. The Class A consumer has been soft for really a few years now. Recently, we've seen the Class B van category not have the same vigor that it used to have in prior years. The two segments that have been very strong have been Class C, traditional Class Cs, both diesel and gas, but also Super Cs. That's where you've seen a lot of dealers, I believe, shift their recent inventory management practices to making sure that they have the products that they want to have in the Class C space. We're watching that Class C category carefully. It's pretty crowded. There's a lot of competition. I would say the turns in that Class C category probably need to be a little bit higher in the future.

Michael Happe: Well, I think the trends, Noah, within that segment vary by class. The Class A consumer has been soft for really a few years now. Recently, we've seen the Class B van category not have the same vigor that it used to have in prior years. The two segments that have been very strong have been Class C, traditional Class Cs, both diesel and gas, but also Super Cs. That's where you've seen a lot of dealers, I believe, shift their recent inventory management practices to making sure that they have the products that they want to have in the Class C space. We're watching that Class C category carefully. It's pretty crowded. There's a lot of competition. I would say the turns in that Class C category probably need to be a little bit higher in the future.

Speaker #1: We're watching that class C category carefully . It's pretty crowded . There's a lot of competition . And and I would say the turns in that class C category probably need to be a little bit higher in the future , and hopefully see some we'll retail momentum in calendar 26 to help the whole industry .

Speaker #1: You know , get get the get the inventory in that particular segment , maybe in even little bit better shape . But but you know , I don't I don't think , you know , we're overly concerned .

Michael J. Happe: And hopefully, we'll see some retail momentum in calendar '26 to help the whole industry get the inventory in that particular segment, maybe even in a little bit better shape. But I don't think we're overly concerned. The dealers are putting their bets there, and obviously, the OEMs are working closely with them. I don't know, Brian, if you'd add anything.

And hopefully, we'll see some retail momentum in calendar '26 to help the whole industry get the inventory in that particular segment, maybe even in a little bit better shape. But I don't think we're overly concerned. The dealers are putting their bets there, and obviously, the OEMs are working closely with them. I don't know, Bryan, if you'd add anything.

Speaker #1: You know the dealers are putting their , their bets . There . And obviously the are , OEMs are working them . I know , Brian , have you

Speaker #1: closely with Just

Speaker #7: One small add. You know, we

Speaker #7: About our dealer inventory, we're in a really good position. We saw a pretty sizable decline year over year—19% in inventories out in the field.

Craig R. Kennison: Yeah. Just one small add. We feel really good about our dealer inventory position. We saw a pretty sizable decline year over year, 19% in inventories out in the field. And that is even with the launch of the Grand Design motorhome and the stocking up in the field of that business, the Series M and F. So we feel really good about our position there. And I think that that will serve us well throughout fiscal 2026.

Bryan Hughes: Yeah. Just one small add. We feel really good about our dealer inventory position. We saw a pretty sizable decline year over year, 19% in inventories out in the field. And that is even with the launch of the Grand Design motorhome and the stocking up in the field of that business, the Series M and F. So we feel really good about our position there. And I think that that will serve us well throughout fiscal 2026.

Speaker #3: you . Our next question comes from John Healey with Northcoast . Research . Your line is open .

Bryan L. Hughes: Thank you.

Noah Zatzkin: Thank you.

Speaker #10: Thanks for taking my question. I wanted to ask one about the kind of margin outlook in the business and how it ties into the tariff environment.

Operator: Thank you. Our next question comes from John Healy with North Coast Research. Your line is open.

Michael J. Happe: Thanks for taking my question. I wanted to ask one about kind of the margin outlook in the business and how it ties into the tariff environment we're in. Mike, I know you've mentioned numerous times on the call that you guys are working on sourcing, working with your suppliers. You're doing all the things that we would expect you to. But I was curious if there's been any development in terms of tying cost and input costs to the actual tariff environments. Have you been able to develop any sort of linkage? So theoretically, if we do get some relief on tariffs and maybe certain ones kind of go to the wayside in calendar 2026, is there any sort of kind of automatic kind of indexed type relief that you would get?

John Healy: Thanks for taking my question. I wanted to ask one about kind of the margin outlook in the business and how it ties into the tariff environment we're in. Mike, I know you've mentioned numerous times on the call that you guys are working on sourcing, working with your suppliers. You're doing all the things that we would expect you to. But I was curious if there's been any development in terms of tying cost and input costs to the actual tariff environments. Have you been able to develop any sort of linkage? So theoretically, if we do get some relief on tariffs and maybe certain ones kind of go to the wayside in calendar 2026, is there any sort of kind of automatic kind of indexed type relief that you would get?

Speaker #10: We're in . You know , Mike , I know you've mentioned numerous times on the call that you guys are working on sourcing , working with your , you know , suppliers , you're doing all the things that we would expect you to , but I curious if there's been any was development in terms of cost and tying input costs to the actual tariff environments .

Speaker #10: Is have you been able to develop any sort of linkage so theoretically , if we do get some relief on tariffs and maybe certain ones kind of go to the wayside and calendar 26 , is there any kind of sort of kind automatic of indexed type relief that you would get , or is this going to be a situation where you have to go back and try to price dollars out of some and , you know things , hypothetically , is there a view with your suppliers that , hey , we need to maybe of this share more or work with more of this than there was six months ago to to impact and just solve this affordability issue .

Michael J. Happe: Or is this going to be a situation where you have to go back and try to price some dollars out of things? And hypothetically, is there a view with your suppliers that, "Hey, we need to maybe share more of this or work with more of this than there was six months ago just to impact and solve this affordability issue?" Because when I listen to the calls of your industry, everyone talks about affordability and interest rates, but it seems like there could be more give back with the suppliers and the sourcing community. So I was hoping to hear your thoughts on that. Thanks.

Or is this going to be a situation where you have to go back and try to price some dollars out of things? And hypothetically, is there a view with your suppliers that, "Hey, we need to maybe share more of this or work with more of this than there was six months ago just to impact and solve this affordability issue?" Because when I listen to the calls of your industry, everyone talks about affordability and interest rates, but it seems like there could be more give back with the suppliers and the sourcing community. So I was hoping to hear your thoughts on that. Thanks.

Speaker #10: Because when I listen to calls of your industry , everyone talks about affordability and interest rates . But you know , it seems like there could be more give back with the suppliers and the sourcing community .

Speaker #10: So, I was hoping to hear your thoughts on that. Thanks.

Speaker #1: Thank you, John, for the question. So, there are multiple dimensions to what you talked about. Let me try to break it down efficiently here.

Michael J. Happe: Thank you, John, for the question. So multiple dimensions to what you talked about. Let me try to break it down efficiently here. We have a very robust tariff exposure risk management process in the company. It extends from our centralized strategic sourcing function as the air traffic control tower on that to deep within the businesses in terms of their day-to-day relationships with suppliers. I think we feel good that there's a high level of transparency by our tier one suppliers as to the tariff pressures that they have been experiencing. They're not always the importer of record. They have either tier two or tier three supply relationships that pass those costs up to them. And in many cases, our suppliers have agreed to defer and/or share the increased tariff costs that we've seen since April 2025. But that's on a case-by-case basis.

Michael Happe: Thank you, John, for the question. So multiple dimensions to what you talked about. Let me try to break it down efficiently here. We have a very robust tariff exposure risk management process in the company. It extends from our centralized strategic sourcing function as the air traffic control tower on that to deep within the businesses in terms of their day-to-day relationships with suppliers. I think we feel good that there's a high level of transparency by our tier one suppliers as to the tariff pressures that they have been experiencing. They're not always the importer of record. They have either tier two or tier three supply relationships that pass those costs up to them. And in many cases, our suppliers have agreed to defer and/or share the increased tariff costs that we've seen since April 2025. But that's on a case-by-case basis.

Speaker #1: We have a very robust tariff exposure risk management process in the company. It extends from our centralized strategic sourcing function, as the air traffic control tower on that, to deep within the businesses in terms of their day-to-day relationships with suppliers.

Speaker #1: I think we feel good that there's a high level of transparency by our tier one suppliers. As to the tariff pressures that they have been experiencing, they're not always the importer of record.

Speaker #1: They either have tier two or tier three supply you know , past . Those costs up to . And in relationships that cases , our them suppliers have agreed to defer and or share the increased tariff costs that we've seen since April of 2025 .

Speaker #1: But that's on a case by case basis . And and it's one of those cases where , where if you don't ask , may not you get that as an initial response , but but our supply chain partnerships have been have been good there .

Michael J. Happe: And it's one of those cases where if you don't ask, you may not get that as an initial response. But our supply chain partnerships have been good there. We've also done a lot of other things in terms of engineering design, bill of material management, working through some of our own raw materials and component inventory to try to be creative and mitigate that. And so while that's been a Herculean exercise for really the last eight, nine months, we feel good about managing the exposure. And as I said earlier, Brian's guidance here this morning embeds that into our earnings outlook for fiscal 2026.

And it's one of those cases where if you don't ask, you may not get that as an initial response. But our supply chain partnerships have been good there. We've also done a lot of other things in terms of engineering design, bill of material management, working through some of our own raw materials and component inventory to try to be creative and mitigate that. And so while that's been a Herculean exercise for really the last eight, nine months, we feel good about managing the exposure. And as I said earlier, Bryan's guidance here this morning embeds that into our earnings outlook for fiscal 2026.

Speaker #1: We've also done a lot of other things in terms of engineering , design , bill of material management , working through some of our own raw materials and and component inventory to try to be creative and mitigate that .

Speaker #1: And so while that's been a Herculean exercise for really the last eight, nine months, we about feel good managing the exposure.

Speaker #1: And as I said earlier, the Bryan's guidance here this morning embeds that into our earnings outlook for fiscal '26. Now overall, should the Supreme Court make the decision?

Speaker #1: That the Iipa tariff , you know , powers , you know , are no longer and there is some sort of refund process , we'll have to digest that very quickly and obviously work with our supply chain to see what that means from a possible recovery standpoint .

Michael J. Happe: Now, overall, should the Supreme Court make the decision that the IEEPA tariff powers are no longer and there is some sort of refund process, we'll have to digest that very quickly and obviously work with our supply chain to see what that means from a possible recovery standpoint going forward. Just in general, though, we are maturing in our muscle building on just, again, as I said earlier, trying to manage our material costs within the company. Each of our businesses and brands has a significant target for fiscal 2026 to secure some savings. That doesn't always necessarily mean that's a bad thing for our supply chain. That just may mean that we're going about our purchasing just a little bit differently as well. There could be some consolidation of how many suppliers we use on a certain part.

Now, overall, should the Supreme Court make the decision that the IEEPA tariff powers are no longer and there is some sort of refund process, we'll have to digest that very quickly and obviously work with our supply chain to see what that means from a possible recovery standpoint going forward. Just in general, though, we are maturing in our muscle building on just, again, as I said earlier, trying to manage our material costs within the company. Each of our businesses and brands has a significant target for fiscal 2026 to secure some savings. That doesn't always necessarily mean that's a bad thing for our supply chain. That just may mean that we're going about our purchasing just a little bit differently as well. There could be some consolidation of how many suppliers we use on a certain part.

Speaker #1: Going , going forward . Just in general , though , we are we are maturing in our muscle building on just again , as I said earlier , trying to manage our material costs within the company .

Speaker #1: And they're each each of our businesses and brands has a significant target for fiscal 26 to , you know , to secure some savings .

Speaker #1: And that doesn't always necessarily mean that's a bad thing for our supply chain; that just may mean that we're going about our purchasing just a little differently as well.

Speaker #1: And there could be some consolidation of how many suppliers we use on a certain part. So all of that is kind of baked into this.

Speaker #1: You know , I think 40% plus increase in EPs year over year . it's one of the controllables quote It's unquote , that we believe that we can execute , know , in you the year .

Michael J. Happe: So all of that is kind of baked into this, I think, 40% plus increase in EPS year over year. It's one of the "controllables," quote-unquote, that we believe that we can execute in the year. But tariffs continue to be very top of mind, and we'll manage those for as long as that pressure is upon us. But you're absolutely right that any input pressure cost-wise in this industry is non-constructive versus dealing with consumer affordability right now. We all need to try to find a way to make the products more affordable ultimately.

So all of that is kind of baked into this, I think, 40% plus increase in EPS year over year. It's one of the "controllables," quote-unquote, that we believe that we can execute in the year. But tariffs continue to be very top of mind, and we'll manage those for as long as that pressure is upon us. But you're absolutely right that any input pressure cost-wise in this industry is non-constructive versus dealing with consumer affordability right now. We all need to try to find a way to make the products more affordable ultimately.

Speaker #1: But tariffs continue to be very mind . top of And , and , and and we'll manage those for as long as that pressure is , is upon us .

Speaker #1: But you're absolutely right that any input pressure costs, this wise in industry, is non-constructive versus dealing with consumer affordability. Right now, we all need to try to find a way to make the products more affordable.

Speaker #1: Ultimately .

Speaker #10: Great. Thank you, Mike.

Speaker #3: Operator One last question . you . And as thank we have time for one last question , our question comes final from David Winston Your line is with Morningstar .

Michael J. Happe: Great. Thank you, Mike.

John Healy: Great. Thank you, Mike.

Craig R. Kennison: One last question, Operator.

Michael Happe: One last question, Operator.

Speaker #3: open .

Operator: Thank you. As we have time for one last question, our final question comes from David Wiston with Morningstar. Your line is open.

Speaker #2: Good morning guys . Thanks . Just one question . For me . It's on the success driver slide . You talked about in Newmar having competitiveness and lower segments .

Michael J. Happe: Good morning, guys. Thanks. Just one question for me. It's on the success driver side. You talked about in Newmar having competitiveness in lower price segments. Are we talking just new product there, or are you actually talking about price reductions? Because that's a luxury brand. You don't have a lot of leeway to cut pricing there.

David Whiston: Good morning, guys. Thanks. Just one question for me. It's on the success driver side. You talked about in Newmar having competitiveness in lower price segments. Are we talking just new product there, or are you actually talking about price reductions? Because that's a luxury brand. You don't have a lot of leeway to cut pricing there.

Speaker #2: Are we talking price reductions, or are you actually talking about new product pricing there? Because that's a luxury brand. You don't have a lot of leeway to cut pricing.

Speaker #2: There .

Speaker #1: Yeah . Good morning David . Good to hear from you . It's really about new products . You know Newmar in the business .

Speaker #1: not Not price reductions . I would tell you that Casey Tubman who leads that business , has been very disciplined with again , managing their floor plan and model mix to make sure that , you know , we have the right floor plans that are their moving in the market .

Michael J. Happe: Yeah. Good morning, David. Good to hear from you. It's really about new products in the Newmar business. Not price reductions. I would tell you that Casey Tubman, who leads that business, has been very disciplined with, again, managing their floor plan and their model mix to make sure that we have the right floor plans that are moving in the market. So you may see a little ASP shift because of that. Newmar is one of our most coveted brand assets. Just a tremendous consumer experience, great dealer partnerships, and the product is second to none in the marketplace. So everything we do at Newmar is about maintaining that brand promise that is luxury, that is second to none.

Michael Happe: Yeah. Good morning, David. Good to hear from you. It's really about new products in the Newmar business. Not price reductions. I would tell you that Casey Tubman, who leads that business, has been very disciplined with, again, managing their floor plan and their model mix to make sure that we have the right floor plans that are moving in the market. So you may see a little ASP shift because of that. Newmar is one of our most coveted brand assets. Just a tremendous consumer experience, great dealer partnerships, and the product is second to none in the marketplace. So everything we do at Newmar is about maintaining that brand promise that is luxury, that is second to none.

Speaker #1: So you may see a little ASP know , because of you that shift , is one of our Newmar coveted brand assets , just a tremendous most experience .

Speaker #1: Great dealer partnerships, and the product consumer is second to none in the marketplace. So everything we do at Newmar is about maintaining that brand promise—that is, that is luxury.

Speaker #1: That is second to none . So when we talk about affordability there , it's really coming up with new products that , you know , maybe fill out the the little lower side of that luxury lineup on the pricing side .

Michael J. Happe: So when we talk about affordability there, it's really coming up with new products that maybe fill out the little lower side of that luxury lineup on the pricing side. So the Freedom Air in the Class C space is premium versus the other Class Cs in the market, but it is affordable for people to get into the Newmar brand in a whole different way. So it depends on how you kind of define affordability. But a lot of people want to get into that brand, and we're trying to provide a catalog there that gives them access across multiple segments. But no, we're not looking to raise price dramatically on that brand by any means, but we're certainly trying to keep that consumer experience just best in class.

So when we talk about affordability there, it's really coming up with new products that maybe fill out the little lower side of that luxury lineup on the pricing side. So the Freedom Air in the Class C space is premium versus the other Class Cs in the market, but it is affordable for people to get into the Newmar brand in a whole different way. So it depends on how you kind of define affordability. But a lot of people want to get into that brand, and we're trying to provide a catalog there that gives them access across multiple segments. But no, we're not looking to raise price dramatically on that brand by any means, but we're certainly trying to keep that consumer experience just best in class.

Speaker #1: So the Freedom Aire in the Class C space is premium versus the other classes in the market. But it is affordable for people to get into the Newmar brand in a whole different way.

Speaker #1: So it depends on how you kind of define affordability . But a lot of people want to get into that brand . And and we're to trying provide a catalog there that gives them access across multiple But no , we're going to , you know , we're not segments .

Speaker #1: Price dramatically on that brand by any means. But we're certainly trying to keep that consumer experience just best in class.

Speaker #11: Thank you .

Speaker #3: Thank you. This concludes the question and answer session. I would now like to turn it back to Joanne Andalo for closing remarks.

Michael J. Happe: Thank you.

David Whiston: Thank you.

Operator: Thank you. This concludes the question and answer session. Oh, now I'd like to turn it back to Joanne Undala for closing remarks.

Speaker #12: Thank you all for joining us. For those of you planning to attend the upcoming Florida RV Super Show in Tampa, we look forward to meeting with you.

Speaker #12: Have a wonderful holiday season.

Bryan L. Hughes: Thank you all for joining us. For those of you planning to attend the upcoming Florida RV Super Show in Tampa, we look forward to meeting with you. Have a wonderful holiday season.

Joan Ondala: Thank you all for joining us. For those of you planning to attend the upcoming Florida RV Super Show in Tampa, we look forward to meeting with you. Have a wonderful holiday season.

Operator: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.

Q1 2026 Winnebago Industries Inc Earnings Call

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